AUGUSTA — The Legislature’s Appropriations and Financial Affairs Committee on Tuesday unanimously approved a bill offered by Gov. Paul LePage that would use revenue bonds to pay off Maine’s $183.5 million hospital debt.

Paying the debt for services provided under MaineCare, the state’s Medicaid system, has been a top priority for LePage. His plan uses revenue from a renegotiated contract for the state’s wholesale liquor business.

LePage vetoed an earlier measure that linked the repayment plan with an expansion of MaineCare as allowed under the federal Affordable Care Act.

The governor has said he would not issue more than $200 million in voter-approved bonds until a deal is in place to pay the hospital debt.

The state’s share, combined with federal matching funds, would see the state’s 39 hospitals paid more than $480 million, in total.

The committee also learned Tuesday that interest rates in the bond market had increased since the governor first offered his proposal: Over the 10-year term of the bond, the state would pay an additional $3 million to $4 million in debt service.

“This delay had consequences,” said Adrienne Bennett, a spokeswoman for LePage. “And not only do we now know that there is a $3 million to $4 million additional cost because of it, we know that good construction jobs have been held up, as well as jobs at hospitals.”

Bennett said the increased costs “were a direct result of the games that Democrats wanted to play.”

But Democrats on the committee said the rates in the bond market would have gone up, regardless.  

“I think we are all very pleased that we are at a point where we can vote this bill out and make sure that our hospitals are paid,” said Rep. Peggy Rotundo, D-Lewiston, the House chairwoman of the committee.

She said paying the hospitals wasn’t a partisan issue and that a law passed under former Gov. John Baldacci had set in place a system for the state to pay its MaineCare costs on time, and now all outstanding debt would also be paid.

“All of us have, from the very beginning, wanted to pay the hospitals,” Rotundo said. “This final payment is something all of us wanted to do.”

The debt has to be paid before Oct. 1 to take advantage of a higher federal reimbursement rate that will decrease on that date. Failure to make the payment would cost the state an additional $5 million. That means lawmakers have until the end of June to get the bill passed and signed into law.

Rep. Dennis Keschl, R-Belgrade, a member of the Appropriations Committee, said the prior bill that linked the debt payment to a Medicaid expansion would not have gone into effect until after Oct. 1.

Keschl said lawmakers now have time, if they act quickly, to avoid that additional cost.

The bill, sponsored by Sen. Patrick Flood, R-Winthrop, next will go to the state Senate.

sthistle@sunjournal.com

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