Maine Republican gubernatorial candidate Paul LePage on Thursday accused Democrats, including Blaine House rival Libby Mitchell, of doing too little to pay down a nearly $400 million debt that the state owes hospitals for Medicaid services.
"Decisions made in Augusta are putting a burden on the backs of Maine hospitals," LePage said following a rally attended by several dozen people at Central Maine Medical Center in Lewiston. "They haven't made any effort to stop the bleeding."
Similar gatherings, not attended by LePage, also were scheduled at hospitals in Sanford, Augusta, Bangor and Presque Isle.
Democrats, who hold legislative majorities, acknowledge the debt of about $380 million to the hospitals, but say it started piling up before Gov. John Baldaccci took office in 2003. Democrats also say a repayment schedule has been in place since 2006 and the latest two-year state budget - approved with Republican votes - includes $132 million in hospital settlement payments.
"The hospitals have been first in line to get their money for eight years," said David Farmer, spokesman for the Democratic governor. "There's been a continuing commitment to work with the hospitals by the governor and the Legislature."
Mitchell drew indirect fire from LePage, who said the Legislature under her leadership as Senate president has let the debt grow larger by reimbursing hospitals at too low a rate and allowing overly generous eligibility standards for Medicaid, known in the state as MaineCare.
"It's getting worse to the tune of a couple of million dollars a month," LePage said.
Mitchell said LePage's comments are "just plain wrong," and noted that the state has made a total of $3.5 billion in hospital settlement payments - most of it in matching federal dollars - since 2003.
Mitchell said the debt has developed as a result of the imprecise methodology that was used in calculating prospective payments. With the hospitals' support, the state has adopted a new system of calculating the payments to close the debt gap.
"All these people running for governor are talking about (government) restructuring," said Mitchell. "This is a fundamental restructuring."
The issue did not crop up overnight. Republicans, who have been hammering away at it for months, say the Legislature relied too heavily on federal stimulus money to pay off part of the debt. With the stimulus program ending, the problem is getting worse, they say.
Republicans say the state debt is to blame for financial headaches endured by the hospitals, some of which have had to cut their budgets by tens of millions of dollars and lay off employees. Democrats counter that in at least one case, the financial injury has been self-inflicted because the hospital - Central Maine Medical - spent money it did not have.
LePage said that as governor, he would seek to pay off the $380 million debt during the two-year budget cycle starting next July. He estimates that $65 million each year in state money would draw sufficient matching funds from Washington to settle the debt.