AUGUSTA — The head of the Department of Health and Human Services says her department’s budget deficit has increased by more than $50 million in the span of two weeks.

According to DHHS Commissioner Mary Mayhew, the funding gap has jumped from $71 million to $121 million. The increase alarmed lawmakers on the Legislature’s Budget Committee, which will soon begin reviewing a supplemental spending plan to help fill a significant shortfall in the state budget.

Democrats say they’re wary of the department’s inability to tell them what’s causing the DHHS overrun and that the LePage administration may be using the gap to force big funding cuts at DHHS.

Mayhew says the gap is in MaineCare, which provides health services to low-income Mainers and is the state disbursement program for federal Medicaid.

Welfare reform has been a priority for Gov. Paul LePage and the Legislature’s Republican leadership. Both are weighing whether some DHHS programs that are funded strictly by the state can be cut.

Rep. Peggy Rotundo, D-Lewiston, who sits on the Appropriations Committee, said she wanted to make sure lawmakers find out exactly what’s driving the DHHS funding gap.

“What I want to make sure doesn’t happen is that these big numbers come out and people think that we have to just start slashing in DHHS,” she said.

Rotundo noted discrepancies between the gap Mayhew cited Monday and the one presented to lawmakers two weeks ago.

“We don’t know if these numbers are credible at this point,” she said. “We know there’s a shortfall, but we don’t know what the shortfall is or what’s driving it.”

Mayhew said the shortfall was created by a combination of factors, including a baseline budget that should have been $11.8 million more than was authorized. Mayhew also cited the state’s Medicaid claims system, adding that benefits that are paid out this year should have been paid out last year.

The state’s billing system has failed to meet federal standards since 2005. The substandard system has also resulted in a federal reimbursement rate that’s 25 percent lower than states with billing programs in compliance.

Asked if her department had a way of forecasting last year’s claims being paid out this year, Mayhew said, “That’s an important question. Certainly some of this (overrun) has been that we haven’t been able to get access to the claims system to better inform our challenges this year.”

Mayhew said increased use of MaineCare services is driving up costs.

Rotundo said that the data she’s seen doesn’t support Mayhew’s claim.

“We know that during a recession, more people do need services,” she said. “But as of our last meeting, that didn’t seem to be the factor driving this. The utilization figures were not up substantially.”

Mayhew said addressing the shortfall was critical. She denied that the administration was hyping the budget gap to push cuts at DHHS.

“We are going to run out of money and the impact will be severe,” she said, “both in terms of those who are on the program and to the rest of the population in Maine, which is also shouldering the burden of the cost of this program.”

Mayhew acknowledged that DHHS was internally reviewing programs that are funded through MaineCare but don’t receive federal subsidies. Some of those programs are offered to private, nonmedical institutions; private, state-licensed facilities for the elderly; the mentally ill; or those recovering from substance abuse.

The LePage administration has already launched a review of private, nonmedical institution offerings with stakeholder groups.

Sen. Margaret Craven, D-Lewiston, worried that the administration will strip funding for some private, nonmedical institutions.

Craven, who sits on the Legislature’s Health and Human Services Committee, also believes DHHS’ forecasting of those who will need MaineCare would be better if the administration hadn’t removed from the agency its more experienced program managers.

LePage has jettisoned 10 DHHS program managers since taking office. One of the departees was Tony Marple, director of MaineCare Services, a position that helps forecast benefit needs for budgeting purposes. 

Craven said that while it’s difficult to predict MaineCare needs during a recession, the $50 million variance Mayhew reported this week was an anomaly.

“(Mayhew) didn’t even have an explanation for those wild, wild swings,” Craven said. “I would say they are not able and don’t have the skilled staff to make the projections.”

Mayhew rejected that assessment, saying that the 3,600-person agency was well-equipped to handle 10 staffing changes.

“There’s a lot of people that have been here for many, many years that are engaged in this kind of analysis,” she said.

The clock will soon start ticking for lawmakers to tackle the budget gap. LePage is expected to present his supplemental budget early next month. The Appropriations Committee will begin reviewing it by the middle of December.

Rotundo said she was waiting for an analysis of the cost overruns at DHHS. In the meantime, she said, lawmakers should be reviewing all ways to fill the budget gap, including the $200 million in tax cuts the Legislature approved last year.

“We need to look at tax breaks that are benefiting primarily the wealthiest people in the state,” she said. “Everything should be on the table. DHHS should not be looked at in isolation.”

smistler@sunjournal.com

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