Time to act on hospital payment plan

With talk of tanning beds, selling the Blaine House and other topics dominating the conversation in Augusta these days, I am concerned we are taking our eye off the ball.

We are about halfway through the legislative session and are yet to take substantive action on Gov. Paul LePage’s plan to pay the $484 million the state owes to Maine hospitals. Outside of passing a two-year budget, I believe it would be difficult to find a more important issue in front of lawmakers this session.

The massive debt was built up over a period of years, as the state continually gave the hospitals “IOUs” for treating Medicaid patients, in essence providing “free” medical care at the cost of Maine taxpayers. This has had a profound impact on the hospitals’ ability to pay their own bills, keep adequate staffing levels and carry out planned expansion plans.

Rather than continuing to pass this debt on to future legislatures, the governor has come up with a bold, innovative plan to pay off our hospitals. It calls for issuing a $186 million revenue bond that would be funded through future liquor sales. The payment to hospitals would trigger $298 million in federal matching funds.

The governor has also committed to releasing $105 million in voter approved general obligation bonds for transportation, conservation, and other projects. He is also supporting a $100 million government facilities bond to replace the Maine Correctional Center in Windham.

This plan makes sense for a number of reasons.

The hospital payment and bond packages would inject about $700 million into Maine’s economy, creating new jobs in health care, construction and other areas. Those new paychecks going out would, in turn, lead to increased consumer activity in Maine.

The revenue bond approach makes great fiscal sense for Maine. It would allow us to borrow at a very low rate (probably 3-4 percent). The debt from a revenue bond would not be reflected on the state’s books, which would protect our credit rating.

Now is the time to take advantage of the federal matching rate for the hospital repayment.

Back in 2010, the rate for Medicaid reimbursements was 75 cents on the dollar. Today it’s 63 cents. It is very likely that the longer we wait to pay the hospitals, the less we’ll get in the form of matching funds from the federal government.

It’s also the right thing to do. We have a moral obligation to pay Maine hospitals the money they are owed.

Many of the people I represent in Androscoggin County work at area hospitals. Here’s a list of how much those institutions are owed.

• Central Maine Medical Center, Lewiston: $50.2 million

• St. Mary’s Regional Medical Center, Lewiston: $28.8 million

• Mid Coast Hospital, Brunswick: $13.8 million

• Parkview Adventist Medical Center, Brunswick: $3.5 million

St. Mary’s hospital in Lewiston recently announced it would have to restructure and eliminate 25 jobs, largely due to the state’s inability to fully reimburse Medicaid costs.

At Central Maine Medical Center, administrators say they are unable to renovate the 30-year-old maternity and neo-natal unit for the same reason.

All over Maine, the same scenario is playing out at hospitals. Projects are on hold, workers are being laid off and positions are going unfilled while these vital institutions wait to get the money that is owed to them.

Gov. LePage has put forth a responsible plan to pay our hospital bill. The time to act on it is now.

Sen. Garrett Mason, R-Androscoggin, serves on the Legislature’s Veterans and Legal Affairs Committee.

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Comments

Bob Wright's picture

I take it you disagreed with

I take it you disagreed with me Jerry. What did you disagree with? That we owe the debt or it needs to be paid?

JERRY ARIPEZ's picture

You assumed

Wrong, I agree the money should be paid, that is always the right thing to do...What is wrong is the dog and pony show that LePage is performing when he shouldn't be looking in the mouth of the gift horse with the ACA which Governors are using to do just that, paying the hospitals and creating lower cost for those using the Medicare systems.....

Noel Foss's picture

Our massive debt to the hospitals

Came about as a result of the last expansion of medicaid during the 2000's, a decision which was based in part on the promise of additional federal repayment. The problem was that as a state we couldn't seem to cover our part of the tab, and the Fed won't pay unless we cover our share first. Plus, we've already seen a decrease in amount that the Fed is willing to cover just since we started accruing this debt.
Now the proposal is to bring more people on board (increasing the bills that the state has to pay each year) in order to garner that 90% match from the federal government? If we weren't able to pay the tab for the last increase in enrollment, how does increasing enrollment again (and therefore bumping that yearly tab even more) make sense?
Yes, the Fed is promising (I won't even get into how often the government has managed to sidestep paying for things in the past, or asking where the funding for this extra 90% is supposed to come from when the jokers in Washington can't even write a budget for the year) to match payments up to 90%. But that means that Maine's still on the hook for that extra 10%. I'll admit that 10% doesn't seem like much, but if you can't afford your current mortgage payment, you don't refinance for a payment that's 10% higher than what you're currently paying.
It's a tough call, and I don't think that agreeing to assume more debt in the future should be a requirement for paying off the existing debt we have right now.

Bob Wright's picture

None of what you wrote

None of what you wrote matters Jerry. What matters is we owe the debt. We need to pay it.

JERRY ARIPEZ's picture

Agreed

So call your Guv and tell him to put into ACTION the ACA Medicare Expansion and that would be concrete and a starter of putting the peoples money where his mouth is...

Thank You Senator Mason

It's good to know as one of your constituents, Senator Mason, that you are on the side of saving jobs. The Proof is with the information that the hospitals in Androscoggin County who reported to you what the loss will be if the debt continues. I and many of us are disturbed that this debt has gone on for so long and just how much it is that is owed to these hospitals. All of them in the millions and tens of millions that we owe. The hospitals never turn anyone away even if they have no insurance. It's time we take care of them and keep the great service going!

"St. Mary’s hospital in Lewiston recently announced it would have to restructure and eliminate 25 jobs, largely due to the state’s inability to fully reimburse Medicaid costs.

At Central Maine Medical Center, administrators say they are unable to renovate the 30-year-old maternity and neo-natal unit for the same reason.

All over Maine, the same scenario is playing out at hospitals. Projects are on hold, workers are being laid off and positions are going unfilled while these vital institutions wait to get the money that is owed to them."

JERRY ARIPEZ's picture

Seriously, he missed the boat.

If LePage really cared about the owed monies he would've used the ACA Medicare expansion, just like the other nay saying Repub guv's in 6 states that, wisely saw the rewards of the monies to help pay back owed monies and much more.

Since LePage sits on his hands on that alone says a whole lot about his character and real concerns of fixing the problem and much more of helping those in need of health care that can't afford it for the themselves and much more the children and seniors.

JERRY ARIPEZ's picture

Leaving out one;

Large important FACT that had the low minded Guv had put the ACA Expansion HealthCare into affect, it would help the HOSPITALS of getting payment of PAST and for future non insured patients, that the hospitals would not have to absorb.

Sorry folks that dog don't hunt with LePage trying to place the burden and blame on the people of Maine as it is their responsibility, no less to say about his own actions of failure.

JERRY ARIPEZ's picture

All speculation with much more lies and BS...

The hospital payment and bond packages would inject about $700 million into Maine’s economy, creating new jobs in health care, construction and other areas. Those new paychecks going out would, in turn, lead to increased consumer activity in Maine.

WHERE IS THE PROOF?
This Senator, with no backup or proof of any assurance, is speaking through his own (backside) of speculations of IF's and But's....

Remember when 40 hour work weeks and weekends were going to kill the economy per repubs or min wages (now 50% of what they were in 1965, inflation adjusted). Or child labor laws.

Remember when repubs said tripling wages by FORD would kill the economy.

Remember when passing worker safety laws were going to kill the economy per repubs or overtime would?

Remember when repubs were against the GI bill after WW2 calling it a dole.

Remember when repubs were against CAFE standards saying that would kill the country....or emission standards.

Except we ended up with fuel injection , twice the mileage, faster more reliable vehicles..

Remember when repubs were against IKE’s (yes their own president) interstate highways system, the largest public works project in the history of the world..

Remember when they were against soc sec and Medicare...

Remember when they said austerity would fix the 1929 Depression or the 2008 depression.

Remember when they said we could not save the auto industry....

Remember when they said the Clinton Tax increase would kill the economy.

Remember when they said the Reagan and Bush tax cuts would pay for themselves.

Remember when they said the Iraq war would pay for itself and only last 2 months...

Remember when they said the Bush tax cuts would create 24 million jobs, missed by 25 million...

Have they ever been right?

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