PORTLAND — The Roman Catholic Diocese of Portland acknowledged Thursday that the assisted-living unit at St. Joseph’s Rehabilitation & Residence will be renovated to attract more private-pay residents and help offset the cost of residents covered by MaineCare.

The diocese finally responded to mounting criticism of the way 34 residents of the unit — 28 of them MaineCare residents — are being discharged to make way for a $750,000-to-$1 million renovation without the promise of being able to return.

David Twomey, chief financial officer for the diocese and Bishop Richard Malone’s delegate on St. Joseph’s board of directors, said it’s unclear whether St. Joseph’s will accept MaineCare residents when the renovated unit reopens in 2014.

Twomey said the 40-year-old unit is unattractive to many people because it has an outdated layout of 24 mostly two-bed rooms, and two rooms share each bathroom. The renovated unit will feature private rooms with private bathrooms.

“Will there be more private-pay residents? I would say yes,” Twomey said when pressed for an answer. “If we’re going to need a higher percentage of private pay (residents to cover the cost of renovating and operating the upgrade unit), that’s something we’ll have to consider.”

St. Joseph’s is a private corporation sponsored by the diocese and operated by a board of directors that’s appointed by the bishop. It’s managed by Catholic Health East and Trinity Health, a national nonprofit organization that formed when the two groups merged in May.

Twomey said the church remains dedicated to helping people in need, but if St. Joseph’s isn’t run “soundly” and doesn’t get the “proper balance” of MaineCare residents and private-pay residents, “we’re not going to be able to help any portion of the poor.”

Twomey noted that four staff members have been assigned to help the 34 residents find another safe and appropriate place to live, as required by law. He also said that St. Joseph’s will continue to have MaineCare residents in its skilled-nursing unit, which isn’t being renovated.

As of Aug. 1, 76 of 106 residents — 71 percent — in the skilled-nursing unit are covered by the state’s form of Medicaid, according to the Office of MaineCare Services at the Maine Department of Health and Human Services.

Eighty-two percent of St. Joseph’s assisted-living residents are MaineCare recipients — just above the statewide average of 80 percent, according to the Maine Health Care Association, which represents about 200 long-term care facilities.

St. Joseph’s current monthly MaineCare reimbursement rate is $2,580 per person, according to association spokesman Rick Erb. Residents also contribute most of their Social Security benefits, which range from $500 to $1,000 per month.

Meanwhile, St. Joseph’s and other assisted-living facilities charge private-pay residents $6,500 or more per month, depending on services and amenities. Some facilities shift the unfunded cost of MaineCare residents to private-pay residents, so they wind up spending down their personal assets and wind up on MaineCare more quickly, Erb said.

Despite this cost-shifting, Maine lawmakers have increased MaineCare reimbursement rates for assisted living only once in the last eight years — a 1 percent increase for fiscal 2012, Erb said.

The MaineCare funding gap also has forced many facilities to put off much needed renovations for years, Erb said. Forty-one percent of MaineCare-dependent assisted-living facilities need to be renovated or replaced, according to the Muskie School of Public Service.

As a result, there’s a 92 percent occupancy rate for the 4,232 beds in assisted-living facilities that accept MaineCare.

Given such high demand for assisted living, many of the 34 residents being discharged from St. Joseph’s face a significant challenge in finding another place to live by the targeted Oct. 1 deadline.

Paul Gagne, of Portland, is one of several family members who contacted the Portland Press Herald to express disappointment and anger about the way St. Joseph’s is handling the discharge process since it was announced Aug. 19 and 20.

Both of Gagne’s parents are MaineCare recipients who have lived at St. Joseph’s for about two years.

Gagne and other family members say they’ve been treated with disrespect and received conflicting information about the timeline for the closure, the reason for the renovations and the likelihood that residents will have to apply for readmission.

Gagne noted the diocese’ lack of involvement in what he describes as the “shock and awe campaign” that residents and family members have experienced. He was further upset when the diocese failed to respond to the Press Herald’s repeated requests for comment on stories published earlier this week.

“The diocese’ absence of solicited comment is extremely disappointing,” Gagne said. “It’s sad that they seem to have distanced themselves from this business decision and from their very own flock. They should be right in there, rolling up their sleeves and dealing with this head-on.”

Twomey said the 10-member board of directors has been talking about renovating St. Joseph’s for decades and tried to take steps to minimize residents’ anxiety. He said it was impossible to renovate the unit in phases because walls will be moved and bathrooms will be torn up with jackhammers.

Twomey described the discharge process as upsetting under the best circumstances and acknowledged that the board failed to anticipate the full range of reactions and concerns of residents, family members and the public.

“These are people. It’s not an easy decision,” Twomey said. “The church is not cold and callous. Quite frankly, it was reassuring to me that the board had such concern for the residents in this process. Is it a perfect process? Probably not.”