MaineCare director says if state can’t cut Medicaid, it will request more money for budget

Posted Sept. 14, 2012, at 5:58 p.m.

AUGUSTA, Maine — The state’s Medicaid director said Friday she’s still hopeful federal officials will approve Maine’s request to make about $20 million in cuts to its Medicaid program, and that the state will be able to make those cuts in time to fill a gap in the current state budget.

But if those plans fall through, she said, the state Department of Health and Human Services will have to request additional funding from Gov. Paul LePage and the Legislature to plug a Medicaid budget hole.

“At this point in time it would be a request for dollars,” Stefanie Nadeau, who directs the state’s Office of MaineCare Services, told the Bangor Daily News. “We don’t necessarily have a plan on how to fill the gap other than a supplemental request. That’s our contingency plan.”

Nadeau’s comments came a day after a federal court dismissed a lawsuit filed by Attorney General William Schneider to force a federal agency to expedite approval of Maine’s request to make about $20 million in cuts to its Medicaid program, also known as MaineCare.

The state had filed the request with federal officials on Aug. 1 seeking a decision by the start of September so the cuts could take effect Oct. 1. When the federal Centers for Medicare and Medicaid Services indicated it wouldn’t meet the state’s desired Sept. 1 deadline for ruling on the cuts, Schneider petitioned the First Circuit Court of Appeals in Boston to force an expedited decision.

That was the case a three-judge panel summarily dismissed on Thursday.

On Friday, Schneider said the judges’ decision was not a rejection of “Maine’s substantive legal arguments” that the Medicaid cuts in question are allowed by federal law. “We continue to believe that Maine has a strong legal argument on the substantive merits of this case,” he said in a written statement.

The cuts to the state’s Medicaid program — which lawmakers approved as part of two separate budget packages earlier this year — 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. The reductions would affect coverage for 36,000 people, according to the Department of Health and Human Services.

Whether the reductions are legal has been a topic of debate throughout the year, since the Obama administration’s health care reform law largely bars states from cutting Medicaid services in advance of a planned 2014 expansion of the program.

A spokesman for the Centers for Medicare and Medicaid Services, the federal agency reviewing Maine’s request to make cuts, has said only a portion of those reductions — changing the income threshold at which residents qualify for MaineCare from 200 percent of the poverty level to 133 percent — are likely allowed under federal law, but that the agency has been reviewing Maine’s request.

“We’re still hopeful that CMS is going to approve our state plan amendment in a timely manner and that we will be able to implement these changes as legislatively directed as quickly as possible,” Nadeau said.

But two lawmakers on the Legislature’s budget-writing Appropriations Committee said Friday it’s looking increasingly likely the LePage administration will have to find another way to plug the budget hole the Medicaid cuts are supposed to fill.

“It could be some time before we get a decision,” said Sen. Roger Katz, R-Augusta “and if it does, we undoubtedly will be facing a supplemental budget request to fund the program in the interim.”

Katz said he thinks Maine’s request to the federal government to make Medicaid reductions has merit. “We are optimistic for a favorable ruling,” he said.

But Democrats, from the start, “had no interest at all in considering any proposals for cuts where waivers would be needed,” said Rep. Peggy Rotundo, D-Lewiston. “We felt then and continue to feel that the actions that our Republican colleagues took were fiscally irresponsible and are leaving people’s lives in limbo, which is terribly unfair.”

If the Department of Health and Human Services has to request additional funding from LePage, it falls to the governor’s office to find additional revenues or alternative cuts to balance the budget and propose those changes to the Legislature.

A spokeswoman for LePage declined comment on the Medicaid plan amendment this week, and LePage’s office hasn’t commented in the past on backup budget plans.

“I certainly would welcome hearing the governor’s ideas in terms of where he would propose to make up that difference,” Rotundo said. “This will be left to the Legislature to make decisions about come January.”

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