Analysis: Action by Maine Legislature may not help Maine get waiver for DHHS cuts

AUGUSTA — During a Dec. 15 press conference, Gov. Paul LePage said the Legislature will first have to approve his proposed cuts in the state's Medicaid program in order to receive a waiver from the federal health care law to make some of those reductions legal. 

The governor went so far as to say that legislative action was recommended by U.S. Department of Health and Human Services Secretary Kathleen Sebelius during a conversation she and the governor had last April.

But the Legislature's ratification of the governor's budget may have no bearing on whether or not Maine will receive waivers from the Affordable Care Act. According to a series of private interviews, legislative action isn't a factor in the federal waiver process at all. 

So far, the Center for Medicare and Medicaid Services, the federal agency within the federal HHS bureaucracy, has declined to confirm that the Legislature's ratification of LePage's $220 million in proposed Medicaid cuts is necessary to obtain the so-called Maintenance of Effort waiver.

Last week, the Sun Journal made several attempts to interview federal officials about the effects of legislative action and the specifics of LePage's conversation with Sebelius. CMS staff initially agreed to address the inquiries. However, after an exhaustive vetting process, CMS personnel ultimately issued a short statement that shed little light.

The agency's reluctance to field those questions may signal its unwillingness to get involved in a public dust-up with the LePage administration. However, it may also be related to the Obama administration's effort to steer controversy away from its signature legislative achievement, the Affordable Care Act. 

Still, Augusta lawmakers are hoping to get a definitive answer from the feds before agreeing to about $37 million in Medicaid cuts that will require a waiver. On Monday, Rep. John Martin, D-Eagle Lake, sent a letter to Sebelius requesting clarification of the process.

"The LePage Administration has indicated that they believe we must enact legislation before your department would take action on any waiver request," Martin wrote. "Is this in fact your policy?"

Interviews with various officials suggests it isn't.  

U.S. Rep. Chellie Pingree, D-Maine, said she believes the Legislature's passage of LePage's proposed millions in MaineCare cuts is irrelevant to obtaining the so-called Maintenance of Effort waiver.

"There is simply no requirement for legislative action to get a waiver," Pingree said. "We’ve been told that at least some proposed cuts — like kicking seniors off the Medicare Savings Program — would violate the Maintenance of Effort part of the law. And I’m not at all convinced the federal government will grant waivers if the Legislature passes some of the other cuts they’ve been talking about."

In fact, it appears as though the LePage administration's request for the Legislature's approval is more about politics than procedure.

Since the governor's remarks about his conversation with Sebelius, the LePage administration has reframed its argument for legislative action. Mary Mayhew, commissioner of Maine's Department of Health and Human Services, told the Sun Journal last week that "she is absolutely convinced that the federal government won't grant us the waivers without the Legislature's approval."

Mayhew was careful not to call legislative approval a requirement. Adrienne Bennett, LePage's spokeswoman, said the administration knew that it could apply for a waiver "at any time without the Legislature."

"This (legislative action) is about putting pressure (on the federal government)," Bennett said.

Though unpopular, the administration views its Medicaid proposal as a critical element to meet its constitutional requirement to bridge the state's budget gap while also fixing structural problems in MaineCare.  

However, questions remain about LePage's claim that Sebelius instructed him to first win legislative approval for budget. In effect, the HHS secretary, a Democrat, would have been recommending legislative action that would result in pressure on her own agency and the Obama administration.

"I will not get a waiver from the federal government until the Legislature says they want it, and the Legislature says it’s illegal," LePage told reporters. "Well, put me in jail and we’ll go from there."

Regardless of the details of the LePage-Sebelius conversation, the federal government has yet to grant a waiver to any state. Few have asked for one.

HHS denied Arizona's request last year for MOE exemptions during that state's effort to reduce its Medicaid program. The Arizona request was accompanied by legislative action.

HHS is still considering a waiver for Wisconsin. That request was also accompanied by legislative action. 

To this point few other states have applied for the Affordable Care Act waiver. However, the Obama administration appears to be facing mounting political pressure from governors to loosen the MOE restrictions.

Earlier this year 33 Republican governors, including LePage, signed a letter saying the MOE provision was onerous and prevented states from effectively managing their respective Medicaid programs. The letter, endorsed and promoted by the Republican Governors Association, has been dismissed by some Democrats as another GOP attempt to undercut the health care law.

However, Kaiser Health News reported last year that the National Governors Association, which represents Republicans and Democrats, also requested more Medicaid flexibility to address budget shortfalls.  

The pressure presents a dilemma for the Obama administration, which is balancing the viability of its signature legislative achievement, the Affordable Care Act, with the perception that the law is hamstringing governors' budget decisions. 

Sebelius attempted to walk that line last year when she wrote in a letter to the NGA that her department was willing to work with states to provide flexibility in their respective Medicaid programs.

Sebelius' letter failed to win over Mike Schrimpf, a spokesman for the Republican Governors Association.

"Secretary Sebelius's cleverly buried response to governors is that she is still studying the issue," Schrimpf told Kaiser Health News last February. "It has been nearly one month since Republican governors formally asked federal leaders to lift the excessive constraints placed on state governments by the maintenance of effort requirements. Governors continue to look forward to a direct response."

Despite the call for additional flexibility in Medicaid budgets, the joint state-federal program is expected to expand with the implementation of the federal health care law in 2014. In fact, some of the programs that LePage has proposed cutting would be reinstated upon the adoption of the ACA. 

Medicaid will cover 16 million more people in 2014. While the federal government will pay for the increased coverage for the first three years, the bulk of the funding responsibility will gradually fall back to the states by 2020.

However, that doesn't hearten advocates for the poor and elderly, who say the governor's plan to take away health care for some individuals for two years means they'll be sicker in 2014. 

The Legislature's Appropriations Committee is expected to discuss the governor's Medicaid proposal on Tuesday.

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JOHN PAINTER's picture

There are several issues

There are several issues going on within Maine's Department of Health and Human Services which I have yet to see anyone from within the Department clearly articulate to the Legislature or public for that matter. Let alone tackling the intricacies of the ACA.

In my mind this raises the question of whether there is really anyone who understands the full range of problems and as a result appropriate ways to address them. Having worked in behavioral health for many years I am familiar with mental health policy, services and practices which are often mismatched. I hear from friends who work in primary health care there are comparable issues. In terms of our behavioral health service system, we clearly have some issues which have been brewing for years.

Maine clearly has some long standing issues with its Medicaid program which are outside the debate over the ACA or the politics embroiled between the Blaine House and Legislature; 1) Maine had/has some PNMI programs with more than 15 beds allowed by CMS, 2) there were/are questions from CMS about whether our state has mixed room & board costs (which are not reimbursable through Medicaid) into some of costs we billed the Federal government for, 3) Maine has consistently told CMS that PNMI is just a billing method and not a service despite Section 97 of the MaineCare Benefits Manual clearly stating PNMI is a bundled service - this is an important distinction because since 2009 Maine DHHS has denied people access to certain PNMI services which it offers to others.

These are real, serious, and systemic issues which require the Department to address through modification of our state Medicaid plan, and the Legislature to understand the nature of the problems to better understand funding requirements.

GARY SAVARD's picture

Obama's Affordable Care Act

Obama's Affordable Care Act is a perfect example of the irresponsible governing that has been a trademark of his administration. In three years he has pissed away Trillions of dollars we don't have, and then passed laws such as this one that mandates that States pick up part, and in a few years, all of the tab, with money they also don't have. All of this in keeping with his concerted effort to mine democratic votes from anywhere they can be dredged up.


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