AUGUSTA, Maine — A state appeal of a federal government decision to cut about $20 million in funding from the state-run Riverview Psychiatric Center has been denied by a federal judge.

That means state lawmakers will now have to wrestle with filling the gap as they head into the second half of the 126th legislative session on Wednesday. That gap amounts to about 50 percent of the 92-bed forensic hospital’s budget.

Riverview houses some of the state’s most violent mental health patients, and has been in the spotlight in recent months after attacks by patients against staff and each other prompted an unannounced federal inspection of the facility in March 2013.

That audit determined the state was not compliant with federal rules it must follow to receive Medicare and Medicaid funding for patients at the facility and prompted the cut.

Meanwhile, DHHS officials are also reapplying for the federal funding in hopes it will be restored.

The ruling by an administrative law judge will be appealed, according to Maine Attorney General Janet Mills, who voiced disappointment in a memo to lawmakers this week and noted the ruling was based on a “technicality.”

Mills told lawmakers the decision will be appealed but it still punches an immediate hole into the state’s two-year budget that is already expected to be out of balance by nearly $100 million.

In August, lawmakers passed an emergency law, signed by Republican Gov. Paul LePage, that was meant to satisfy the federal government’s concerns over staff and patient safety, but a subsequent inspection of the facility by auditors from the federal Centers for Medicare and Medicaid Services determined the underlying concerns had not be addressed.

That law created the framework for expanding a mental health unit at the state prison in Warren, which was meant to alleviate Riverview of some of its most dangerous patients.

At the time of the change, lawmakers were assured by Maine DHHS Commissioner Mary Mayhew that the change would at least temporarily allay the federal government’s concerns about Riverview.

That failed to be the case.

On Tuesday, John Martins, a spokesman for DHHS, said the department was working closely with the attorney general’s office on the appeal.

“The initial termination decision made by the Centers for Medicare and Medicaid Services was wrong and has jeopardized access to vital psychiatric services to people with serious and persistent mental illness,” Martins wrote in an email. “We will work closely with the Office of the Attorney General to appeal the recent decision of the Administrative Law Judge in order to ensure these critical psychiatric services can be delivered to our clients.”

Meanwhile state lawmakers on the Legislature’s budget-writing Appropriations Committee took aim at the LePage administration for not fixing the safety issues in the first place.

“This is very frustrating that all along we’ve been asking the LePage administration about an adequate staffing plan and a competent management plan and they have been unwilling to face the facts,” state Rep. Mike Carey, D-Lewiston, said. “This ruling today goes along with their track record of mismanagement.”

He said since the initial ruling on the cut DHHS has not developed an alternative plan to make up for the lost revenue.

“They’ve just been hoping that this appeal wins and they will be refunded the money back from the beginning,” Carey said.

Carey said LePage could manage the shortfall by shifting funds around short-term, but with the federal ruling Tuesday, it is unlikely the the federal money would be restored in time to close the current budget gap.

Carey also noted that DHHS officials delayed telling lawmakers or the state’s attorney general about the possible funding cut early on and instead waited until the 11th hour.

LePage used the Riverview issue to call lawmakers into an emergency session last August, when they also approved a state borrowing package totaling about $150 million. That borrowing package meant for a host of infrastructure improvements statewide was approved by voters in November.

At the time, LePage said the safety of Riverview staff and patients was his top concern and warranted immediate action by the Legislature.

One of the incidents that prompted the federal audit involved a violent attack by a patient against a health care worker at Riverview. According to various news reports, the patient stabbed the worker multiple times with a pen. The same patient had been involved in previous violent attacks against staff.

In his decision, Administrative Law Judge Steven Kessel determined a corrective action plan put in place at Riverview by DHHS did not achieve what it intended to achieve. He also determined that DHHS did not have a legal right to appeal the federal government’s original determination that the facility was no longer eligible for federal funding.

Mills said the state now has 60 days to appeal Kessel’s ruling.

Scott Thistle

Scott Thistle is the State Politics Editor for the Lewiston Sun Journal. He has covered federal, state and local politics in Maine for nearly two decades.