AUGUSTA – State workers unfamiliar with a new computer system mandated by the federal government are the reason the state isn’t paying some bills to 7,000 health service providers.

Providers who care for the mentally ill, mentally retarded, disabled, foster children and the elderly in nursing homes were so desperate they called a State House news conference Wednesday.

Representing agencies from across Maine, they asked Gov. John Baldacci and the state Department of Health and Human Services to fix the problem immediately, said Rep. Arthur Lerman, D-Augusta, who is a provider himself.

Lerman is executive director of Support Solutions in Lewiston, an agency that provides services to the disabled. He said his agency is owed about $300,000. Support Solutions has made payroll, but if it doesn’t get money soon, “The staff will get notices their health insurance will be canceled due to lack of payment,” he said. “We’re juggling.”

By Lerman’s account, the state is entering its fourth week of not paying all the Medicaid bills, about $50 million out of $124 million that should have been paid. His agency and others are meeting payroll through bank loans, and a few small agencies have laid off workers or closed. “We just don’t know how much we’re going to get (and) when,” Lerman said.

Department of Human Services spokesman Michael Norton said Wednesday that his department is working to correct the problem, and is making emergency contingency payments to cash-strapped agencies so they don’t have to close or lay off workers. On Friday alone, $16 million went out as emergency payments, he said.

It could be weeks before the complicated new system is working properly, Norton said, adding that things are headed in the right direction. Of the $31 million weekly that should be paid by the system, last week only $7 million went out. “This week we’re up to $19 million,” Norton said. “We’re pushing more payments out.”

Gov. John Baldacci’s press secretary, Lynn Kippax, said the governor is concerned and is monitoring the problem. “He’s interested in a successful resolution.”

So far, few clients have suffered a lack of services, Lerman said, but agencies can’t keep operating much longer without their income.

Christopher Copeland, executive director of Tri-County Mental Health of Lewiston, said this week that the agency has not received expected Medicaid payments of at least $750,000 for the past three weeks. “We have talked to our banks to say, ‘Can you help us weather this?’ but we don’t know for how long. Agencies like ours are not rich. We don’t have reserves.”

Tri-County made payroll Wednesday and will make its next payroll, Copeland said.

Tri-County has 500 workers serving about 4,000 disabled people in Androscoggin, Franklin, Oxford and northern Cumberland counties, Copeland said.


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