Hospitals want the state to pay up

12:30 PM, Feb 15, 2013   |    comments
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PORTLAND, Maine (NEWS CENTER) -- Hospitals are considered a crucial part of our society, they not only provide medical care but serve as one of the Maine's largest employers.

 But nearly 40 hospitals face an uncertain future as the state's debt in Medicaid reimbursements approaches a half a billion dollars. The outstanding bill has already forced some hospitals to lay off employees and delay payments to creditors -- and officials say they still don't know when they will get paid. When did the problem begin and how did the state fall so far behind?

They employ more than 25,000 people across the state. In rural areas, hospitals are often the largest employers. But 39 of the state's hospitals are staring down a financial crisis, which officials say is getting worse as time drags on. 

"Our nine member hospitals including Maine Medical Center are owed approximately $155 million dollars and yes that is a large amount of money," said Frank McGinty, Executive Vice President of Maine Health. 

The state owes the hospitals $186 million in overdue Medicaid reimbursements, also known as Maine Care. It must be paid to trigger about $300 million in federal matching funds hospitals say are desperately needed. 

According to the Maine Department of Health and Human Services, the Medicaid debt for medical services for low-income Mainers, affects hospitals from Southern Maine to Aroostook County. Eastern Maine Medical Center in Bangor tops the list at $72 million. Aroostook County Medical Center in Presque Isle is owed about $12 million.

The current debt racked up from 2009 through June of last year. The Maine Hospital Association recently stepped their lobbying efforts -- running ads like this one in local newspapers and meeting with lawmakers. President Steven Michaud says the debt began piling up in the mid-2000's when the state expanded it's Maine Care rolls. But Michaud says the state didn't increase it's weekly payments and failed to settle up with at the end of each year.

The debt is definitely putting a financial strain on hospitals, including Central Maine Medical Center here in Lewiston. The hospital is not filling certain jobs and they are putting off building improvements such as renovating the hospital's maternity unit.

CMMC is owed $50 million and is losing $3 million a year in interest. The hospital has also had to take out of a line of credit to help pay the bills. The hospital hopes to hold off on eliminating jobs as long as it can. Two years ago, .Governor LePage paid off part of the debt, which helped stop some of the bleeding, but it was only a minor reprieve. CMMC spokesman, Chuck Gill says hospitals welcome the Governor's plan to pay-off the debt through a revenue bond on the state's future liquor sales.

'It would be a new source of revenue, when revenue is scarce in Augusta, so that is encouraging, that's a option, there may be other options , but that's an option that should be taken seriously,' said Gill.

While Democratic leaders in both houses of the legislature have stated publicly that the state must pay it's bills, it's not known how or when that will happen. But hospitals say one thing is certain, if the debt isn't paid soon there will be more lay-offs, services will be eliminated and credit ratings will fall -- which will have a ripple affect across the entire state economy.

Legislators are expected to take up the plan to issue a revenue bond ont he state's future liquor sales sometime next month.

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