Feds won’t rule on $20 million in Medicaid cuts on LePage’s timeline, throwing cuts into question

Posted Aug. 31, 2012, at 5:11 p.m.
Last modified Aug. 31, 2012, at 6:33 p.m.
Maine Gov. Paul LePage
Pat Wellenbach | AP
Maine Gov. Paul LePage Buy Photo

AUGUSTA, Maine — The LePage administration won’t get a decision from the federal government as soon as it wanted on its request to make about $20 million in cuts to the state’s Medicaid program.

The federal Centers for Medicare and Medicaid Services said Friday it’s still reviewing Maine’s request for an amendment to its so-called Medicaid state plan. In a letter to LePage, acting administrator Marilyn Tavenner noted that the Medicare and Medicaid office has 90 days to review such a request.

“I appreciate that your budget is predicated on the savings anticipated from ending the Medicaid coverage of the groups of individuals at issue in the proposed [state plan amendment], but your request raises issues that require careful consideration by HHS,” she wrote.

The LePage administration submitted its request for the Medicaid plan amendment on Aug. 1 and requested an expedited decision, by Sept. 1, so the state could implement the cuts by Oct. 1. Since the federal government is allowed 90 days to rule on the amendment request, Maine should have a decision in hand by the end of October, well after the cuts were to have taken effect.

The administration had been counting on the Medicaid cuts — approved by Republican lawmakers as part of a spring supplemental budget package — to balance the state budget.

But it has been uncertain from the start whether many of the cuts would be legal under the Affordable Care Act, which largely prohibits states from making cuts to existing Medicaid services in advance of a 2014 expansion of Medicaid, a program funded by states and the federal government that provides health insurance to low-income residents.

The state cuts would eliminate coverage for 19- and 20-year-olds, tighten income eligibility requirements for low-income parents and scale back Medicaid access for elderly residents who also qualify for Medicare benefits.

While the Supreme Court in June largely upheld the federal health care reform law, the court ruled it unconstitutionally coercive for the federal government to withhold all Medicaid funds from a state that doesn’t participate in the Medicaid expansion.

The LePage administration saw that portion of the ruling as a sign it’s legal to go ahead with cuts to existing Medicaid services simply by applying to the federal government for a routine amendment to Maine’s Medicaid State Plan.

Centers for Medicare and Medicaid Services spokesman Brian Cook said when Maine submitted its request that a part of it would likely pass federal muster: a proposal to change the threshold at which residents qualify for MaineCare from 200 percent of the poverty level to 133 percent. The other cuts, however, appeared to be “inconsistent with the terms of the applicable federal statute,” Cook said.

If the state isn’t able to make the Medicaid reductions by Oct. 1, LePage might have to make alternative plans for balancing the budget before the end of the current fiscal year, which ends June 30, 2013. Spokeswomen for LePage and Health and Human Services Commissioner Mary Mayhew couldn’t be reached to answer those questions late Friday.

Mayhew is scheduled to update the Legislature’s Appropriations Committee on the Medicaid request on Sept. 7.

Sen. Richard Rosen, R-Bucksport, who chairs the Appropriations Committee, said Friday it’s too early to know what the impact of a delayed decision will be.

“We tried to be quite conservative and fairly careful in the amount of savings booked associated with the initiative,” said Rosen, who backed the Medicaid cuts in question. “Once there’s a decision — let’s say it’s a positive decision and they agree to approve the request and the implementation is delayed — at that point you’re able to run an analysis and determine whether you’re able to achieve the same level of savings.”

Either way, Rosen said, a supplemental budget package is likely at the beginning of a new legislative session in January, “even if it’s just for making minor adjustments.”

When the LePage administration submitted its waiver request, it asked the federal government to pay Maine’s state share of Medicaid expenses while it considered the request, if it wouldn’t be able to make a decision by Sept. 1.

The letter from the federal government issued Friday made no mention of that request.

Attorney General William Schneider has promised legal action against the federal government if it doesn’t grant Maine’s request to scale back Medicaid services.

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