MaineCare cuts could lead to hospital layoffs

Posted Jan. 13, 2012, at 6:05 p.m.
Gov. Paul LePage speaks at a news conference, Thursday, Dec. 15, 2011, at the State House in Augusta, Maine. LePage defended his plan to remove 65,000 Mainers from Medicaid coverage.
Robert F. Bukaty | AP
Gov. Paul LePage speaks at a news conference, Thursday, Dec. 15, 2011, at the State House in Augusta, Maine. LePage defended his plan to remove 65,000 Mainers from Medicaid coverage.

AUGUSTA, Maine — Hospitals may be forced to cut jobs and limit services as a result of Gov. Paul LePage’s proposal to overhaul MaineCare, lawmakers were told Friday.

The proposal, designed to close an estimated $220 million gap in the Department of Health and Human Services budget, would reduce MaineCare reimbursement rates for inpatient and outpatient services and cut funding to some rural hospitals. In total, hospitals will take a $50 million hit as a result of those rollbacks, Jeff Austin, a lobbyist for the Maine Hospital Association, told members of the Legislature’s Appropriations Committee.

The $50 million doesn’t include indirect costs from LePage’s plan to drop childless adults from the MaineCare rolls, which would add tens of millions more in losses as hospitals pick up the tab for treating those patients, Austin said.

Pressed by legislators to assess the MaineCare proposal’s potential impacts on hospitals, Austin said he wanted to avoid scare tactics but acknowledged that layoffs and service cuts are possible.

“Do service lines get ended?” he said. “I mean hospitals aren’t just the building with the ER anymore, they are bigger systems that try to provide a comprehensive continuum of care.”

Hospitals would also look to commercial insurers to relieve some of the burden, but aren’t likely to find much sympathy, Austin said.

“The commercial market is fed up with us seeking their assistance in covering underpayments” from Medicaid and Medicare, he said.

MaineCare is the state’s version of the federal Medicaid program, which provides health insurance for the poor.

LePage has said MaineCare will run out of money on April 1 without his reforms. His plan would drop 65,000 people from coverage, tighten eligibility requirements and cut services to bring the program closer to national averages for public health benefits.

Austin also told lawmakers that hospitals are owed roughly $400 million in state and federal funds for Medicaid services for the remainder of the fiscal year. Last year, LePage budgeted $70 million in state monies to access enough federal matching funds to reduce debt owed to hospitals for Medicaid services by $248 million. Since then, however, the hospitals have continued to accrue more debt, and the state now owes them about $125 million, Austin said.

The Appropriations and Health and Human Services committees plan to meet next week to further discuss the DHHS budget.

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