Gov. John Baldacci has approved another $12.5 million financial order to help pay Medicaid bills on top of a $24 million transfer approved earlier this summer – money some expect will have to be made up in part through a supplemental budget when legislators return in January.
The latest transfer, signed Sept. 7 by Baldacci and awaiting emergency approval by members of the Appropriations Committee, is largely to pay bills for mental health, mental retardation and substance abuse services.
The Department of Health and Human Services said the money is needed because the Medicaid billing computer is now paying old claims it couldn’t process before. The order essentially allows the department to borrow dollars budgeted for the third quarter of this fiscal year and use them now. It is hoped the money can be replaced when the department collects interim payments it sent out to pay providers when the billing system wasn’t working.
The $24 million transfer was to pay for bills the state had hoped the federal government would largely cover, but it did not because of its dissatisfaction with the progress in fixing the billing system. The department now says that just under $15 million of that could be reimbursable at some point, but the state will have to pick up $9 million out of the general fund.
“I think every indication is we’re heading toward a significant shortfall in the fourth quarter in the Medicaid account,” said Sen. Richard Rosen, R-Hancock, a member of the Health and Human Service Committee.
“Even if the department is successful in recouping the flood of money that was released to try and solve the problem in the short run,” he said, the 2007 Medicaid budget was “unrealistically low.”
The department has collected $273 million back in interim or estimated payments to health care providers serving Medicaid patients, but still has $236 million to go by the end of the fiscal year next June. The payments were sent out after the billing system started rejecting claims in January of 2005, and at the height of the problem more than 600,000 bills were stuck in the system.
Rep. Joe Brannigan, D-Portland, the House chairman of the Appropriations Committee, agreed the transfer requests from the Department of Health and Human Services were adding up, but said, “I think it’s something that has to be done.”
“We know there was really some underfunding,” in the budget, he said, including budgeted savings of $10 million by switching some services to managed care. That isn’t going to happen this year.
“They’re probably going be coming in with a supplemental budget in January,” he said. “This isn’t totally unusual.”
“It’s big,” he said of this summer’s transfers, “but in the scheme of how big their numbers are, it isn’t as huge as it seems to you and I.”
While Brannigan said he already sent in his approval for the latest transfer request, Sen. Richard Nass, R-York, who also is on the Appropriations Committee, said he’s holding off until the committee meets at the end of the month.
“I’d like an explanation about what were going to do about it,” he said of the current funding shortage.
Sen. Peggy Rotundo, D-Androscoggin, the Senate chairman of Appropriations, said she supported the latest transfer, but, “This is obviously something we have to monitor very carefully.”
“We do have questions in connection with these transfers and I’m sure there will be discussion” at the committee’s next meeting, she said, adding she didn’t know if a supplemental budget would be needed.
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