LePage accuses Democrats of failing Maine’s hospitals, citing $400M debt

Posted Oct. 14, 2010, at 10:03 p.m.
Last modified Jan. 27, 2011, at 8:54 a.m.

BANGOR, Maine — Maine hospitals are owed close to $400 million by MaineCare, the state’s Medicaid program for low-income and disabled residents.

On Thursday, Republican gubernatorial candidate Paul LePage staged simultaneous noontime media events in five Maine communities aimed at drawing attention to the long-standing hospital debt. He accused Democrats in Augusta, including Gov. John Baldacci and LePage’s chief rival, Sen. Libby Mitchell, D-Vassalboro, of failing to prioritize the issue.

Mitchell and leading independent candidate Eliot Cutler of Cape Elizabeth were quick to agree the hospital debt is a big problem. But they criticized LePage for claiming the issue as his own and for failing to put forth specific solutions. The state Democratic party issued a statement accusing LePage of standing by overpaid hospital executives and not knowing the history of the MaineCare debt issue.

LePage spoke in person at a gathering near Central Maine Medical Center in Lewiston. Other events took place near hospitals in Bangor, Presque Isle, Augusta and Sanford and featured GOP legislators supporting LePage’s candidacy.

“Working Maine families know that their budgets are not balanced until all the bills are paid,” LePage wrote in a prepared statement distributed at all of the events. “Augusta’s fiscal mismanagement is creating a financial crisis in many Maine hospitals resulting in layoffs, late payments to vendors and lost opportunity for the small businesses that provide our hospitals with goods and services.”

The Bangor rally attracted about 18 sign-waving LePage supporters to the corner of State and Hancock streets near Eastern Maine Medical Center, the state’s second-largest hospital.

State Rep. Andre Cushing, R-Hampden, and Sen. Debra Plowman, R-Hampden, were the featured speakers.

Cushing said hospital debt — totaling close to $58 million at EMMC and about $2 million at St. Joseph Hospital across town — is among the “hidden issues that drive the cost of health care.” He praised LePage for identifying the $400 million as part of the state’s obligation to balance its books, along with a looming $1 billion budget shortfall in the next biennium and the underfunded coffers of the state employee pension program.

With approximately one in four Mainers covered by MaineCare, Cushing said the state’s next governor must be able to work with legislators to find solutions for keeping hospital payments current. He did not identify what those solutions might be.

Plowman said the hospital debt is “a symptom of the disease that is killing the Maine economy.” The failing economy is causing the state to lose businesses, jobs, health care coverage and younger adults, she said.

The current hospital debt dates back to 2007 and totals between $300 million and $400 million in combined state and federal Medicaid funds. It reflects the difference between prospective payments made at the beginning of each year and the actual charges for services delivered during the year.

The state’s portion is about one-third of the total — or about $130 million. Every state dollar draws between two and three dollars in matching federal Medicaid payments. Neither the hospital association nor individual hospitals participated in organizing the political events, and hospital association president Stephen Michaud said the organization would not be endorsing any of the gubernatorial candidates.

Michaud said Maine hospitals have eliminated about 800 positions in the past 18 months. Although the overall economic downturn and the national health care crisis have played a significant role in hospital job losses, the MaineCare debt is a “severe aggravating factor,” he said.

In a telephone conversation Thursday afternoon, LePage said that if he is elected, he would allocate $65 million in each year of the next biennial budget to pay the state’s share of the hospital debt. Going forward, he said he would tighten MaineCare eligibility guidelines and reduce funding for some services the program covers.

He also would seek to lighten insurance mandates to promote competition and drive down premium costs, allowing some Mainers currently enrolled in MaineCare to purchase private coverage. He would not raise taxes or borrow the money to pay the debt, he said.

According to Commissioner Brenda Harvey of the Maine Department of Health and Human Services, Maine hospitals have been paid almost $3.7 billion in overdue claims since Baldacci took office in 2002.

“He has paid off the 10 years [of debt] he inherited and four years [of debt incurred] during his own administration,” Harvey said. The payments have been made in agreement with hospitals and supported by strongly bipartisan budgets, she said, and reflect the overwhelming support in Augusta for making good on the state’s debt. Even in the final months of his administration, she said, Baldacci continues to try to resolve the MaineCare hospital debt.

“The governor is committed to closing this gap and has been throughout his entire administration,” Harvey said. “To suggest otherwise is a mischaracterization of what he has been trying to do.”

LePage’s opponents in the campaign for the Blaine House were quick to agree that the hospital debt is a significant problem.

Mitchell, who serves on the board of the MaineGeneral Health organization in Waterville, said the state must continue its progress toward settling the MaineCare debt. While hospitals have experienced “a perfect storm” of economic woes in recent years, including fewer inpatient admissions and increasing costs, Mitchell said they also have a responsibility to cut costs in difficult economic times.

Mitchell said the next biennial budget will address the hospital debt, but will continue to reflect the ongoing economic downturn in Maine and nationally.

Cutler called the hospital debt issue “shameful” and said the state must find a way to pay hospitals the money it owes them. Cutler said he has met with administrators at each of Maine’s larger hospital systems to discuss the problem but has yet to arrive at a solution. He criticized LePage for making “a political football” of the issue without having a plan to remedy it.

In a statement issued late Thursday afternoon, Arden Manning of the Maine Democratic Party criticized LePage for not recognizing bipartisan progress toward paying the hospital debt.

“It seems LePage is siding with overpaid [hospital] CEOs,” Manning said. “While LePage rallied against the Legislature for not paying back hospitals, he didn’t even acknowledge the fact that hospital payments were passed by a supermajority of both Democrats and Republicans just last year.”

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