Major Changes to Federal Medicaid Rules Hit Maine State, Local and School Budgets and Providers

January 30, 2008 -- AUGUSTA – The federal Centers for Medicaid and Medicare Services plans to adopt five rule changes that eliminate federal dollars that have supported healthcare services for the elderly, persons with developmental disabilities, school-aged children and persons with mental illness.

These are programs that were approved and supported by federal Medicaid funds in the past. Some of the programs, such as services to special education students from birth to age 20, are services that another federal law requires to be provided. The changes affect all states and give states little time to react.

A moratorium on the in-depth rule that narrows the scope of services matched by federal funds was supposed to be enacted when President George W. Bush signed SCHIP legislation. The moratorium would have lasted 18 months, into the next biennium. Since the bill was vetoed, implementation has moved forward a full year, leaving all states little time to adjust. President Bush made his third and final veto on Dec. 29.

The two state agencies hit hardest in Maine, the Department of Health and Human Services and the Department of Education, are taking a two-pronged approach to the rules changes. They are simultaneously working with Governor Baldacci, the Congressional delegation and other states to oppose the federal changes, and working with providers and school systems to seek ideas for restructuring programs to keep delivering what are essential services to those who receive them.

Health and Human Services Commissioner Brenda M. Harvey and Education Commissioner Susan A. Gendron outlined the impacts of the recently announced changes in a briefing to reporters on Wednesday in the Cross State Office Building in Augusta and will brief school systems and providers on Thursday.

The total fiscal impact to the state general fund for fiscal years 2008 and 2009 is $45 million. The total fiscal impact to communities, including to non-profit providers and schools is $141 million.

“Case management services for many individuals, including children in our child protective system, adults receiving protective services, probation and parole, public guardianship and special education will no longer be eligible for federal repayment,” Harvey said. “In the area of Rehabilitation Services, many services that were covered will no longer receive federal Medicaid funds. In many cases, these changes will affect people with the highest needs.”

“Federal law rightly requires schools to provide rehabilitation services, such as occupational therapy, physical therapy and speech therapy, that are necessary for students with special needs to be able to access an appropriate education,” Gendron said. “In fact, federal law even requires us to maximize all revenue sources, including the federal government, to make those services available. Now we are being told that Medicaid will no longer fund some of those services that are required.”

Harvey and Gendron will present detailed information to providers, including school districts, via the state’s distance learning videoconferencing network on Thursday afternoon. Staff from DHHS or DOE will be present at many of the sites to take feedback and suggestions on ways to restructure services to respond to the federal cuts in a way that maintains the maximum possible delivery of services to those who need them. Providers and school systems interested in viewing the videoconference can get information about locations online at: ww.maine.gov/education/medicaid.html.

The Department will also post additional information about the changes, including a fact sheet and PowerPoint presentation.

Source: Maine Department of Education

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