Agencies that provide substance abuse treatment services in Maine are concerned that changes to the way they receive state funds could hinder their ability to help people in crisis.

The Department of Health and Human Services notified treatment providers this spring that it was switching from a system where providers are given a set amount of money to one in which providers are reimbursed only after specific services are provided.

Some providers fear the change will create uncertainty – and likely mean less money – for agencies that already operate on shoestring budgets.

Malory Shaughnessy, executive director of the Alliance for Addiction and Mental Health Services of Maine, also said her members were not involved in the discussion ahead of time and have been left scrambling to figure out what the change could mean. After asking members to assess the impact last month, Shaughnessy said she heard back from seven who said the collective loss would be $3.5 million.

The switch was supposed to happen Sunday, but the state agreed to push that back to Jan. 1, to give providers more time to adjust.

“The granting of this six-month extension is to allow you to make whatever changes are necessary to be fully prepared to operate under the new structure by this date,” Sheldon Wheeler, director of the Office of Substance Abuse and Mental Health Services, wrote in a letter to providers that was obtained by the Portland Press Herald.


However, just last week, providers were sent contracts for the next two-year cycle. Under the contract language, agencies still will receive a lump sum for the rest of 2018, but will have to use the new fee-for-service model for the remaining 18 months of the budget.

“Unfortunately, these new contracts for substance use treatment are not what we were told they would be,” Shaughnessy said. “We were told providers would be given a six-month extension of the current contracts, allowing time to negotiate with the department and try to figure out how to make the transition to a new model of payment work without disruption. It is not. It is a two-year contract extending the current terms for six months, but then making the agency commit to continue the services for an additional 18 months at a rate that is not sustainable. There is no negotiation or time allowed.”

Emily Spencer, a spokeswoman for the DHHS, said the department is committed to working with agencies on the transition.

“This structure prioritizes the clients we serve by ensuring that individuals in need of services are being treated equally, regardless of their ability to self-pay, participation in private insurance, participation in MaineCare, or status as uninsured,” she said.

As for concerns about potential loss of funding, Spencer said the amount of money available to agencies has not changed.

“This change also lends providers the opportunity to benefit from a system of care with demonstrated outcomes, with additional reimbursements available based on those outcomes and corresponding volume,” she said.

Shaughnessy, though, said in some cases the contracts sent to providers have cost projections from DHHS that providers don’t believe are correct.

“Many providers feel they just cannot, in all conscientiousness, sign these contracts as is – therefore putting their treatment services at risk of closure by the end of the week – this week,” she said.


Spencer said DHHS needs the contracts signed before Saturday.

“If a provider chooses not to serve these folks in need, we need to know as soon as possible so we can work to make sure the needed services are otherwise provided,” she said.

Maine, like many states, has been mired in a prolonged opioid crisis that has claimed hundreds of lives each year. In 2013, there were 176 overdose deaths in Maine. By 2015, that had jumped to 272 and, only a year later, it increased to 376. Last year, the state set a record for the fourth consecutive year with 418 deaths by overdose.

Shaughnessy said the biggest reason why treatment providers like the current system is that it allows them flexibility. For instance, getting a lump sum allows them to provide care to those without insurance and ensures they aren’t penalized if someone doesn’t show up for appointments.

A new system that only allows providers to bill for specific services creates a layer of uncertainty. Will the reimbursement rates be enough? Will they be able to bill for all services? How long will the lag time be for reimbursement?

Suzanne Farley, executive director of Wellspring in Bangor, which operates a men’s and women’s residential treatment facility and a detox shelter and also provides outpatient services, said creating a budget for her agency has been extraordinarily difficult.

“We’ve always worked on state contracts, so for us to change our whole mechanism has been incredibly stressful,” she said.


Farley said she’s not against a fee-for-service model, but in this case she’s not convinced that the reimbursement rates for services will be adequate.

The practice does not appear to be widespread in other states. New Jersey implemented a fee-for-service model for substance abuse treatment last year that was met with similar concerns. Minnesota also uses fee-for-service for some addiction treatment.

In Maine, DHHS did not need legislation or any rulemaking – two things that would have opened up the change to public comment – to make the switch.

“The state is saying it’s a client-first model, which on the surface is a great idea, but it doesn’t account for any nuance or how it plays out in the real world,” Shaughnessy said.

Maine has transitioned to a fee-for-service model in other areas in the past, including for medication management under MaineCare. But it also has moved away from fee-for-service, too, most recently with its MaineCare rides program that provides non-emergency medical transportation.

Eric Russell can be contacted at 791-6344 or at:

[email protected]

Twitter: PPHEricRussell

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