AUGUSTA – Legislative Democrats criticizing Medicaid rule changes that could prove costly for Maine brandished a letter of support from the National Governors Association. The leader of the Republican minority in the state House of Representatives stood by his assertions that federal help for the needy must be targeted more carefully to safeguard the social welfare safety net.

With state government already facing a $95 million budget gap that could be made worse by the pending administrative changes in Washington, the debate in Maine to date remains politically charged along party lines.

Dozens of Democrats lined up in the Hall of Flags on Tuesday to denounce the Bush administration and warn that the cost-containing modifications slated to take effect in coming months will harm, as House Democratic leader Hannah Pingree said, “the most vulnerable.”

One area of concern for the critics of the rule changes is case management services that advocates say help people get coordinated care.

“For example,” the governors association wrote to the federal Centers for Medicare and Medicaid Services this week, “state initiatives funded by the ‘Money Follows the Person’ program are targeted to Medicaid-eligible individuals with highly complex needs who may require extensive case management services to transition to the community.

“However, the rule would reduce the number of days an individual can receive [targeted case management] services and would prohibit payment until an individual is living in the community.

“This could be particularly problematic in rural areas, which often face shortages of home- and community-based professionals and where states may have community teams working together over a long period of time to secure individualized services and coordinate care plans,” the governors association wrote.

Urging Congress to intervene is the legislative Democrats’ goal, and in one sense, says House Minority Leader Josh Tardy, it sounds noncontroversial.

“Who can be against having Congress act in the best interests of Maine?” the Newport Republican asked.

But restating the view of many in the GOP rank-and-file, Tardy added, “Medicaid expansion has gotten us on an unsustainable path. Republicans realize that it’s the safety net we need to protect.”

Baldacci administration officials said last week that pending federal changes in Medicaid rules – also affecting rehabilitation services, among others – could cost the state $45 million through the next 16 months. They also said community losses, including for nonprofit health care providers and schools, could total $141 million over the same period.

A spokeswoman for the Boston regional office of the federal Centers for Medicare and Medicaid Services, Roseanne Pawelec, said in response a “common theme” in some of the proposed rule changes was a concern over inappropriate billing by states.

But Gov. John Baldacci, in a prepared statement last week, said, “This is a shortsighted strategy that will increase costs in the long run. These programs are effective and compassionate, and lead to better overall outcomes.”

The Baldacci administration already has proposed reducing appropriations for the state Department of Health and Human Services by $61.2 million through June 2009 to keep the General Fund budget in balance, according to a legislative staff analysis.

On Tuesday, in prepared remarks aligned with the Democratic news conference statements, Christopher St. John of the liberal Maine Center for Economic Policy said, “Given the importance of these services to Maine’s communities, families and the whole state economy, we ask legislators at both the federal and state levels to resist these proposals and develop a comprehensive alternative to maintain necessary health and rehabilitation services for the most vulnerable Maine residents.”

In a GOP statement from Tardy’s office last week, Republican Rep. Sawin Millett of Waterford, who serves on the budget-writing Appropriations Committee, echoed the complaint about extending subsidized social services too far.

“Maine has been taking fiscal advantage of the Medicaid system since the 1980s, with aggressive expansions of the program in every conceivable way to extract as much federal matching money as possible. Now it’s come back to bite us. We will be much harder hit than other states by these rule changes, because other states have not pushed the envelope on eligibility standards so brashly,” Millett said.

The Democratic call for congressional intervention drew support from Maine’s two Democratic congressmen, Reps. Michael Michaud and Tom Allen.