FARMINGTON – Tired of getting reimbursed late and short for the inpatient care it provides to patients on MaineCare, Franklin Memorial Hospital is suing the Maine Department of Health and Human Services.

But the hospital’s president, Rick Batt, said Friday that in light of the state’s current budget problems and proposals to further cut state funding of health care, the hospital will consider putting part of its suit on “pause.”

The pair of suits filed in Maine courts in 2007 are a final attempt to rectify the situation, Batt said.

In January, a federal court sided with DHHS and dismissed one portion of the hospital’s complaint.

For care provided in 2007, the hospital will receive only 56 percent of its actual costs for treating MaineCare patients, or an average per patient reimbursement of $2,646.95 for an average actual cost of $4,796, according to one of the lawsuits.

FMH filed a petition in Franklin County Superior Court last year asking the court to order DHHS to finally complete the paperwork and settle on more than $5 million owed to the hospital for care provided from 2003 to 2006, Batt said.

Batt said Friday that the hospital was considering postponing its suit for the back payments in light of the state’s $200 million budget shortfall.

In a message e-mailed to the Sun Journal, Batt wrote:

“We will pause to reconsider the timing of our suit against DHHS in state court which would require the state to settle up with Franklin Memorial Hospital for services we provided years ago … We will reassess if we should pause our legal action in state court so that when we win, as expected, it will not further complicate the present grim situation.”

The second case, filed with federal court in Bangor, also in 2007, addresses the low level of reimbursements and a state law requiring hospitals to provide free services to people meeting income guidelines set by the department. The income guidelines have recently been increased, expanding the number of people eligible to receive free treatment, adding urgency to the hospital’s suit, Michael Poulin, an attorney for FMH, said.

The court recently ruled in favor of the state on a portion of the complaint, dismissing the portion of the suit that deals with reimbursement rates, but a decision over the free-services portion of the complaint is still pending, Poulin said. Once the court rules on that remaining portion, the hospital can try to appeal the earlier ruling, Poulin said.

In dismissing the reimbursement portion of the suit, the court deferred to the DHHS commissioner’s interpretation of the law, Poulin said. Calling participation by the hospital “voluntary,” the hospital must choose between treating MaineCare patients and accepting MaineCare’s reimbursement for that care, or opting out of MaineCare and referring patients to another participating hospital. If the patient insists on care at a nonparticipating hospital, the hospital may charge them for services, he said.

As FMH is the only hospital in a large county, patients can already travel up to an hour to reach it, Batt said. Under the court’s decision, the hospital can choose between refusing to treat MaineCare patients or taking the rate provided by DHHS.

Under the refusal scenario, the hospital would potentially send a heart attack victim or birthing mother on another 50-minute drive to the nearest hospital, Batt said.

But FMH remains committed to health care access, which is why the option of denying care to anybody is unacceptable, Batt said.

“The MaineCare program pays hospitals, at least in most cases, much below the real cost of delivering care, Batt said, “not below what we charge but below the real cost of the care. It’s an unfair system with such disparity for the same types of care between hospitals.”

As president, he said he has to figure how to make ends meet. Much of that difference is carried by businesses that provide health insurance for employees, and the premium payers of those insurance programs – the employees themselves.

Franklin Memorial’s reimbursement rate is the lowest in Maine, Batt said.

The rate was established years ago when the hospital was more efficient because it was smaller and had fewer costs to cover.

So far, discussions with two governors, including Gov. John Baldacci, as well as four DHHS commissioners have not helped, so FMH turned to the courts, Batt said.

“Everyone knows what the flaws are and are sympathetic, but it’s a painful fix,” he said. “A legal pursuit is the last resort.”

The case against Brenda M. Harvey in her capacity as commissioner of the Department of Health and Human Services is based on the hospital’s position that the state is taking its assets, said Christopher Taub, an attorney for DHHS.

The other portion of the case involves state legislation that requires hospitals to provide free treatment to those who fall within certain income guidelines. The guidelines have been increased, leaving just about anyone without insurance and not on MaineCare eligible for free care, Poulin said.