September 22, 2019
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Maine hospitals have yet to benefit from Medicaid expansion

John Clarke Russ | BDN
John Clarke Russ | BDN
Lisa Harvey-McPherson (second from right), the vice president of government relations for the nonprofit Northern Light Health, speaks at a Brewer event in 2010. She said her group is expecting to see more financial benefit from Medicaid expansion in 2020 than it saw in 2019.

AUGUSTA, Maine — Four of Maine’s rural health care providers — including one of the state’s biggest health care systems — say the financial effects of expanded MaineCare have yet to reach them nine months after expansion took effect but may yield more benefits next year.

They attribute this in part to enrollment rates. The state has enrolled more than 36,000 people in the program so far, about half of the 70,000 expansion was estimated to cover, as of Friday, according to data from the Maine Department of Health and Human Services, and many of them may not have used their coverage yet.

But hospitals also say expanded coverage is just part of the solution — and though a bill that will increase MaineCare reimbursement rates for rural hospitals, physicians and health clinics goes into effect next week, it could be some time before rural hospitals see relief.

“With improved payments and the impact of increased coverage, we anticipate we’ll see a greater impact in 2020 than 2019,” said Lisa Harvey-McPherson, vice president of government relations for the nonprofit Northern Light Health, which operates nine hospitals — seven that are rural — in Maine, including Eastern Maine Medical Center.

Medicaid expansion has been heralded as a way to aid rural hospitals, which tend to struggle because of many factors, including catering to older, sicker and lower-income populations less likely to have private health insurance or be able to pay their bills, declining inpatient care volumes and cuts to Medicaid reimbursement rates.

Expansion was supposed to take effect in June 2018, after voters made Maine the first state to pass expansion by referendum in 2017, but former Republican Gov. Paul LePage delayed implementation, resulting in a lawsuit against the state. It didn’t take effect until Gov. Janet Mills, a Democrat, implemented it just after taking office in January.

The U.S. Government Accountability Office found last year that rural hospitals in states that increased Medicaid eligibility and enrollment experienced fewer closures from 2013 to 2017. Those that closed were often preceded by financial struggles.

Three rural hospitals in Maine — St. Andrews Hospital, Parkview Adventist Medical Center and Southern Maine Health Care – Sanford Medical Center — have “closed,” meaning they no longer provide general, short-term, acute inpatient care since 2013 and only offer urgent or emergency care services, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.

The remainder still face challenges, according to the Maine Hospital Association, which said in legislative testimony earlier this year that rural hospitals lost $20 million over five years, saw double-digit decreases in surgeries and deliveries in recent years and forgave $70 million in uncompensated care to low-income people or those who don’t pay each year.

Jeff Austin, a lobbyist for the association, said he’s heard anecdotally that MaineCare’s expansion has made a difference here. He said that more people are enrolling and a one-time provision allows hospitals to retroactively screen patients who would have qualified for MaineCare when it was supposed to go into effect but instead were written off as unpaid care.

John Doyle, Northern Light’s vice president of finance, said the health care system overall has seen a 0.8 percent reduction in unpaid care overall and a 0.5 percent charity care reduction this fiscal year, which ends Sept. 30.

Crystal Landry, CEO of Penobscot Valley Hospital in Lincoln, which filed for Chapter 11 bankruptcy protection earlier this year after steep declines in patient admissions and a drop in patient volume during recent years, said the hospital has provided $440,000 worth of charity care this year, about $150,000 less than last year. But the hospital’s unpaid care overall is currently at $1.2 million, which is higher than last year.

“Our experience is that fewer people are working through the charity care process and more are just not paying the patient responsibility portion of their bill — whether it be deductible or no insurance,” she said.

Julie Hixson, a spokeswoman for Down East Community Hospital in Machias, said “it’s not glaringly obvious” if MaineCare’s expansion has made a dent in unpaid care, although she expects the situation may be clearer by the end of the year.

The hospital had $2.6 million in free care last year; according to the hospital’s annual report, the hospital lost another $2.9 million due to a patient’s lack of ability to pay during the same time period.

“We’re cautiously optimistic,” she said.



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