The state of Maine has not gone into the nursing home business. Nor is it about to. Nor is it on the hook for upward of $100 million should the recent financial failure of two nursing homes mushroom. That such concerns exist to the extent that two legislative committees will meet next week to discuss them, though, suggests a serious lapse in communication between lawmakers and the governor’s office.
A small, five-bed home in Gardiner fell into arrears on a small loan early this year, followed by Woodford Park in Portland, a much larger facility with a much larger debt — $7.5 million. Both have been taken over, not by the state but by the Maine Health and Higher Educational Facilities Authority.
MHHEFA is a little-known quasi-governmental agency with a big impact. It sells bonds and thus makes capital available at the very best AAA interest rates. This modest bond bank is especially valuable to rural Maine, which could not afford to have health care facilities otherwise. It is self-supporting, it receives no money from taxpayers, it (except for a relatively minor “moral obligation” by the state to replenish a smallish reserve account) assumes all the risk.
MHHEFA advised the state of potential problems in the nursing home industry more than two years ago; the budget it submitted to the state this year reflected its takeover of the two facilities and described its plan to get those facilities — now under contracted management — back on their feet and sold on the open market. So why the consternation, given this flow of important information about a problem and the progress made toward a solution? Because, by law, MMHEFA reports to the governor and, in this case at least, the information apparently went no further.
It certainly didn’t get to the two pertinent legislative committees, Appropriations and Health and Human Services. Instead of coming from the governor’s office while the Legislature was in session, it just leaked out in new reports. That’s why those two key committees are having special meetings Aug. 19.
And it certainly didn’t help that Gov. King, when asked why legislators weren’t told by him, said they should have known because it was in “the budget.” But “the budget” in this case is the MHHEFA budget that goes directly to the governor, not the state of Maine budget legislators know by heart. Doubtless it was unintentional, but the suggestion that lawmakers haven’t been minding the people’s business was unfortunate.
Appropriations Chairman Rep. George Kerr sure thinks so. “This problem has been going on for at least two years — the Legislature should have been kept informed all the way. If nursing homes are in trouble, and there are probably six or seven more, the Legislature will have to deal with it eventually. Whether it’s the Medicaid formula or something else, the Legislature has to address it and we can’t if we don’t have the information. MMHEFA reports to the governor, he needs to report to us. It’s irritating to not be informed.”
Gov. King has a point that in each of these two instances a problem arose and was dealt with, case closed. Dealing with problems is what governors do. But the same problem of empty beds and high operating costs is popping up in other nursing homes as the result of the Med ’94 rules that strove to reduce Maine’s crushing Medicaid burden while it promoted home health care.
Maine has 133 nursing homes, vitally important to their residents and their communities. Most have been fairly successful in converting some nursing beds to other uses and in replacing the lost revenue with income from other services. Some have not. If the problem isn’t isolated but systemic, legislators will have to deal with adjustments to Med ’94 and it will go a lot more smoothly if they’re fully informed.
Some reassuring news. Robert Lanne, director of MHHEFA, says the state has never even been close to having to fulfill its “moral obligation” and probably never will. Human Services Commissioner Kevin Concannon says any adjustment that may be made to Med `94 will not bear even the most remote resemblence to a bailout of nursing home entrepreneurs who failed to adapt to changing times.
Meanwhile, back at the State House, it doesn’t appear that any great harm has been done, other than a little needless irritation. Lawmakers can hardly have failed to notice during the last four years that there are some cracks in Med ’94 that need to be filled, and it never hurts to ask the guy in charge how things are going.
The guy in charge, as an independent without party faithful to confide in, has a special obligation to keep lawmakers up to date, even on problems already solved. The problems in Maine’s nursing home industry may well be relatively small and isolated. There’s a better chance they’ll stay that way if the governor and lawmakers talk to each other.
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