AUGUSTA — Proposed cuts to the Department of Health and Human Services by the Baldacci administration were met with strong resistance from health care providers and advocacy groups during a public hearing on Monday at the State House.

Lawmakers on the Appropriations Committee heard arguments against Baldacci plans to reduce MaineCare reimbursement rates and place limits on hospital visits and access to X-ray and laboratory services, which are part of an overall supplemental budget aimed at eliminating a projected shortfall of more than $400 million. Proposed cuts to DHHS total about $68 million over the current budget cycle.

“Let me be very clear — we adamantly oppose service limits,” said Mary Mayhew, vice president of the Maine Hospital Association. “We understand the difficult situation that the department is in, but we have concerns that there is no practical way to implement these limits.”

Mayhew said individual hospitals won’t know whether someone has already reached their maximum at another facility and therefore they simply will not receive payment for those services.

“And again, they are going to be committed to provide those services and this will become increased charity care costs for the hospital,” she said. “Hospitals are (already) under salary freezes, hiring freezes and they are going to be eliminating programs locally. And certainly they don’t eliminate programs just for MaineCare patients, but they will be eliminating programs for all who depend on them.”

State Rep. Sawin Millett, R-Waterford, who is the ranking Republican on the Appropriations Committee, agreed with Mayhew about the potential problems with a policy that limits how many visits by MaineCare enrollees the state will pay for.

“It appears there are both managerial problems in verifying where a patient stands in relation to that annual limit as well as who bears the final burden problems in the event services are provided and won’t be reimbursed,” he said.

Others who testified on behalf of people enrolled in MaineCare programs said state officials chose to limit visits by picking an arbitrary number.

Not so, said DHHS Commissioner Brenda Harvey.

“We looked at what other states are doing in terms of hospital limits,” she said. “We picked things that were reasonable to us.”

By limiting out-patient visits to no more than 15 per year, Harvey said the department would save about $1.5 million in 2011. By limiting reimbursement to hospitals for five in-patient visits per year, and laboratory and X-ray services to 15 per year, the state would save about $800,000 in 2011, Harvey said.

Mayhew also expressed concerns about suggested cuts to reimbursement rates at what are known as critical-access hospitals.

“It is a huge reduction from their 2009 payments; if you think about it, we’re now taking them from 117 percent down to 101 percent (reimbursement),” she said. “That enhanced reimbursement was done based on tax and match as a means of addressing a cash-flow problems for these 15 smallest hospitals in the state.”

Millett said the cuts are not ideal, but lawmakers will have difficulty coming up with alternatives.

“What we’ll have to do after we finish the hearings this week is to sort through any ideas that have surfaced, look to the policy committee to frame some alternatives to minimize the burden wherever possible, and then be prepared for some really hard negotiating when it gets down to the final decisions because finding alternative cuts of that magnitude, $67 million, is going to be practically impossible,” he said.

But looking for alternatives is just what State Rep. Peggy Rotundo, D-Lewiston, is working on.

“Representing a community that has two hospitals and numerous nursing homes, I’m very concerned about the proposed cuts and we’re working hard to find alternatives to these cuts, but I’m hearing from providers who are sharing with me what the implications would be and they are very serious,” she said.

Rotundo said her goal would be to minimize the cuts that have been proposed.

“You can cut funding but the need remains and often it gets shifted to be paid for through a mechanism that’s less efficient in providing the service,” she said. “You create a situation for example, where you might create greater homelessness or a need for greater local property taxes to pay for what the state’s no longer covering. The need doesn’t go away, it just gets shifted for others to deal with.”

Public hearings addressing further cuts to DHHS are scheduled for Tuesday and Wednesday.

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