Maine pays off $500M debt owed to hospitals

Gov. Paul LePage said on Wednesday that the state has paid its hospitals nearly $500 million for unpaid Medicaid services, ending a long-standing debt the Republican governor says has been financially crippling for the state's hospitals and Maine's economy.

LePage ceremoniously handed checks to hospitals officials at the Inland Hospital in Waterville and Central Maine Medical Center in Lewiston, marking a significant occasion for LePage, who made paying back the hospitals one of his top legislative priorities.

But the final payments to the state's 39 hospitals has also refueled a debate over whether Maine should expand Medicaid under the federal healthcare overhaul, a proposal Democrats have promised to reintroduce when lawmakers return in January.

LePage said it was vital to pay the hospitals, which are collectively the state's largest employer.

The "failure to pay the hospital debt has hindered Maine's financial status and harmed the economy as a whole," LePage said in a statement. "With this payment made, now we must continue to move Maine forward to further strengthen the economy by making thoughtful, common-sense reforms."

Hospital officials have said that not being paid by the state forced them to delay buying new equipment, restrict travel and hiring and freeze salaries. But they also say the payments won't solve the other financial problems they're facing, like higher taxes and lower reimbursements for medical services.

The state recently sold a $220 million liquor revenue bond, allowing it to pay $183.5 million to the hospitals. That payment triggered a federal match of nearly $307 million, for a total payment of more than $490 million.

But Democrats said Wednesday that paying back the hospitals "leaves the job only half done."

They say expanding Medicaid under the Patient Protection and Affordable Care Act to cover about 70,000 more Mainers, a measure that LePage vetoed in June, is an important part in ensuring the long-term financial strength of the hospitals and health of Maine residents.

"It is certainly a good day now that we have made the final payment to the hospitals and clear this debt from our books," Senate President Justin Alfond of Portland said in a statement. "But this conversation is far from being over. ... We need to ensure that Maine families have a relationship with their family doctor, not just the emergency room."

But LePage says that expanding Medicaid in Maine in the early 2000s is what caused the mounting debt for the hospitals in the first place as the state grew increasingly unable to keep up with the payments. Expanding the program now, when the state has just finally paid off that debt, would be reckless, he said.

"I think it's interesting that here we are talking about Medicaid expansion, when quite frankly, Medicaid expansion ... is really what caused us to be in a decade of deficit that we are now just finally paying off," House Republican Leader Ken Fredette of Newport said on Tuesday. "I find that ironic."



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