March 23, 2019
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LePage holds emergency meeting on $71 million DHHS shortfall

Pat Wellenbach | AP
Pat Wellenbach | AP
Mary Mayhew, Commissioner of Health and Human Services, outlines further tax cuts as she updates lawmakers on state revenues in advance of a report on progress finding $25 million in budget cuts to balance the state budget at a hearing in Augusta on Monday, Oct. 24, 2011.

AUGUSTA, Maine — Gov. Paul LePage called legislative leaders and key lawmakers to a meeting on short notice Monday to inform them the Department of Health and Human Services budget has a $70.9 million budget hole this year. Some of the red ink is likely to continue in the second year of the budget.

“Some of our concerns that we frankly had when we were dealing with the biennial budget last spring are now coming home to roost,” said DHHS Commissioner Mary Mayhew after the closed meeting. “Some are baseline assumptions that did not hold up.”

Most of the cost overruns are in the MaineCare program, the state’s name for Medicaid. Doctors’ claims are above budget for this year by an expected $10.3 million. Another $9.9 million in hospital claims is projected to be over budget because of discrepancies in Medicare and MaineCare.

“Some of these costs will continue in the next year of the budget, but not all,” Mayhew said. “We are still analyzing which are one-time costs this year and which ones will continue on.”

Mayhew said savings initiatives are expected to be short by $4.1 million and some items that should have been budgeted for, such as the increase in Medicare Part B premiums, were not. That is a projected $5 million problem.

She said there is a fundamental flaw in the way the state has been budgeting under MaineCare, lumping all of the programs under one big account instead of projecting costs program by program.

Mayhew said the general assistance program, which reimburses some costs to cities and towns, is also over budget, as it has been historically. She pegged that need at $3.7 million for this budget year.

“We are looking administratively to see what we can do to limit our expenditures,” she said. But she acknowledged most of the solutions will require legislative action and she is not ready to make those proposals as the analysis of the underbudgeted items continues.

The meeting was called on such short notice that several lawmakers participated by phone. Others were in the cabinet room for the news.

“We are bleeding about $6 to $7 million a month and we are going to have to address this as soon as we can,” Rep. Patrick Flood, R-Winthrop, House co-chairman of the Appropriations Committee, said. He expects the committee will start to meet on the problem in December, depending on when it gets an emergency budget proposal to address the problem.

“There are a lot of variables we know are coming but we don’t know when we will know what they cost,” he said.

Mayhew agreed. She said Congress is considering deficit reduction proposals that certainly will have some impact on the DHHS budget. In addition, there are several federal audits of Medicaid-funded programs under way that could cause both immediate and long-term budget problems.

“There are still a lot of unknowns but I think we will start getting some answers right after Thanksgiving that we can work with,” Flood said.

Sen. Dawn Hill, D-York, the Democratic senator on the budget committee, also attended the meeting. She said the news is troubling but she wants far more detail on actual spending.

“Is this a spike or is this truly a trend?” she said. “We really don’t have a predictive model set up because we don’t have enough information yet.”

Hill said the figures given to lawmakers are estimates based on the first three months of the budget year. She needs to be convinced that those projections will hold up.

“I don’t want all of us to panic and get all upset and start down the road with a supplemental budget that we don’t have firm figures about,” she said.

Hill acknowledged the budget shortfall presented by LePage and his administration is not all of the likely budget problems the state will face. She said with likely federal spending cuts and looming federal audits, it is even more important to make sure projections are as accurate as they can be.

Flood confirmed that the $70.9 million number is subject to revision. He said during discussions it was clear the private nonmedical institutions number is an estimate and could be several million dollars less than projected.

He said when the Appropriation Committee meets in two weeks there will be a lot of questions for Mayhew and her staff.

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