AUGUSTA —  The Legislature’s Health and Human Services Committee voted largely along party lines Wednesday to recommend that an expansion of the state’s Medicaid program be tied to Gov. Paul LePage’s top legislative priority: the payback of Maine’s $484 million debt to its hospitals.

The move came as a surprise to Republican committee members and legislative leaders, and it drew a sharp rebuke from LePage. House Republican Leader Kenneth Fredette of Newport said the surprise move “poisons the well” for conducting other legislative business.

“There are implications for this beyond this one issue because of the way it’s been handled,” Fredette said. “The issue is whether we do this in a fair, open process. I don’t think it’s been fair, nor has it been open.”

The vote marked the first procedural move by Democrats in the Maine Legislature to include an expansion of Maine’s Medicaid program in a bill that provides for the state’s 39 hospitals to be repaid and for the state to fund the repayment through a renegotiated wholesale liquor contract.

Ultimately, the Legislature’s Veterans and Legal Affairs Committee will decide whether a bill that incorporates all three measures will make it to the full Legislature.

The Senate chairman of that committee, Sen. John Tuttle, D-Sanford, bucked his party’s leadership last week in saying he didn’t support linking Medicaid expansion and a payback of the hospitals. Tuttle partially backed away from that position Wednesday, saying more than 100 constituents had contacted him in the past week to urge him to back an expansion of Medicaid.

He said he hopes to gauge the opinions of his fellow committee members in the next day before deciding how to move ahead.

“I just want to allow some time for calmer heads to prevail and to allow the process to go forward,” he said. “I’m not sure what’s going to happen, but we’re going to take it one day at a time.”

The Health and Human Services Committee voted 10-4 in favor of incorporating the Medicaid expansion into the hospital debt payback bill. The committee’s Democrats and one Republican, Rep. Carol McElwee, R-Caribou, supported the move while the remaining Republicans on the committee opposed it. McElwee said in a statement later that her vote was in support of expanding Medicaid, not in support of linking the issue with the hospital debt payback.

As a result of the vote, the Health and Human Services panel will send a letter to the Legislature’s Veterans and Legal Affairs Committee with its recommendation.

House Speaker Mark Eves, D-North Berwick, said the vote to link Medicaid expansion and the hospital debt payback shouldn’t have come as a surprise. Democrats first discussed linking the two issues in March.

“They have known that this has been our intention all along, and what they’re seeing now is a follow-through in how sincere we are in making sure that we pay our hospitals and provide health coverage to nearly 70,000 Mainers,” Eves said. “The fact that [Republicans] are turning their hands up at this moment is just another example of the fact that they don’t want to get this done.”

While they started discussing the connection between the two issues in March, Democratic leaders started advocating late last month to include an expansion of Medicaid under the federal Affordable Care Act in the hospital debt payback bill. LePage has opposed linking the two issues.

“Mainers have made it very clear that they want the hospitals paid without it being tied to welfare expansion,” LePage said Wednesday in a prepared statement. “I am astounded by this last-minute political maneuvering to make an end run around the Maine people.”

Rep. Linda Sanborn, D-Gorham, who sponsored the original legislation to expand Medicaid, said tying the expansion to a repayment of the hospital debt likely represented the best chance for the expansion to pass.

“I’m not confident that there was any other good road to take,” she said. “The issues do tie together well. I really think it was our only chance to make it happen, honestly.”

Rep. Deborah Sanderson, R-Chelsea, who sits on the Health and Human Services Committee, said the state needs to pay back the hospitals as quickly as possible. Policymakers, meanwhile, have to take more time to analyze the financial impact of expanding Medicaid, she said.

“The governor has been very clear that he does not want these two tied together. If they’re tied together, I don’t think it’s a stretch to assume that it might get a veto even if it includes payment for the hospitals,” she said. “What [Democrats are] doing is they’re trying to hold payment for past debt due to Medicaid expansion hostage with more Medicaid expansion.”

Lawmakers have advocated for paying back the hospital debt before Oct. 1, when the state’s federal Medicaid funding rate drops, leaving the state with a larger portion of the debt. The Medicaid expansion would take effect on Jan. 1, 2014.

Under Maine’s Medicaid funding rate, the state would owe $181 million of the $484 million hospital debt and the federal government would kick in the rest. On Oct. 1, Maine’s responsibility would grow to $186 million, triggering a federal match of about $298 million.

The vote to incorporate Medicaid expansion into the hospital debt bill comes as consensus is emerging on other parts of the legislation.

On Tuesday, the Veterans and Legal Affairs Committee unanimously agreed to a liquor contract structure that incorporates elements from proposals made by LePage and Democratic Sen. Seth Goodall.

The Legislature’s Appropriations Committee, meanwhile, on Wednesday issued a unanimous recommendation that the state issue a revenue bond through the Maine Municipal Bond Bank to fund an immediate debt payback — an element of LePage’s initial hospital debt payback plan — rather than demanding an upfront payment from the vendor ultimately chosen to operate the state’s wholesale liquor business.

The Appropriations Committee’s recommendation letter, however, notes that the panel’s Republican members “object to the inclusion of the Medicaid expansion proposal.”

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