Having been steered by the state in the last few years to use Medicaid for reimbursement as often as possible, providers of services to the mentally ill and mentally retarded, substance abusers and the elderly are understandably concerned about the King administration policy change that slows Medicaid growth within a significant and growing area of services. Human Services Commissioner Kevin Concannon says auditors are watching the effect of these latest changes closely, but for the agencies that run on bare-bones budgets and have seen other Medicaid changes produce unanticipated consequences, further assurance that reimbursement money will be there is required. DHS would do well to provide it.

The change in funding is for the billing of administration within private nonmedical institutions (PNMI). These institutions have grown significantly in the last few years as the agencies have been encouraged by the state to establish housing and care for those who left Maine’s mental health institutions and for Maine children have been cared for out of state. The agencies responded to the state request, adding 22 facilities to the existing 88 in the last three years.

DHS had some good reasons for changing PNMI regulations, as even the providers agree. There was confusion between program administrators and auditors over how certain expenses should be categorized and a lack of clarity that made long-term planning difficult. The providers’ concern is not that changes are taking place, but that they are taking place without adequate consideration of their entire PNMI budgets.

In short, they are worried that the state will make cuts in one area without corresponding increases in others to keep the changes cost-neutral, as promised. Because of the extent to which the agencies followed state directives to become involved in these programs, this is no small worry.

And it is compounded by the second half of the state plan for PNMI, a 5 percent, $2.3 million cut in the expected increase in funding starting in the second year of the next budget biennium. Keeping health care costs under control as much as any state can is in Maine’s interest, but the last thing Maine wants to do is drive any of these agencies out of business and push clients back into the street. Maine allowed that to happen a generation ago and the results were horrific. The auditors looking at the effect of the regulation changes could also develop a much better idea of the effect of this funding change.

The Legislature’s Health and Human Services Committee should be interested in what the auditors find, and should be prepared to ensure the agencies are not left stranded by the new regulations.