Maine hospitals estimate they are owed $160 million in overdue Medicaid payments and that figure will double by the end of this budget cycle – bills that have piled up because the state has expanded its coverage of the poor but not its reimbursements.
The estimated $320 million debt includes both federal and state payments and dates back to patients seen starting in 2003 and running through the state’s current budget cycle, which ends in July of 2007.
The state’s share is roughly 36 percent of the total or $115 million and the rest is owed by the federal government, which will pay once the state does.
“Enrollment has been growing since the fall of 2002,” said Mary Mayhew of the Maine Hospital Association, “but hospital payments have not been updated to reflect that growth.”
The state’s Medicaid enrollment is now more than 260,000, and started to spike in September of 2002 with the expansion of health coverage for adults without children. Under that expansion, adults aged 19-64, under 100 percent of the poverty level, became eligible for coverage.
The state last year also expanded its coverage of parents, raising eligibility from 150 to 200 percent of federal poverty – or $39,000 for a family four. That expansion is expected to add another 10,000 enrollees this year.
Mayhew said the $320 million debt doesn’t address the rate of reimbursement, which the hospital association estimates at 75 cents on the dollar, but is driven by the actual numbers of patients seen.
Hospitals essentially want two things. They want to be paid back settlements for patients they’ve already seen and documented in audited reports going back to 2003, and they want the state to increase its payments in the years covered by the current state budget and going forward to reflect the increase in the Medicaid population.
The state acknowledges it owes the hospitals money.
A draft report from the Department of Health and Human Services on what is owed was handed out at an Appropriations Committee hearing last week. It estimates the state and federal government owe close to $254 million through the end of calendar year 2005. The department says it is still working on the report, according to the Office of Fiscal and Program Review.
The Maine Hospital Association estimates hospitals are owed $204.5 million through that same time period, with the remaining chunk of the $320 million debt adding up through 2006 and 2007.
The state has put in an additional $12.7 million in the supplemental budget to start chipping away at its portion of the debt. Hospitals say that will get them through what’s owed from 2003 and pay what’s owed to about one-third of the hospitals for 2004. But it does nothing for 2005 payments owed nor does it recognize the increase in volume this year and going forward.
“The problem is the payment is based on 2002 data before all the growth,” said Lisa Harvey-McPherson, director of Health Policy and Continuing Care at Eastern Maine Healthcare. Eastern Maine Medical Center is owed $17.9 million from 2004 and another $20.4 million for 2005.
“We keep digging ourselves deeper into this hole,” Harvey-McPherson said, and the state’s largest hospitals are often paid last because they’re owed so much.
“What people need to understand is it represents a cost-shift into private insurance,” because hospitals have to get money somewhere when the state doesn’t pay its Medicaid bill, she said.
There had been more money in the state budget last year to increase Medicaid payments to hospitals but it was used instead to make up for a drop in the federal Medicaid match rate and to pay an out-of-court settlement to 12 hospitals for debts owed going back to 1996.
Trish Riley, the head of the governor’s Office of Health Policy and Finance, said Gov. John Baldacci has been “investing each year to get back on track,” but did not expect the court settlement to essentially take all the money set aside to help get the hospitals more current in their payments.
Sen. Richard Rosen, R-Hancock and Penobscot, sits on the Health and Human Services Committee and used to be on the Appropriations Committee.
“I don’t think anybody is denying that a significant amount of money is owed to hospitals,” said Rosen. “There’s no disagreement on that issue.”
The problem, he said, is the state doesn’t have enough money.
“To balance its budget, the state lagged behind in timely reimbursements…and some could argue it’s been used to balance the state budget,” he said. The owed debt, Rosen added, “constitutes an interest-free loan from hospitals to the state.”
Medicaid Payments Owed Hospitals Through 2005
Mid Coast Hospital: $5.9 million
Stephens Memorial: $2.3 million
Northern Maine Medical Center: $3.9 million
New England Rehab Hospital: $1.3 million
Down East Community Hospital: $2.8 million
Cary Medical Center: $4 million
Mercy Hospital: $16.3 million
St. Joseph Hospital: $7.1 million
Penobscot Bay Medical Center: $4.3 million
Southern Maine Medical Center: $4.8 million
Goodall Hospital: $3.6 million
Bridgton Hospital: $2.7 million
Millinocket: $1.7 million
Maine Coast Memorial Hospital: $2.3 million
Redington-Fairview General Hospital: $3.6 million
Rumford Hospital: $2.7 million
Franklin Memorial Hospital: $6.3 million
Central Maine Medical Center: $21 million
MaineGeneral Medical Center: $12.2 million
Waldo County General Hospital: $1.4 million
York Hospital: $1 million
CA Dean Memorial Hospital: $357,000
St. Andrews Hospital: $550,000
Miles Memorial: $650,000
Houlton Regional Hospital: $522,448
Sebasticook Valley Hospital: $1.6 million
Mayo Regional Hospital: $2.6 million
Inland Hospital: $3.1 million
Aroostook Medical Center: $7.2 million
Maine Medical Center: $9.8 million
Eastern Maine Medical Center: $38.3 million
Parkview Adventist Medical Center: $1.4 million
Calais Regional Hospital: $2.5 million
Penobscot Valley: $1.7 million
St. Mary’s Regional Medical Center: $11.5 million
Blue Hill Memorial Hospital: $515,000
Mount Desert Island Hospital: $1.1 million
Spring Harbor: $2.3 million
Acadia Hospital: $7 million
(Information provided by the Maine Hospital Association for Medicaid payments owed through the end of calendar year 2005.)
Send questions/comments to the editors.
