OVER THE PAST 10 years, the Maine Hospital Association has been talking about the state’s MaineCare debt to our hospitals.

Last month, hospitals were paid nearly $500 million to settle that debt. On behalf of our 38 member hospitals, I want to express my appreciation.

One of Gov. Paul LePage’s first acts in office was to initiate a debt payment to hospitals in January 2011. From that day on, he has focused incredible energy on ending the hospital debt problem. He not only led the charge to pay for past debts, he stopped the accrual of new debt going forward.

When the state ran into financing difficulties last decade, it began paying hospitals only a portion of what was owed for Medicaid. That intentional underfunding began as a concern and quickly became a major problem.

In 2009, under former Gov. John Baldacci, the state began the process to replace the former estimated payment system with a pay-as-you-go system. Over the next few years, important steps were taken to get the state and hospitals ready to convert payment systems.

The big step, however, was finding the political resolve to fund the conversion. As part of the old estimated payment system, the state had been giving hospitals an IOU of about $100 million per year. The first task was for the state to pay the accumulated IOUs.


In 2011, LePage and the new Legislature passed a two-year budget that converted the inpatient payment system in 2012 and the outpatient payment system in 2013. That budget included the necessary funding to eliminate the IOUs once and for all. This was an incredible, and underreported, accomplishment.

In 2013, LePage put top priority on resolving the remaining MaineCare debt owed to hospitals. His staff worked diligently to help us craft a solution using future liquor revenues.

Fortunately, the Legislature responded positively to the governor’s call to finally resolve the debt.

Legislators who played important roles in this effort include Sens. John Tuttle, D-Sanford, and Garrett Mason, R-Lisbon Falls, and Reps. Louis Luchini, D-Ellsworth, and Mike Beaulieu, R-Auburn, the lead Democrats and Republicans on the Veterans and Legal Affairs Committee.

That committee had primary responsibility to review the governor’s legislation both to repay the hospitals and to restructure the wholesale liquor industry in Maine. They had a tremendous challenge and Maine people can be proud of the thorough, professional and fair approach that was taken to manage this issue.

Additionally, the Legislature’s Appropriations Committee reviewed elements of the governor’s bill, just as it was doing its primary job of putting together the two-year budget. Under the leadership of Sen. Dawn Hill, D-Cape Neddick, and Rep. Peggy Rotundo, D-Lewiston, the Appropriations Committee provided its feedback “on the numbers” and helped keep the process moving forward.


Special appreciation goes to Sen. Pat Flood, R-Winthrop, for his sponsorship of the legislation and his steady and committed resolve to seeing it through. The bill was derailed several times along the way, but each time Flood rose to the challenge and helped get it back on track.

The Legislature’s vote on the hospital payment bill ultimately was bipartisan and unanimous.

The support of the people of Maine for their local hospitals made the biggest difference of all.

Maine hospitals and the caregivers who work there provide health care 24 hours per day, 365 days per year.

Hospitals are there for the people of Maine. It was nice to know that when hospitals needed their support, they were there for us.

Steven Michaud is president of the Maine Hospital Association in Augusta.

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