May 25, 2018
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Maine hospitals fault state for over-budget payments

Department of Health and Human Services Commissioner Mary Mayhew is shown here after being named to the post in January by Maine Gov. Paul LePage, left.
By Meg Haskell, BDN Staff

Maine hospitals are fighting back against what they see as insinuations that they are somehow at fault for a disjointed payment system that caused Commissioner Mary Mayhew of the state Department of Health and Human Services on Thursday to announce $66 million in over-budget Medicaid payments to the hospitals.

“The department overspent their budget,” said Jeff Austin, spokesman for the Maine Hospital Association. “It makes zero sense to blame Maine hospitals.”

Mayhew announced the over-budget payments on Thursday, saying the previous administration failed to make needed changes in the way hospitals have traditionally been paid when a new system was implemented last September. As a result, she said, hospitals have been receiving for several months both the traditional monthly prospective payments as well as diagnosis-related payments processed by the new system. The inadvertent double-dipping has resulted in the state’s $66 million budget over-extension  to date and would result in $119 million by the end of the fiscal year if not corrected.

Austin said media reports and some state lawmakers have implied that hospitals should have caught and reported the redundant payments. But he says hospitals legitimately assumed the state was minding its own budget.

“Apparently the state didn’t have the budgeted resources to make these payments,” he said, “and now we expect the state is going to do something to stay within their budget.”

In a letter sent to Maine hospitals on Thursday, Stefani Nadeau, acting director of MaineCare, the state’s medicaid program, said hospitals will see reductions in both prospective and diagnosis-related payments between now and the end of the year to offset the extra payments. If those reductions don’t balance the books, any remaining excess may be deducted from the settlement of long-overdue medicaid payments dating back to 2007 that  hospitals expect to receive later this month, she said.

At Eastern Maine Healthcare Systems in Brewer, Chief Financial Officer Daniel Coffey said the state likely will be recouping about $22 million from the seven hospitals in the system. That’s approximately the value of the debt stilled owed the EMHS hospitals from the unpaid Medicaid debt dating back to 2007, he said.

Mayhew could not be reached for comment Friday.

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