LePage signs hospital debt repayment bill into law

AUGUSTA — Gov. Paul LePage achieved one of his top priorities of the 2013 legislative session Friday when he signed into law a bill that sets the stage to pay off the state's $183.5 million debt to hospitals.

The bill,  passed late Thursday night by the Legislature, would use revenue from a renegotiated contract for the state's wholesale liquor business to finance revenue bonds to pay 39 hospitals for services they provided under MaineCare, the state's Medicaid program.

A refinanced contract could bring as much as $40 million in new cash flow to the state on an annual basis. Some of that revenue would be used to finance a lump-sum payment to hospitals.

Maine is one of only a handful of states that controls the importation and distribution of hard liquor. In 2004 the state leased those rights for 10 years to a private company for $125 million.

Steven Michaud, president of the Maine Hospital Association, said the repayment would pump an additional $300 million into the state's economy in federal matching funds.

He said the news of the bill's passage and that LePage had signed it quickly into law would remove "a huge, huge financial anchor from the necks of our members."

The one-time payment for past debts would help hospitals, many of which are depending on lines of credit to manage basic expenses such as payroll.

"It doesn't help you with ongoing problems, which they have a lot of right now," Michaud said. "But it clearly will have a favorable impact in terms of jobs, especially retention right now."

Michaud said the back payment would put some of the state's largest employers on more solid financial footing because they would no longer be incurring the costs of interest on that credit.

LePage signed the bill Friday with little fanfare and without ceremony.

“Paying our bills is the right thing to do," LePage said. "It’s just unfortunate that Democrats waited so long to make the right decision for the people of Maine.” 

The Democrat-controlled Legislature earlier sent LePage a bill linking the debt repayment plan with legislation that would have allowed the state to accept federal money under the Affordable Care Act to expand MaineCare.

LePage vetoed that measure but said that if lawmakers separated the issues he would release $200 million in voter-approved revenue bonds.

As a good-faith measure, he also asked State Treasurer Neria Douglass to prepare those bonds for issuance via a letter sent May 23.

"As I have said all along, once we have our fiscal house in order, we will be in a position to release the authorized bonds," LePage wrote. "I hope (Douglass) will act quickly to ensure our economy can get back to work.”

Chuck Gill, a spokesman for Central Maine Medical Center in Lewiston, said news that the bill had been signed came as a relief. With the state's share and the federal match, his hospital will receive an estimated $45 million for unpaid services.

"Kudos to Gov. LePage," Gill said. "He's championed this effort all along and stuck with it until it got done." He said the infusion of cash was a big deal, but it wouldn't solve all of the financial issues facing hospitals, including about $58 million in MaineCare cuts. He said the federal budget sequester was costing CMMC about $500,000 a month.

"We have a lot of cuts on the horizon on the federal side, so we are all dealing with that," Gill said. "It sure helps, but it clearly doesn't solve all the problems. There are a lot of issues facing health care in America and hospitals here in Maine."

Gill noted that state lawmakers have passed laws that require the state to pay for its MaineCare costs as they are incurred. Democrats have been quick to note that the so-called "paygo" system was passed under former Democratic Gov. John Baldacci and it has kept the state's hospital debt from continuing to grow. 

Democrats in the Legislature have said paying the hospital debt was a priority for them but making sure as many Mainers as possible have insurance coverage will ultimately bring down the overall cost of care and will reduce the amount of free care hospitals provide to those with little or no income.

Lawmakers late Thursday also passed a bill that expands eligibility for MaineCare to about 70,000 low-income individuals without children. The first three years of that program's costs would be paid by the federal government. The federal match gradually drops to 90 percent by 2020.

Republicans have been reluctant to endorse the expansion because, they say, it will eventually cost state taxpayers as much as $70 million a year.

The fate of that legislation remained uncertain Friday, although it should land on the governor's desk within the next few days.

sthistle@sunjournal.com

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Comments

Brian Allen Small's picture

No Crickets Here!

Just the usual Moon Bats!

CLAIRE GAMACHE's picture

The other shoe

So the governor got the money for the hospitals. It's pretty clear to me they would have gotten it anyway without the histrionics and without his holding the bonds hostage. Now that it will cost the state several million more he says he will sign the bonds. Perhaps now after three years Maine will climb out of the job creation hole he has given us, the "Open for business" sign notwithstanding. According to the latest Pew report Maine is one of three states nationwide that is showing a job loss. Vermont has added over 5,000 jobs last year while Maine dropped 1,500. It's not a coincidence that Wisconsin, and his soul mate Walker, is one of the other three. So perhaps in his re-election blather the governor can explain why he felt it necessary to put us in the hole for three years to accomplish something that would have happened anyway. Everybody said from the start the hospitals would be repaid. Now we will see what other hole he puts us in with the budget.

Steve  Dosh's picture

Claire , Father's day 2 0 1

Claire , Father's day 2 0 1 3
. .To be a bit more precise on my previous remarks , we gave national security over to private firms under Bush - Cheney & ( former ) Admiral Poindexter when they set up Homeland Security and the T S A after 9.11 . Ed Rex did a good Poindexter analysis in here a couple of days ago . .
Instead of making things simpler they ( the ƒools ) simply made it more complicated i.e., the alphabet soup of federal acronyms including TSA DHS NSA FBI CIA DIA DEA Secret Service (SS). The Treasury's ATF , National Park Police , you name it and we are suppose to feel safer now
This is - h o w - the Republicans add their conies to the U S federal government dole
" Any third rate engineer can make something more complicated . It takes a first rate engineer to make it simple again ." -- E.F. Schumacher ," Small is Beautiful " ? 1 9 7 4
hth ? /s Steve

PAUL ST JEAN's picture

"Everybody said from the

"Everybody said from the start the hospitals would be repaid."
Maybe, but what "everybody" didn't say is that every time the bill crossed the governor's desk there would be unrelated add-on's attached to it. He made it clear from the start that if they sent him a clean bill, he would sign. Not that complicated if the dems can keep themselves from continually screwing around with things.

Put us in a hole? He's been

Put us in a hole? He's been trying to dig us out of the hole the Dems have dug over the last 30 years.

PAUL ST JEAN's picture

And they're hissing and

And they're hissing and clawing every inch of the way.

CLAIRE GAMACHE's picture

The hole

Being one of three states nationwide losing jobs is not a hole we have been in for 30 years. Shutting down the government and vetoing everything in sight is not a hole we have been for 30 years. Holding citizen approved bonds hostage is not a hole we have been in for 30 years. What you mean is that he is trying to undo any progress in worker benefits, city services, property ownership, care for the disabled and education for our children that has occurred in this state in the last 30 years.

Maybe if the Democratic

Maybe if the Democratic legislature would work more with the governor, things would be getting better more quicker. The GOP has only had control of the state legislature 2 years (2010-2012) out of the last 30 years. All they want to do is add new taxes and fees.

Uhm... who was it that

Uhm... who was it that refused to meet with Democratic leaders at the beginning of the session? Who was it that said in a closed meeting last Fall that he was planning someothing that would make the Democrats mad? Yep, your favorite governor.

Democrats have had a much easier time working with their GOP cohorts in the legislature than they do with the Giov.

He has done nothing for the Great State of Maine but bring ridicule to his Office and a budget proposal that if followed would have a harsher effect on our (property) taxes than anything the dems could come up with.

Maybe if the Democratic

Maybe if the Democratic legislature would work more with the governor, things would be getting better more quicker. The GOP has only had control of the state legislature 2 years (2010-2012) out of the last 30 years. All the Dems want to do is add new taxes and fees.

AL PELLETIER's picture

Obviously Dennis

You don't own a home in Maine and pay property taxes or you've got rocks in your head! Which is it?

I own a home in Maine and

I own a home in Maine and I've got common sense in my head. Something thats lacking with most liberals these days. We are taxed enough with federal, state and local taxes. We dont need any more fees either, by the way they are taxes too.

Great job Governor!

Great job Governor!

Steve  Dosh's picture

LePage signs hospital debt repayment bill into law

Mainers , Friday Flag Day 13:40 hst
. . "The fate of that legislation remained uncertain Friday, although it should land on the governor's desk within the next few days. " Prevention is always the best cure ? Remember that next time you think about \/oting Republican hth ? Steve

Mark Elliott's picture

insert {{ crickets chirping

insert {{ crickets chirping }} here

Did all the usual liberals get banned today??

HELLO..........HELlo...........Hello.........hello........is anybody in here........here.........here........here?

AL PELLETIER's picture

No crickets here

I'm glad to see the hospitals receive the money due them. It would not have taken three years if Lepage hadn't been such an a--h--- and if he would have worked more harmoniously with the legislature to get it done.

Does kind of make one wonder

Does kind of make one wonder why, when he had a more or less friendly legislature in his first two years, he didn't even make a proposal. Nah, couldn't be because he wanted to force this confrontation with the Dems. Not al all.

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