Understanding the dynamic between MaineCare and Maine’s hospitals is difficult to boil down into TV commercials and campaign rhetoric. But the assertion that the state doesn’t pay its bill creates the misleading impression that Maine doesn’t pay its hospitals. That’s wrong.

Since 2003, Maine has paid its hospitals about $3.6 billion. In fact, hospitals are the largest cost drivers in the MaineCare system, accounting for nearly twice as much spending as the next-largest category. In 2010, Maine’s hospitals were paid more than $567 million, including $36.8 million to Central Maine Medical Center.

Maine’s hospitals are paid every week. But the way they are paid is confusing and has caused problems.

Until September of this year, Maine used a complicated system of prospective payments, audits and settlements to pay hospitals for the costs they incur to provide health care to people using MaineCare.

Every week, hospitals get a payment estimated on services they’ve provided in the past. At the end of the hospitals’ fiscal year, they compare the prospective payments to their actual service utilization and a settlement amount is determined.

Some hospitals end up owing the state money, while others are entitled to additional payments. The process is cumbersome and can take as long as 18 months to finish.

Right now, Maine owes hospitals roughly $88 million in state dollars for settlements, some of which date back to 2007. That’s a lot of money, and when matched with federal dollars that help to support MaineCare, it translates into about $350 million.

While there’s no question that’s a lot of money, the rhetoric around the issue doesn’t fully demonstrate the commitment of the Baldacci administration and the Legislature to be good partners with the hospitals.

When Gov. Baldacci took office in 2003, there were outstanding hospital settlements dating back to 1993. The governor and the Legislature made a commitment to fix the problem.

While the General Fund budget for the Department of Health and Human Services has remained largely flat, the amount of money directed to hospitals has grown tremendously.

For example, in 2003 hospitals received prospective payments of $193 million. In 2009, that number grew to $452 million. And, in 2009, with help from The Recovery Act, Maine paid more than $357 million of settlements with the intent of helping to strengthen hospitals and avoid layoffs.

This old payment system of prospective payments and settlements is being replaced with a pay-as-you-go system, which should help avoid the delay in payments that have been at issue for nearly 20 years.

The financial problems that hospitals face today are also more complicated than the question of settlements. With the recession, they have seen a decline in volume of inpatient stays, and expansions into new services and new communities have also strained cash flow.

At the same time, costs for medical care are exploding. Between 2004 and 2009, MaineCare enrollment has increased by a little less than 10 percent, but hospital costs for the program have grown by 38 percent.

While there are hospitals in Maine that struggle, some of them are paid at a rate higher than 100 percent of their costs just to keep them open. These “critical access” hospitals are typically small and located in rural areas, but they are often owned, managed or affiliated with much larger — and much more financially secure — health care organizations.

The question of hospital settlements has turned into a political issue this year, with the political parties and their candidates embroiled in a heated election. But during budget negotiations, when the settlements and the prospective payments have been set, there has been broad, bipartisan agreement.

More than two-thirds of the Legislature, Democrats and Republicans, voted to support Maine’s budget, including its strong commitment to hospitals. In March, when the current budget was last addressed — and changes to the way hospitals are paid could have been made — the Senate voted 31-2 and the House voted 110-35.

Democrats, Republicans and Independents all recognize the important role hospitals play in our communities and in providing life-saving medical care. And it’s for that reason that hospitals have remained among the state’s highest priorities even as a global recession has reduced available resources.

Brenda Harvey is commissioner of the Maine Department of Health and Human Services.