Attention Providers: Potential Capping of MaineCare Payment Cycles

In January, Governor Mills submitted to the Legislature a Fiscal Year 2025 supplemental budget request for $118 million in General Funds to align projected expenditures with available funding in the MaineCare program. The funding is available through new revenues recently recognized by the State of Maine’s nonpartisan Revenue Forecasting Committee. The Governor’s request must simply be approved by the Legislature in order for the funding to be appropriated to MaineCare. Additionally, this $118 million in General Funds is expected to leverage an additional $296 million in Federal matching funds for a total of $414 million in all funds.

While the supplemental budget initially passed out of the Appropriations and Financial Affairs Committee unanimously, objections among some members of the Legislature are raising concern that the supplemental budget may not garner the two-thirds bipartisan support needed to be enacted on an emergency basis and take effect immediately. The Department has informed the Legislature that without bipartisan, two-thirds support of the supplemental budget, this $414 million will not be immediately available and the MaineCare program would need to temporarily withhold payments to providers.  

Given the recently raised objections casting doubt on an emergency enactment, the Department is notifying providers now about the potential need to withhold payments. Unless the trajectory of legislative action changes, the Department will need to temporarily withhold certain payments from providers starting in March in order to ensure that at least a percentage of claims are paid until the Department receives sufficient funding. The exact date that payments will need to be withheld will be determined in the coming weeks.

The MaineCare shortfall is driven by the increase in MaineCare enrollment associated with required continuous coverage during the COVID-19 pandemic and eligibility expansions, increasing patient need, return to pre-pandemic utilization, and increased reimbursement to reflect high inflation and long overdue investment to ensure adequate reimbursement for many services.

The Department has developed a plan to withhold payments (also known as “capping weekly cycles”) that aims to minimize negative impact on providers, with an emphasis on protecting providers who are most dependent on MaineCare revenue. The Department has taken into consideration provider reliance on MaineCare funding compared to other payer sources, frequency of billing, ability to shift resources, and strength of the provider network.

Specifically, the Department plans to take the following action:

  • Pay hospital prospective interim payments (PIPs) at 70 percent the normal level;
  • Hold payment for all hospital claims greater than $50,000;
  • Hold payment for large retail pharmacies and large durable medical equipment suppliers; and;
  • Hold payment for out-of-state providers of hospital, ambulance, pharmacy, and durable medical equipment services.

For most other provider and claim types, every week the Department will set a cap on payments and will pay “first in first out” based on date and time of submission, up to the weekly cap. Based on the complexity of this work, and the volatility and uncertainty of the situation, the current capping plans, including which providers are impacted, are subject to change.   

The Governor and the Department are continuing to strongly urge all members of the Legislature to support the supplemental budget request so that the capping of payments is not needed.

We will share additional information as we have it.