March 8, 2012

Maine facing Medicaid debt

By John Richardson
Staff Writer

AUGUSTA -- Maine will likely have to repay the federal government for providing Medicaid coverage to as many as 19,000 ineligible patients during the past year and a half, Health and Human Services Commissioner Mary Mayhew said Wednesday.

"There will be an audit," Mayhew told lawmakers shortly after talking with federal officials Wednesday. And, to the extent claims were paid improperly, she said, "there will be a requirement to pay those funds back."

No one knows how much money was improperly paid out, or how much the state may owe the federal government. Mayhew said it will take four weeks to figure out the extent of the problem.

Lawmakers who have been working for months to balance the DHHS budget first learned of the mistake Tuesday and said Wednesday it leaves them with even less confidence in the department's budget numbers. The news also led to accusations that the administration kept the information from lawmakers who were forced last month to make painful cuts to MaineCare that might not have been necessary.

"We have questions about why that information was withheld from us," said Rep. Peggy Rotundo, D-Lewiston, a member of the Appropriations Committee. "And is this the tip of the iceberg? It seems to be in turmoil over there."

Medicaid, called MaineCare in the state, is a state-administered program that provides medical coverage to the poor and disabled. About two-thirds of the cost of medical claims is paid by the federal government, however.

Mayhew said she spoke to federal officials Wednesday about the latest problem with MaineCare's troubled computerized eligibility and claims systems. She said she expects to meet with from the Boston regional office of the federal department.

Mayhew also briefed lawmakers Wednesday, saying she only learned about the significance of the problem last week.

Mayhew said a computerized claims system launched in the summer of 2010 never communicated properly with the state's eligibility system. Between September 2010 and January, an estimated 19,000 MaineCare enrollees were sent letters telling them they were no longer eligible for coverage. But their coverage was never cut off, so any medical claims they submitted would still have been paid by the state.

"They may not have read the letter or understood the letter, and their (MaineCare) cards remained active," she said.

Mayhew said the department is still trying to determine how many of those 19,000 got Medicaid-covered services they were not eligible for. She has told lawmakers the overpayment may total about $7 million, but lawmakers said they believe that number is low.

The removal of 19,000 people who were incorrectly considered eligible may reduce future MaineCare costs and reduce the need for additional cuts in fiscal year 2013. At the same time, however, the state could be forced to repay an even larger amount to the federal government.

Sen. Margaret Craven, D-Lewiston, asked Mayhew why she didn't tell the Appropriations Committee weeks ago during an extensive series of budget-balancing sessions.

"I'm asking why they weren't told that something could be very wrong?" Craven said.

Democrats pointed out that Gov. Paul LePage repeatedly grew frustrated that lawmakers were asking too many questions about the shortfall.

Mayhew said the error was one of many problems identified when the new claims system went online in 2010, but that she first learned about in late January. She asked for an internal review and was told the significance of the problem last week, when she informed the governor. DHHS officials and other experts from within the administration are now studying the computer problem and the communication breakdown, Mayhew said.

"As commissioner, I am responsible for where we are right now," she said.

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