$39.6M in Medicaid claims on hold Human service agencies pinched again as MaineCare delays payments for a week

BANGOR – For 28 mentally retarded residents of the Bangor area and the private, nonprofit agency that serves them, the interminable problems in the state’s Medicaid program are more than some abstract bureaucratic exercise. The latest concern, a recently announced one-week delay in processing and paying claims for the end of the fiscal year, has brought Bangor-based Branches LLC to its knees, according to Sandra Noble, the agency’s exasperated chief executive officer.

“We’re absolutely at the bottom. Either we turn this thing around now, or we don’t have a company anymore,” Noble said Tuesday.

The state says it will delay processing and paying about $39.6 million in Medicaid claims from this week, the final week of the current fiscal year, until next week, when it can tap into the budget for next year. For Branches, this means waiting an extra week for its payment of about $35,000.

A top state official said the delay is a common bookkeeping strategy necessitated by higher-than-expected costs and the state’s narrow financial straits. But Noble said the move is just one more blow to her agency’s ability to do its work, and puts her clients, her employees and her organization at risk.

For the past 10 years, Branches has operated 10 small group homes in the Bangor area. About 55 employees provide round-the-clock supervision and safety to the 28 residents, teaching and helping them with personal hygiene, shopping, cooking, housekeeping, and social and recreational activities.

Noble said the billing and payment debacle that began 31/2 years ago, when the state’s Medicaid program, MaineCare, switched over to an untested and deeply flawed new computer system, continues to undermine her agency’s financial stability. In combination with recently adopted changes in billing procedures, a revised rate structure and a budget-slashing final session in the Legislature, Noble said, the ongoing MaineCare crisis threatens the existence of small human service agencies.

A notice last week, informing all MaineCare providers to expect a one-week delay in receiving their last payment of the fiscal year, is the last straw, she said Tuesday.

“We can’t meet payroll,” she said matter-of-factly. Of the $35,000 her agency typically receives from MaineCare each week, about $22,000 goes to cover payroll expenses. The balance pays the mortgage on the agency’s properties, heat, utilities and other costs.

A one-time delay might be tolerable, Noble said, but this is hardly the first time MaineCare has failed to come through.

Just last week, she said, Branches got only $12,000 of the anticipated $35,000 because of a computer malfunction. About three weeks ago, due to confusion over billing software, the agency received no payment at all, she said.

All told, Noble figures the state owes the agency about $165,000 in back payments. While it’s likely that most of the money will be paid eventually, she’s not expecting her books to balance anytime soon.

Brenda Harvey, commissioner of the Department of Health and Human Services, said Tuesday that the delay tactic is needed to meet the state’s obligations and pay all processed claims fully.

Higher-than-expected claims during the past few weeks tapped $25 million more than was budgeted from MaineCare, she said. That left the state with only about $10 million for the last week, instead of the $39.6 million it usually pays out. Moving the pay date to next week “lets us pay everybody fully” instead of making partial payments, or none, to some providers, she said.

Harvey said the high number of claims probably resulted from providers wanting to file older claims before the end of the fiscal year. She said the delay strategy is not uncommon and is seen as normal by most providers.

“For smaller providers, for whom cash flow is an issue,” it may be more problematic, she acknowledged. She cautioned that agencies should take steps to budget for such delays and mishaps. “The state can’t be solely responsible for providers’ business stability,” she said.

At Branches, Noble said her agency might have a chance to develop a rainy day fund if the state would meet its obligations predictably.

She planned to call a staff meeting Wednesday to discuss the situation with her worried workers, who earn about $8.35 an hour on average. “These people are in no position to absorb a week without pay,” Noble said.

Mary Lou Dyer is executive director of the Maine Association of Community Service Providers, which represents organizations, such as Branches, that provide services to Mainers with mental retardation. She said these agencies are particularly hard-hit by the ongoing problems in MaineCare because so many of their clients – 99 percent, she said – are enrolled in the program.

Since 80 percent of the cost of providing services is payroll, she added, it’s not surprising that smaller agencies, especially, are having trouble paying their workers.

“Here we are in this horrible economic situation, and some people won’t get paid,” Dyer said. “This is rent, food, gas, child care.”

Dyer acknowledged that it’s not unusual for the state to hold back the last payment of the year until the first week of the new fiscal year. But this year, she said, agencies have already weathered so much inconsistency and confusion from the MaineCare program, most have little or no financial cushion to absorb the blow.

mhaskell@bangordailynews.net

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