A 15-month process to study the system Maine uses to pay medical providers for treating the state’s lowest-income residents ended this week with recommendations to regularly review and standardize rates, and prioritize pay based on quality of care. 

Rates for most services covered by MaineCare, the state’s Medicaid program, should be studied every five years with adjustments for inflation made every two or three years, according to a report commissioned by the state Department of Health and Human Services. Ambulance services, targeted case management and residences for the mentally ill were identified as the most urgent areas to address in the next five years.

This story was originally published by The Maine Monitor.

The Maine Monitor, formerly known as Pine Tree Watch, is a local journalism product published by The Maine Center for Public Interest Reporting, a nonpartisan, nonprofit civic news organization based in Augusta.

But it is unlikely that funding for the recommended rate adjustments will be included in the two-year budget legislators must finalize by July — despite recommendations that several of the most highly prioritized MaineCare services see reform in the next fiscal year. Gov. Janet Mills requested $45 million for MaineCare rate increases but was unable to review the report before submitting her proposal in January. The rate study, which was delayed because of the pandemic, was released March 16.

Michelle Probert, the director of MaineCare, said the state’s public health agency is “prioritizing” a conversation about which of the study’s recommendations to implement and when to request the needed money.

“I don’t have an answer yet,” Probert told lawmakers at a joint meeting of the Health and Human Services, and Appropriations and Financial Affairs committees on March 16.

Rep. Kathy Javner (R-Chester) said she found that disappointing. 

“We had been holding off many of our bills that have been asking for rate raises in anticipation of this rate study presentation, I think mostly in the hopes that the department would take a deeper dive and really give us a greater clarity in the direction that they were looking at as a department and what their priorities were going to be,” said Javner, a member of the Health and Human Services committee. 

“We were hoping not to be in this place and (that) the department would come to that decision and ask for specifics,” she added. “Which they haven’t.”

Health providers have long sounded an alarm that the state’s reimbursement rates are so low that they are jeopardizing access to care. The issue has forced some facilities out of business and strained the resources of the ones that continue to accept MaineCare. 

Concerns have grown as the number of people on MaineCare has swelled to roughly 345,000, with a sustained influx of enrollments throughout the pandemic.   

The study, conducted by the accounting firm Myers and Stauffer, compared the reimbursement rates for 63 MaineCare services to the federal Medicare rates, the typical private rates for a given service and the rates in five states with similar state Medicaid structures: Connecticut, North Carolina, Montana, Vermont and New Hampshire.

Probert said the report confirms that Maine’s current system is “inconsistent” and “inefficient.” Forty percent of MaineCare policies have no schedule for renewal, she said, and 30 percent of MaineCare policies are “legacy rates” for which no rate methodology is currently available. Some rates haven’t been adjusted for at least 20 years. 

In response to the report, Probert told lawmakers that the DHHS wants to make 40 percent of MaineCare payments based on the quality of care by 2022. Tying reimbursement to performance, Probert said, and considering factors like staffing and the median salary levels for the individual delivering the service, will help prevent misspending of funds.   

To meaningfully implement many of the report’s recommendations, the DHHS would need to seek funding from the Legislature in the next supplemental or biennium budget, and clear a bureaucratic hurdle from the Centers for Medicare and Medicaid Services. The federal agency must approve changes states make to reimbursement methodologies in their Medicaid programs, a process Probert said could take at least three months. 

Rep. Barbara Cardone (D-Bangor) said there are several factors the budget committee will need to understand before conversations about funding proceed. The study does not consider labor costs, workforce issues or potential changes to the minimum wage, for instance, which Probert said were beyond the scope of this study. 

“For me, sitting on the Appropriations Committee, I find this (report) is going to be minimally, if not at all, helpful in terms of the decisions that I need to make,” Cardone said. 

The report received a mixed response from providers who serve MaineCare patients.

Evelyn Kieltyka, the senior vice president of program services at Maine Family Planning in Augusta, appreciated that the report recognized that MaineCare rates for family planning services are on average below comparison rates. And it recommended that MaineCare move to a bundled clinic rate so family planning services can contract out to provide a broader array of services.

“Our one hope is that MaineCare would consider pushing up the estimated effective date,” Kieltyka said. The report doesn’t recommend MaineCare prioritize adjustments to family planning services until fiscal year 2023.

Jeff Austin, the top lobbyist for the Maine Hospital Association, questioned how the data was informing some of the recommendations. 

Myers and Stauffer, for instance, suggested the state reduce the rates it pays outpatient hospitals compared to ambulatory surgical centers when the two are providing the same service. But the report also found that outpatient hospitals are on average paid less compared to the Medicare rate, the typical private rate and the Medicaid rate paid by comparable states, and ambulatory surgical centers are on average paid more.

“Yet, they still recommend a cut (for outpatient hospitals),” said Austin. “When that happens, it’s hard to take the analysis seriously. Why do the quantitative work only to make recommendations you wanted to make anyway? We appreciate the quantitative work but don’t put much stock in the qualitative analysis.”

At least two lawmakers at the March 16 hearing wanted the report to be presented to various stakeholders for feedback. While Myers and Stauffer engaged MaineCare members and medical service providers during the course of the report, Probert said there are no plans to hold additional stakeholder meetings.

The last study of MaineCare rates, in 2016, made assumptions and recommendations that did not feel transparent, stakeholders shared in an earlier report this year. Rep. Patricia Hymanson (D-Ogunquit) said she didn’t want the state to repeat those mistakes, and Rep. Jessica Fay (D-Casco) said she “would urge” the DHHS to have post-report stakeholder meetings.

Sen. Joe Baldacci (D-Bangor), who in the past has worked with families of severely disabled children, noted how significant worker shortages — particularly in personal care services — can create poor health outcomes and economic stress for families. 

Rates for personal support services — which increased between 23 and 30 percent last spring — were among the few rates DHHS increased in recent years. But they still might not be sufficient, he said. 

“From my previous work with these families, what I saw was personal care workers could get better-paying jobs at a number of other places that were less demanding,” Baldacci said. “I think that we need to have a separate focus on how to resolve this labor shortage. Because it’s not just a numbers issue for people. This is heartbreak. And it’s emotional pain, economic pain as well for these families. At some point we may have to consider, in addition to private agencies, we may have to have state-trained people to do this kind of work and become permanent state employees in order to have a stable situation.”

One thing is clear, Javner said: “We’re not done.”