Maine Medical Center in Portland. Credit: Troy R. Bennett / BDN

Maine hospitals are expressing concerns about a reduction in reimbursements that’s included in Gov. Janet Mills proposed supplemental state budget. What appears to be a small cut will cost them millions of dollars in future years.

At first glance, the $300,000 cut to payments hospitals receive for outpatient services does not seem too significant, but Jeff Austin of the Maine Hospital Association said the language continues the cut into future budgets.

“It is a cut to hospital outpatient reimbursement. The supplemental budget is listed as a $300,000 cut. The cut actually total is carried forward into the biennium. When this is fully implemented, this is a $7 million-a-year cut,” he said.

Some hospitals testified in opposition to the proposal Tuesday before the state Appropriations Committee. Katie Harris of the state’s largest health care provider, MaineHealth, said the organization provides services in 11 of the state’s 16 counties and experienced significant losses from the pandemic.

“It will impact us to the tune of about $3.1 million annually, so it is something we can ill afford right now,” she said.

Overall, hospitals receive hundreds of millions of dollars a year in state reimbursement for services provided under MaineCare, the state’s name for Medicaid. The pandemic has caused havoc on hospital budgets — about $650 million in losses — while emergency federal funding covered about $350 million, Austin said.

“It is simply wrong during a pandemic to ask your members who are on the front line fighting this pandemic and have been doing it since Day One to be one of the few policy cuts in this budget,” he said.

In a statement, Health and Human Services spokesperson Robert Long said the proposal is the result of a federal requirement and would “right size reimbursements.” The department has been working with providers, including hospitals on the proposal.

Hearings on the supplemental budget continue this week with the Appropriations Committee starting work on what they will recommend to the full Legislature next week.

This article appears through a media partnership with Maine Public.