AUGUSTA, Maine — Despite accounting for about half of the governor’s proposed $6.3 billion two-year spending plan — and including provisions that immediately sparked controversy two years ago — the new budget proposal for the Maine Department of Health and Human Services has earned few remarks in Augusta.
That’s partly because Gov. Paul LePage’s budget proposal also includes a monumental shift in state tax policy. But DHHS Commissioner Mary Mayhew said it also is because, for the first time in many years, the department is not presenting the Legislature a funding crisis to solve.
“This budget is unlike any DHHS has helped to craft,” Mayhew said in a recent news conference.
For the entirety of LePage’s time in office, DHHS has begun each year with budget shortfalls in the state Medicaid program, including a $220 million hole in 2011. Filling in the gap has been priority No. 1 every budget cycle. But, thanks in part to cuts to Medicaid that saw tens of thousands of low-income Mainers removed from the program during LePage’s first term, this year’s DHHS proposal has no shortfall to fill.
Mayhew said that means the department can being prioritizing spending and programs to meet the governor’s vision of efficient social services.
The state share of the department’s budget totals about $3.2 billion for two years beginning on July 1, representing about $40 million more than the current biennium. For budgets of this scale, that’s considered relatively flat. Another $3.8 billion of federal spending for DHHS programs also is expected.
Much of the budget is routine, paying for the department’s 26 offices and 3,500 employees, as well as obligated payments to programs such as Medicaid and food assistance.
Of the billions of dollars in the budget, the debate will center almost exclusive on relatively small sums of money — the roughly $112 million worth of new initiatives and $106 million of program cuts identified to help pay for them. Lawmakers will undoubtedly debate the various proposals, but for now, they’re still wrapping their heads around just what, exactly, is in this thing.
Changes to state reimbursements and Medicaid payments, including big cuts to Medicare Savings Plan and Drugs for the Elderly, saving the state $88.4 million
The department wants to change the way it reimburses service providers, reducing state obligations to hospitals, pharmacies and doctors’ offices. Then it can use that money to pay for other programs.
The plan also includes big cuts to the Medicare Savings Plan, which helps seniors and disabled adults pay health insurance premiums, deductibles and co-insurance, and the Drugs for the Elderly program, which helps the same population pay for prescription drugs. Maine is one of only two states with broader eligibility standards than required by federal law for these two programs, which help seniors and some disabled adults pay for health care and prescriptions.
DHHS proposes tightening those standards to federal minimums, which it says will save the state about $45 million in the biennium.
That eligibility change would see about 14,500 of the about 76,600 people enrolled in a Medicare Savings Plan cut from the program, while another 19,000 would see their benefit reduced, according to department projections. Another projection states that between 70,000 and 80,000 members of the Drugs for the Elderly program would see their benefits reduced or cut by the change.
This is the second time LePage’s administration has targeted the Drugs for the Elderly program for savings. In 2013, he proposed eliminating the program entirely — a plan that drew Democratic opposition and, ultimately, failed in the Legislature.
Among other cost-saving measures, the budget also eliminates “facility fees” for services provided in hospitals ($8.6 million in savings), reduces reimbursement to critical access hospitals ($5 million), and reduces reimbursement for nonemergency visits to the emergency room ($2.6 million).
Squeezing $14.9 million of savings out of General Assistance, TANF and SNAP
These changes fall under the category of “welfare reform” for Mayhew and LePage, but they also are likely to draw heat from Democrats.
First, the program changes reimbursements for General Assistance, a temporary cash assistance program administered at the local level and funded by a mix of state and local dollars. Mayhew’s plan would provide 90 percent of the state’s share up-front but hold 10 percent until the town or city substantially reduces the amount of assistance it gives out.
The budget also prevents noncitizens — including legally present asylum seekers and refugees — from receiving General Assistance or enrolling in Temporary Assistance for Needy Families or Supplemental Nutrition Assistance Program. Fewer than 1,000 noncitizens would be cut from the programs.
$20 million in cuts to state anti-tobacco programs
Maine’s anti-smoking programs are funded by settlement money from a national lawsuit against big tobacco, and the state cigarette tax. The funds are administered by the Maine Center for Disease Control and Healthy Maine Partnerships for education, prevention and cessation services, but the budget takes $10 million per year from those programs to help fund new initiatives.
$46.4 million in new spending to eliminate waitlists for medical services
All those savings identified above are being made with a purpose. The department wants to use that money to pay for other initiatives that benefit the populations LePage sees as most deserving of state assistance: elderly and disabled citizens.
Atop that list are the about 1,600 (as of October 2014) MaineCare-qualified adults on waitlists for home and community support services. The waitlists became a hot topic last year, with LePage ordering lawmakers to pull out all the stops to find money to pay for much-needed residential and community services for seniors and mentally or physically disabled adults.
In the end, lawmakers found money to eliminate the waitlists until the end of this fiscal year, and the new budget plan continues that funding in perpetuity. The plan would pay to remove all those people from the waitlists entirely.
$13.8 million to pay for mental health services
Since 1990, Maine has been binded by a legal ruling known, in short, as the “AMHI Consent Decree.” The ruling essentially outlines the state’s obligations to provide mental health services. The DHHS budget includes $11.4 million to cover those services and an additional $2.4 million to provide funding for a bridge program that helps mentally ill residents transition from group homes to independent living.
$52.6 million to pay primary care and nursing homes
Mayhew told the Appropriations Committee on Wednesday about the department’s long-term goal of moving away from the traditional fee-for-service system of reimbursing providers for each patient visit to a system that emphasizes primary care and prevention. The idea is that with better connections between doctors and patients, health care is less expensive in the long run — and health is improved.
That’s the thinking behind the agency’s proposal to replace more than $13 million to support Health Homes, service providers around the state that integrate care for Medicaid patients with several chronic diseases, who are among the most costly patients in the program. Additionally, the budget proposes about $15 million to make up for a loss in federal funding in Medicare reimbursements for primary care providers.
The budget also includes $24.2 million for nursing homes, many of which are struggling to remain open as costs increased faster than Medicaid and Medicare payments.
Elimination of 100 vacant positions, including 40 in the Center for Disease Control
Those cuts to CDC represent 11 percent of the agency’s workforce. The other 60 positions — and again, these are rough numbers — are spread throughout DHHS. It’s unclear exactly how much money will be saved, but worth noting that since LePage took office in 2011, the workforce in DHHS has shrunk from 3,626 full-time positions to 3,456.
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