Maine delays some Medicaid payments due to budget shortfall

Maine is delaying some of its Medicaid payments until July to deal with its budget shortfall, according to state officials.

The delays won’t disrupt patient services, hospital officials said.

“It will not disrupt our services, although we have been in a tight cash position for a long time,” Lisa Harvey-McPherson, vice president of government relations for Northern Light Health, said Thursday. “Payroll will be met and key financial obligations will be met.”

When lawmakers approved the $519 million supplemental budget this month, it included funds to make up the $62 million Medicaid shortfall, Lindsay Hammes, a spokesperson for the Maine Department of Health and Human Services, said in an email Thursday. Those funds won’t begin flowing until July 1, so Maine had to cap some Medicaid payments until then, she said.

The delays will affect some Medicaid payments from May 13 through June 30, Hammes said.

Hammes said the agency worked to lessen the impact by limiting the scope of what payments are affected. To reduce the impact, Maine’s Medicaid system will withhold payments for hospital claims greater than $50,000, shield rural hospitals from some payment delays and exempt locally-owned pharmacies and ambulance services from delayed payments, according to a DHHS notice to health care providers.

John Porter, a MaineHealth spokesperson, said none of the health system’s services will be affected.

Jeff Austin, president of the Maine Hospital Association, said in a statement Thursday that “managing the cash disruption is a real pain for administrators.”

“Hospitals have to keep paying our bills. We can’t just send an email to staff or vendors and say, ‘We’re not paying X for the next two months,’” Austin said.

It’s the second year in a row that Maine has delayed some Medicaid payments to make up for budget shortfalls.

In a DHHS memo to lawmakers in February, the agency outlined several areas that are driving Medicaid cost increases, including the average age of a Medicaid enrollee rising, older enrollees using more health care services, the increasing costs of medication, and reimbursement rate increases.

Harvey-McPherson said Northern Light is “deeply disappointed” in the agency’s lack of communication. She said hospitals were surprised to hear last week about the delayed payments.

“At no time in the discussions with lawmakers, policy leaders or hospitals this year did DHHS say that their cash position was so challenged that they once again had to curtail payments,” Harvey-McPherson said.