Plans for major expansion projects at several Maine hospitals, including Bangor’s two hospitals, are jeopardized by the small amount of credit left in the state’s certificate-of-need development account, say hospital officials.

The Department of Human Services’ Division of Program Analysis and Development has given preliminary approval to 10 projects with third-year costs totaling $9.4 million, but there’s only $1.1 million in credit left in the account.

Two of the projects are for Bangor’s hospitals. They include:

A second cardiac catherization laboratory, a new operating room and space for two others, and related improvements at Eastern Maine Medical Center to accommodate growing numbers of heart and surgical patients.

A computerized medical information system at St. Joseph Hospital.

An amended proposal for a new pediatric floor with expanded space for play and family support at EMMC to alleviate crowding is still under review. After having been rejected initially, state officials have indicated unofficially it will receive preliminary approval, said Dennis King, vice president of Eastern Maine Healthcare. The project, plus two others still under consideration for hospitals in Biddeford and York, would place aditional pressure on the limited certificate-of-need account.

Two other big-ticket proposals for eastern Maine hospitals were rejected by officials in the Division of Program Review and Analysis. They included renovation of the emergency room at Millinocket Regional Hospital, and inclusion of St. Joseph Hospital within a hospital network providing mobile cardiac catherization.

Hospital officials are complaining that the development account is too small, striking a theme that has been a familiar one for the past few years.

The account’s “serious underfunding delays projects and causes a lot of agony, and has the effect of pushing stuff outside the hospital which is probably not a good idea. … If it’s used as the basis of controlling costs, it probably isn’t happening,” said William Julavits of the Maine Hospital Association. Doctors’ offices are not covered by the CON law.

“It’s pretty obvious a number of worthwhile projects in the state will not be able to be funded because of the inadequate funding in the CON development account, and that’s not a good thing for Maine citizens,” said King.

The account is “a disincentive for hospitals to do smart things to improve patient care. … It has to be made more realistic. It’s too small,” said John Supranovich, vice president of development and public affairs at St. Joseph Hospital. He said the proposed management information system for St. Joseph would eventually pay for itself by saving personnel time.

The certificate-of-need account is part of the complex regulatory process intended to limit the growth of medical costs. The development account contains no money, only credit enabling hospitals to charge patients and insurance companies for major projects.

The Department of Human Services approves projects, and the Maine Health Care Finance Commission (MHCFC) sets the size of the fund. The commissioner of Human Services can ask MHCFC to increase its size, and he ultimately decides what projects are most important if there is not enough credit in the account.

Preliminary approval means that DHS staff have decided a project is needed and that it is “financially and economically feasible,” said John Dickins, head of the Division of Program Review and Analysis. DHS Commissioner H. Rollin Ives has final authority over what projects are approved, and he is expected to make final decisions later this month.

The account has contained insufficient credit twice since 1984, said Robert Clarke, executive director of MHCFC. Some projects were deferred for a few weeks in 1986. In 1988, the Legislature more than doubled the size of the account from $6.7 million to $14.5 million on a one-shot basis to accommodate hospitals.

Clarke’s commission has complained that this year DHS officials didn’t scrutinize closely enough two of the biggest projects, the heart catherization laboratory at EMMC and a bed conversion at New England Rehabilitation Hospital in Portland. In an unusual move, the commission requested a hearing on both projects to ask its own questions of officials.

“The two projects were of very great concern to the commission” because of their size and the “virtual absence of any scrutiny applied by the department. They had basically accepted all the information presented by the two hospitals and had not asked any questions whatsoever,” said Clarke.

Without taking a stand on the projects, the commission is questioning the accuracy of a number of statistics related to EMMC’s plan including estimates of operating expenses and projections of surgical need.

Originally the development account had $7.4 million in it this year, but most of that amount has been committed for small projects, and funding for projects approved in prior years.

Clarke said the commission considers nine criteria in determining the size of the account. They are the state health plan, the ability of Maine residents to pay the additional costs, federal regulations limiting payments, needs of small hospitals, historic needs, past expenditures, obsolescence of physical plants, technological developments and management improvements in the quality of care.

“This year the rate of growth of hospital spending is so high that it alone exceeds the rate of growth of personal income before you even consider new spending,” he said. Officials are projecting hospital spending at 10 to 11 percent, and personal income growth at 6.9 percent, Clarke said.

He said, “If information is presented to the commission it finds compelling it will commence a proceeding to consider an adjustment to the size of the account.”