Accuracy of DHHS Shortfall Analysis Confirmed By Independent Review

December 13, 2011

For Immediate Release: Tuesday, December 13, 2011
Contact: Adrienne Bennett (207) 287-2531

Office of Fiscal and Program Review confirms $120 million shortfall

AUGUSTA - Early in Tuesday’s presentation before the Joint Standing Committee of Appropriations and Financial Affairs, DHHS’ financial analysis received a vote of confidence from an independent source.

“I’ve been working with the Department for the past few days,’’ said Christopher Nolan, an analyst with the Office of Fiscal and Program Review. “We can see a shortfall of $120 million pretty easily.”

Department of Health and Human Services Commissioner Mary Mayhew and members of the DHHS Finance Team provided detailed analysis of the $120 million shortfall over State Fiscal Year 2012 and $221 million over the next two years to the committee. The presentation continued through late afternoon.

Last Tuesday, Governor Paul LePage presented his proposal to close the DHHS shortfall by reducing eligibility and eliminating most services not federally required to be provided in the Medicaid program. Maine’s Medicaid program has grown by $1 billion in the last decade and currently, Maine provides government healthcare for 35 percent more people than the national average.

After announcing the plan last week, some Democrats questioned DHHS’ shortfall analysis, alleging that the numbers were inaccurate, could not be verified and were manufactured to support the Administration’s desire to pare back Medicaid services.

“The analysis by the Legislature's nonpartisan staff validates the work of DHHS Finance and this Administration,’’ said Governor LePage. “This independent confirmation should put to rest any claims that this is a crisis created for ideological purposes.

“It is time to move past the rhetoric, roll up our sleeves and develop a long-term solution to Maine’s Medicaid problem,” he said.

Commissioner Mayhew agreed that time is of the essence.

“Our analysis clearly shows that in April, the Department will run out of money to pay for Medicaid benefits. Today, we are paying second-quarter bills with fourth-quarter money. We will not be able to pay for services for those truly in need if the current crisis is not addressed.”

Review of the Governor’s supplemental budget proposal will continue this week, with daily public hearings. Legislative work sessions are scheduled for next week.