Economy forces budget cuts in Maine

Economy forces budget cuts in Maine
(February 2009 Issue)

By Phyllis Hanlon

The ripples from the nation's downward spiraling economy are spreading north, prompting significant cost cutting measures in Maine.

According to Brenda M. Harvey, M.S.Ed, Department of Health and Human Services (DHHS) commissioner, over the next two years, Maine faces an $800 million budget reduction. She says that Gov. John E. Baldacci implemented a curtailment in December, which slashed $30 million from the DHHS budget. Approximately $5 million of the reduction will impact services and five staff positions will be eliminated. But the news is not all bad.

"We are lucky in our curtailment that we managed $25 million in savings without impacting service delivery," Harvey says. These savings are the result of changes to federal regulations that affect reimbursement, increased SSI (Supplemental Security Income) payments to consumers and a $6.6 million general fund FY09 appropriation because of a moratorium on case manager services.

Some of the programs that will be affected by the governor's cuts include home-based and elder services and preventative mediation for children. "The governor proposed more work from inside each agency," Harvey says. For example, the state reduced the number of contracts for home study. "And parents will now pay for fingerprinting," she says, a service previously covered by the state as a preventative measure. While psychological services have been spared for the most part, there has been a 10 percent reduction in some of the existing contracts, but not all, Harvey adds.

While Maine had already made some modifications, Harvey cites the proposed changes as heading in a "good direction." She says, "We've been at this transition for four or five years now. There has been a dramatic reduction in costs and an increase in outcomes by having home-based services for kids. More parents are participating. Previously, our services were seen as child care and parents were not involved."

As for behavioral health services, Harvey points out a need to review this area "from a best practice soundness that drives what the dollars are buying." Elder services also have a "dollar for dollar impact," but the growing aging population begs government attention. "We are trying to understand what the unintended consequences will be," Harvey says. "The governor is considering in his biennial budget the resources to continue to help the elderly go to nursing homes."

Those with disabilities will see a longer wait list as the demand for services increases, Harvey points out. "We have finite resources. Services are inflated due to the cost of provider services," she says. Maine must reassess its reimbursement policies and try to bring them in line with the other New England states. She anticipates an emphasis on integrated health care. "We are paying for dueling systems of care. Those with serious disabilities have a medical care component lacking. We need to connect those folks and integrate total care," Harvey says.

Provider reimbursement rates pose another challenge for the state. "Maine has an expensive network of providers. For the size of the state, we have more than 4,000 individual organizations in the Medicaid program," Harvey says. "That tells you the size of the social services industry." She adds that Maine has a long history of reimbursement variability within its provider network. "We are trying to standardize rates. In the end it will right things in the provider community, but it'll be a long process."

"We have a really good team that is concerned about the people we serve. I feel that given the challenge we're facing, these times will force us to look at our priorities and the neediest and stay focused," Harvey says. "Providers are committed to the same things we are. It's not all negative. I really do believe the people of Maine understand that this is a different world."