LePage again threatens to take money from schools if DHHS cuts not approved

AUGUSTA, Maine — Gov. Paul LePage told lawmakers Friday that they’re running out of time to approve his budget plan for the Department of Health and Human Services.

LePage has proposed closing an estimated $221 million gap at DHHS by overhauling MaineCare, the state’s version of the federal Medicaid program.

“This is not normal politics. This is not rhetoric,” he told members of the Legislature’s budgetary Appropriations Committee. “Folks, on April 1, we will be out of 2012 budgeted Medicaid money. Period.”

It is unusual for governors to attend committee meetings, let alone address the budget-writing committee.

LePage repeated a threat he made last week to siphon funding from public schools to keep nursing homes open if legislators fail to approve his proposal. Otherwise, he will need greater authority to cut spending, he said.

The state is spending $10 million to $12 million more a month than it previously budgeted for MaineCare, he said. His plan seeks to bring MaineCare in line with other states’ eligibility thresholds for Medicaid, LePage said.

The drop-in marked LePage’s second unannounced visit to the Appropriations Committee as it considers his budget cuts. In December, he sat in the committee room for several minutes but did not speak.

The governor took the microphone following heightened partisan negotiations over $37 million in cuts that require federal approval.

The administration has acknowledged that three of the planned rollbacks violate a provision of the federal Affordable Care Act prohibiting states from tightening Medicaid eligibility ahead of the law’s 2014 implementation. LePage plans to seek a waiver from federal officials on those cuts, saying Friday he would fly to Washington, D.C., to persuade U.S. HHS Secretary Kathleen Sebelius in person.

“I just urge you all to really get this done, because I need to get to Washington and try to sit with the secretary and convince her that the decade of being overly generous and the economy that we’re facing is such that they need to work with us,” he said.

In a Thursday letter to Democratic leaders on the committee, the director of the federal Centers for Medicare and Medicaid Services wrote that no state has yet been granted a waiver for the “maintenance of effort” provision. Director Cindy Mann also said in the letter that the waiver applies only to experimental projects aimed at providing coverage to the needy, not to plans for balancing budgets.

“The purpose of Medicaid is to provide high-quality health care coverage to needy individuals whose income and resources are insufficient to meet the costs of necessary medical service,” Mann wrote. “Reductions in eligibility solely for budgetary purposes would not be experimental, pilot or demonstration projects that further the purposes of the program.”

The letter also said legislative action has no bearing on whether the agency would grant the waiver. The LePage administration has said lawmakers’ approval of his cuts would pressure the federal government into approving the waiver request.

Three of the planned cuts in LePage’s proposal violate the maintenance of effort provision: tighter eligibility for a program that helps seniors pay for prescription drugs, stricter income limits for some parents and dropping 19- and 20-year-olds from the MaineCare rolls.

Democrats said the letter makes clear that CMS is unlikely to approve the cuts, as they have suspected all along. DHHS Commissioner Mary Mayhew countered that CMS’ response was inappropriate given that her department has yet to submit a formal request for the waiver.

“There’s a real roll of the dice with this,” said Rep. Peggy Rotundo, D-Lewiston. “Is that really what we want to do for the most frail and vulnerable in our state? I don’t think so.”

Mayhew said the maintenance of effort provision ties states’ hands in a tough fiscal environment without supplying additional federal monies. Pressed by committee members, she said federal regulatory policy is far too complex to insist that Thursday’s letter provides a definitive answer.

“I don’t think this letter is helpful, I think it was written in a speculative way and I think we received a response that is not in response to a specific proposal,” she said.

The administration will work with the state’s congressional delegation to make its case to CMS, Mayhew said.

Rep. Dennis Keschl, R-Belgrade, said federal denial of a future waiver request would unfairly burden the state.

“Aren’t they forcing us into a position where the state is saying, ‘We don’t have the money,’ and they’re saying, ‘Go get it?,’” he said. “I just don’t understand how the federal government can do that.”

The administration has said LePage will pursue curtailment if the waiver request is denied. A curtailment order allows the governor to cut spending without legislative approval. But curtailment authority, as narrowly defined by state law, wouldn’t apply in the case of the DHHS budget gap, according to to Grant Pennoyer, director of the nonpartisan Office of Fiscal and Program Review.

Curtailment grants executive power to limit spending only when revenues fall short, not when a program outspends its authorized limits, he said.
“This is a program spending issue and wouldn’t fall under the statutory curtailment authority,” Pennoyer said.

The governor could issue an order to shuffle funds within the department, though addressing the full $221 million shortfall through such administrative measures would be tough, Pennoyer said.

“I’m not sure it would be sufficient to address a shortfall of this size,” he said.

The Appropriations Committee is scheduled to meet into the weekend and next week on the MaineCare proposal.