Governor Presents Biennial Budget; MaineCare Fee Increase and Cigarette Tax Hike
Items of particular interest in the proposed two-year state budget include a physician fee increase for MaineCare and a bold $1.00 per pack hike in the state's cigarette tax. The $3 state appropriation for the fee increase, coupled with the existing federal match, would result in an approximately $8.2 million increase overall. This should move physician Medicaid fees to over 60% of Medicare. The cigarette tax, if enacted, would make Maine's tax the highest in the nation.
Governor Baldacci presented the proposed budget on Friday at a press conference attended by MMA representatives. Twice during his remarks, the Governor alluded to the need to better compensate Maine's physicians providing services to MaineCare recipients.
The physician fee increase is not scheduled to begin until July 1, 2008, the second year of the biennium.
As noted in an article below, the budget also eliminates 100 positions in the Office of MaineCare Services (OMS) beginning in the second year of the biennium. This decrease in positions is presumably a result of a likely decision by the state to outsource the payment and management of MaineCare claims, rather than to continue to finance the MECMS system without the participation of the federal government.
Hearings on the budget will take place before the Joint Standing Committee on Appropriations and Financial Affairs before the end of January.
In his budget address, Governor Baldacci said the following about health care services:
If we are to realize sustainable prosperity, we have to be successful at appropriately managing the costs of the MaineCare program. This does not mean sacrificing our compassion for the most vulnerable and needy among us; this document does not reflect any reductions in eligibility or in scope of services.
This budget will expand medical management to all adults receiving MaineCare with the exception of those dually eligible for MaineCare and Medicare, behavioral health care and pharmacy services, helping ensure the provision of the right care and the right time in the right place. It also envisions the implementation of managed care for behavioral health services and standardization of rates paid for those services to make them more consistent with those paid across New England.
At the same time, we will move to improve the efficiency of administration with the Department of Health and Human Services, eliminating a Deputy Commissioner and a Director of Special Projects, and reducing the number of Offices by three. We will further reduce administrative costs by transitioning MaineCare operations to a fiscal agent, while increasing investment in program integrity and child support enforcement.
The budget proposal calls for a $1 increase in the cigarette tax and increases our support for tobacco cessation funding by $6 million over the course of the biennium. Finally, this budget provides funding for outstanding hospital settlements, consistent with my commitment to Maine's hospitals and communities.
You can read the Governor's full budget statement and other budget documents on the web at: http://www.maine.gov/tools/whatsnew/index.php?topic=Portal+News&id=28203&v=article-2006.
While the MMA staff continues to review the budget documents, the following items are noteworthy:
- The budget proposes to save $1.3 M in the first year and $1.4 M in the second year ($2.7 M total) as a result of an increase in the federal financial participation rate in the MaineCare program;
- The budget proposes to save $20.3 M in the first year and $27.4 M in the second year ($47.7 M total) as a result of clinical management of MaineCare members;
- The budget proposes to save $8.6 M in the first year and $11.2 M in the second year ($19.8 M total) by implementing a managed care effort for behavioral health services;
- The budget proposes to save $2 M in each year of the biennium in General Fund costs plus $17 M in each year in federal funds (approximately $20 M total) by adjusting mental health service payment rates to a standard rate per service.