AUGUSTA, Maine — Hospital executives and their representatives lined up Wednesday to tell legislators that the two-year budget offered by Republican Gov. Paul LePage would damage the state’s health care system and put hospitals deeper in debt if passed as is.
Members of the Legislature’s budget-writing Appropriations and Health and Human Services committees are meeting jointly this week to review LePage’s budget proposals as they relate to the Department of Health and Human Services.
DHHS is the state’s largest agency, spending about $3.9 billion in state and federal funds in 2014, of which about $1.8 billion comes from the state’s general fund.
Especially at risk, according to hospital officials and health care professionals who spoke Wednesday, are Maine’s smaller rural hospitals that serve as critical access hospitals.
Critical access hospitals are those that have fewer than 25 acute care beds available.
LePage’s proposal, presented by DHHS Commissioner Mary Mayhew, offers a complex set of changes that includes increasing Medicaid reimbursement rates for primary care physicians while reducing those rates for hospitals.
Jeff Austin, who represents the Maine Hospital Association, said combined with the loss of federal matching funds that LePage’s proposed changes would trigger, the state’s hospitals would lose at least $55 million a year.
Austin said that price tag does not include the new costs hospitals would face if LePage’s proposal to allow cities and towns to apply property taxes to nonprofits is enacted.
“This is a staggering amount of cuts to force hospitals to afford,” Austin said.
Austin also said the cuts were not being made to balance the state’s Health and Human Services budget but to redirect the money to other programs and initiatives.
“If the state wants to increase spending on other programs, it needs to identify new revenues to fund that spending and not cannibalize the rest of Medicaid,” Austin said.
Frank McGinty, executive vice president and treasurer for MaineHealth, a network of hospitals that includes Maine Medical Center in Portland, said LePage’s budget would result in fewer health care services for the communities they serve. The cuts would also lead to fewer health care jobs, especially in rural parts of the state, McGinty said.
The impact of those lost services and the availability of health care would fall heaviest on the state’s uninsured and its poorest residents, according to McGinty.
Charity care at the hospitals McGinty represents rose from $33 million a year to $44 million annually in the past four years, in large part because changes to eligibility standards for MaineCare removed roughly 60,000 individuals from the government-funded health care program.
The additional changes would only add to that tally, McGinty said.
“My colleagues and I urge you to think very carefully before allowing these changes in the MaineCare program’s policy to tear a gaping hole in the safety net for the more than 100,000 Maine residents who are uninsured,” McGinty said.
Both he and Austin said LePage’s efforts to provide higher reimbursement rates for primary care physicians were needed and “laudable,” but those rates shouldn’t be increased at a cost to hospitals.
Combined with the property tax proposals, the rate reimbursement changes would cost Maine Medical Center more than $36 million annually, according to McGinty.
Under the proposal, DHHS would reimburse hospitals for emergency department visits for nonemergency issues at the same rate as it reimburses primary care providers.
Mayhew noted collaborative efforts with hospitals to reduce the use of the emergency room by Medicaid patients with education and outreach have saved the state’s Medicaid program $9 million.
Mayhew said this reimbursement rate change would help reduce unnecessary emergency department visits but Austin said that’s an illogical assumption.
“This is a penalty imposed on hospitals, who, under federal law, must keep their emergency department open to all individuals 24 hours a day, 365 days a year,” Austin said. “Cutting hospital reimbursement is not a disincentive to Medicaid recipients to use the service.”
Mayhew has also said repeatedly that the state’s Medicaid budget, for the first time in decades, was balanced and not facing a financial crisis.
It was a point committee members also reiterated as they spoke in opposition to changes that could create dramatic financial hardships for the state’s hospitals, which are in many cases also the largest employers for a given region.
Rep. Linda Sanborn, D-Gorham, a doctor, said she hoped hospital executives, doctors and other well-paid individuals who were opposing the cuts in LePage’s budget would likewise oppose his proposals to reduce the state’s income tax and eliminate its estate tax.
“We’ve been talking about pitting one of these poor health care choices against another and the reality is, the state is not in the red, we are not in a crisis and we do not have to be making any of these cuts,” Sanborn said. “I think we keep missing that point and for the folks that have really good incomes in here, I hope that you will stand up against the income tax cuts and estate tax cuts that are proposed in this budget so we don’t have to decide who else in the health care world needs to be cut inappropriately.”
Meanwhile, LePage promised an audience in Bangor on Wednesday he would “spend the rest of his days” fighting opponents of income tax cuts.
The committees will continue their hearings on the DHHS budget proposals on Thursday.