Lawmakers may have reached a bipartisan deal to close a budget gap at the Department of Health and Human Services, but health care providers are still bracing for deep cuts.
Members of the Legislature’s budget committee pushed back against Gov. Paul LePage’s proposal to drop coverage and tighten eligibility for some MaineCare beneficiaries, but left intact cuts to reimbursement rates for hospitals. Under the deal passed unanimously early Wednesday morning, hospitals will lose $10.1 million over the next two years on services they provide to MaineCare patients.
Hospitals also face a second hit from cuts outlined by a streamlining task force, which called for another $3.1 million drop in reimbursements.
The federal government kicks in roughly $2 for every $1 the state spends on MaineCare, the state’s version of Medicaid. So the proposed cuts for hospitals mean a loss of nearly $40 million in state and federal monies combined.
“It’s going to be a challenge to meet these cuts,” said Jeff Austin, a lobbyist for the Maine Hospital Association.
Eastern Maine Healthcare Systems will take an $11.8 million loss from the reimbursement cuts, with $8.4 million carried by Eastern Maine Medical Center in Bangor, according to Lisa Harvey-McPherson, who handles policy issues for the health system.
“I believe that hospitals continue to experience a disproportionate hit in the budget package that was passed last night,” she said.
EMHS is already owed $85 million for care provided to MaineCare patients that it hasn’t been compensated for, Harvey-McPherson said. Other hospitals are in a similar predicament, and piling on further cuts creates too heavy a burden, she said.
Two Democrats on the Legislature’s Appropriations Committee, Rep. Peggy Rotundo of Lewiston and Rep. Sara Stevens of Bangor, voted against the reimbursement cuts.
“For those hospitals that do take a lot of MaineCare patients, these cuts are devastating,” Rotundo said.
The committee did restore some planned rollbacks on outpatient hospital visits, she said.
Rotundo said she’s committed to finding more money to prevent the bulk of the reimbursement cuts from taking effect in 2013.
In a statement, House Speaker and pharmacist Robert Nutting, R-Oakland, said “the budget ensures that hospitals, pharmacies, nursing homes and other health care providers will continue to receive their reimbursement for Medicaid services provided.”
Lawmakers on the panel showed unanimous support for two controversial proposals, agreeing to cap MaineCare funding for childless adults, or noncategoricals, and reducing the income threshold for parents of children on MaineCare as of October.
Hospital officials have said LePage’s plan to drop noncategoricals from MaineCare would add tens of millions more in losses as hospitals pick up the tab for treating those patients, often in expensive emergency rooms.
The compromise deal offers some relief in that sense, Austin said.
“It’s less negative than the worst case scenario,” he said.
The deal preserves coverage for childless adults already on the rolls and extends a freeze on enrollment. About 14,000-16,000 people remain on a waiting list for noncategorical coverage through MaineCare, a DHHS official said in December.
Thousands of childless adults could lose needed benefits permanently by getting bumped from coverage as the result of a simple paperwork error, said Kevin Lewis, chief executive officer of the Maine Primary Care Association.
He also criticized the plan to tighten eligibility for parents of children on MaineCare, saying they’re among the cheapest people the program covers.
“It’s a mistake to try and balance the budget by eliminating coverage for people who have no other option,” he said. “We can’t wish away the ultimate health care costs that are going to show up regardless.”