Staff Writer
CARIBOU — It’s looking as if Cary Medical Center may start receiving payment on a long over due bill in the near future; though the debt hasn’t been forgotten, the state of Maine owes Cary Medical Center roughly $5 million in MaineCare bills from 2005, 2006 and 2007. “Basically what’s happened over a number of years is that the MaineCare program, which is Maine’s program for providing health care to low-income people, has been expanding its eligibility over the past few years in terms of how one qualifies to participate,” explained Director of Community Relations and Development at Cary Medical Center William Flagg. “While the state has been increasing the eligibility for the program, they haven’t really increased the reimbursement for the hospitals despite the increased services.”
According to Flagg, the state and the hospitals get together every year and come up with a determination of what they assume the volume of Medicaid is going to be for their hospital based on their history and other factors. The state then sends the hospital a check every week which totals the estimated expense of Medicaid for that year so that hospitals have the cash flow necessary to deal with the expenses related to providing care for these patients. At the end of the year, the state and the hospital sit down to negotiate a year-end settlement; if the hospital saw less Medicaid patients than they had predicted, the hospital would owe money back to the state; if the hospital saw more Medicaid patients than predicted, then the state would owe the hospital money.
“Essentially that’s what happened,” said Flagg. “As the Medicaid numbers expanded, hospitals got farther and farther behind in having the expenses paid for by the state and it got longer and longer for those settlements to come in. Cary Medical Center just received a settlement for the 2004 billing cycle in November of 2008,” he added.
According to Mary Mayhew, vice president of government affairs with the Maine Hospital Association, the state of Maine owes hospitals $424 million in Medicaid costs.
“Because of the federal matching rate, the state’s share of the bill would be about $140 million,” Mayhew said. “Governor Baldacci has estimated that the state will receive closer to $300 million in additional federal Medicaid money,” she explained. “The way it works is that as the state begins to benefit from the additional federal Medicaid money, general fund money will be freed up as it’s no longer needed due to federal match money the state will be receiving,” she added. “Those general fund savings then get swept into what is going to be a relief account, which the governor is currently working on prioritizing how relief account funds are spent.”
“Many hospitals just don’t have the operating margins to sustain year after year with shortfalls in terms of payments for services that they already have provided,” said Flagg. “I know that’s one thing that the Maine Hospital Association wants be certain that people understand; even though this is a stimulus package, it’s simply paying back money that’s been owed to hospitals for years,” he added. “It’s not a windfall of money for hospitals; it’s paying back historical debt that hospitals have already provided services towards.”
Though payment consistency may be an issue for the hospital, commitment to their mission hasn’t wavered.
“We want to provide services to these patients,” said Flagg, “we want people to have access to health care and we’re working to provide that care. The reality of the situation is that essentially, we need to get paid when we provide services. Primarily all of Maine’s hospitals are non-profit, and trying to absorb that kind of debt while still functioning and staying operational is a very tough thing,” Flagg explained.
