Feds delay ruling on Medicaid cuts; LePage blasts ‘stall’

AUGUSTA, Maine — The federal government says it needs more information from Maine officials before it can rule on the state’s request to make $20 million in cuts to its Medicaid program. That means it could take three months more for the LePage administration to find out whether it can make the reductions it had been counting on to balance the current state budget.

It also means a newly sworn-in Legislature in January will likely have to take up an alternative proposal for balancing the budget.

Federal officials, in a letter sent to state Health and Human Services Commissioner Mary Mayhew on Oct. 26, recommended the state divide its request to cut Medicaid into two separate requests, asked for clarification on the state’s process for determining income eligibility for Medicaid, and asked for proof that state officials consulted with tribal health providers before submitting the application for a so-called Medicaid state plan amendment.

The federal government asked for a response from the LePage administration by Jan. 13, 2013. LePage spokeswoman Adrienne Bennett said the administration plans to send its response Friday.

The request for more information restarts the 90-day window the federal government is allowed for reviewing Maine’s application for an amendment to its Medicaid plan. The federal government originally was expected to rule by Thursday, three months after the state had submitted its amendment request.

Gov. Paul LePage responded Thursday with a letter to U.S. Health and Human Services Secretary Kathleen Sebelius that suggested the Obama administration’s questions for Maine officials represented “at best, government bureaucracy and inefficiency and, at worst, political delay.”

“After 86 days of review, the Center for Medicare and Medicaid Services (CMS) sent back three questions that, quite honestly, do not impact the substance of our request and could have been answered with a quick telephone call,” LePage wrote.

In a video posted on his website, LePage called the questions “irrelevant” and said they were “clearly meant to stall the process.”

“Maine needs and deserves answers now,” he said, urging residents to call their congressional representatives to demand “that the federal government put politics aside and address the needs of our most vulnerable.”

A CMS spokesman didn’t comment Thursday other than to say the federal office had requested more information from Maine officials.

The proposed cuts would affect 36,000 low-income people, eliminating coverage for 19- and 20-year-olds, tightening income eligibility requirements for low-income parents and scaling back Medicaid access for elderly residents who also qualify for Medicare benefits.

The LePage administration had been counting on the cuts — approved as part of two supplemental budget packages during the past year — to balance the current state budget. The cuts were scheduled to take effect Oct. 1. Now, if approved, the cuts might not take effect until this coming winter, and a newly sworn-in Legislature in January likely will need to approve a supplemental package that finds another way to balance the current state budget.

The Legislature passed the first of the two budget packages that reduced Medicaid by a two-thirds margin, with support from Democrats. The second budget package with Medicaid cuts passed largely along party lines, with Republicans in support.

“We knew when those cuts were put into the Republican budget that we were going to come back in January and fix those holes,” said Rep. Peggy Rotundo of Lewiston, the ranking Democrat on the Legislature’s Appropriations Committee. “It was clear to us then, and it’s clear to us now, that we were not going to be able to get the waiver to allow those cuts to go forward.”

Appropriations Committee Chairman Sen. Richard Rosen, R-Bucksport, said he wasn’t surprised that federal officials requested more information near the end of their 90-day timeline.

“The delay does feel like a stall, and that’s disappointing because they have a very straightforward, well-developed proposal before them to make these changes to the state of Maine’s plan, and they should have been able to reach a decision in the affirmative,” he said.

It has been uncertain from the start whether many of the proposed Medicaid cuts are allowed under the Obama administration’s Affordable Care Act, which largely prohibits states from cutting existing Medicaid services in advance of a 2014 Medicaid expansion. The section of the law prohibiting those cuts is called the “maintenance of effort” provision.

Attorney General William Schneider told members of the Legislature’s Appropriations Committee last month that the U.S. Supreme Court’s June ruling on the federal health care law made Maine’s cuts legal. While the Supreme Court largely upheld the health care reform law, the court ruled it was unconstitutional for the federal government to withhold funds for existing Medicaid services as a way to enforce the Medicaid expansion.

Schneider has called the “maintenance of effort” provision “part and parcel of the Medicaid expansion that was struck down.” However, Sebelius, the federal health and human services secretary, has said the Supreme Court decision doesn’t affect that section of the Affordable Care Act.

Schneider has said repeatedly that Maine is willing to take the federal government to court to argue that it can make the proposed Medicaid cuts. LePage repeated that threat Thursday in his letter to Sebelius.

“We are confident that the Supreme Court freed Maine from the ‘economic dragooning’ of the Affordable Care Act,” LePage wrote. “You may have a different opinion, and we can bring that disagreement back to the courts.”

Maine has already gone to court once on the Medicaid cuts. In early September, Schneider filed a lawsuit with the federal First Circuit Court of Appeals in Boston to force the federal government to more quickly rule on and approve Maine’s request to scale back its Medicaid program. A three-judge panel threw out that lawsuit less than two weeks after Schneider filed it.