AUGUSTA — Gov. Janet Mills is allowing a bill to boost state Medicaid payments to nursing homes to become law, announcing the move in a letter to the Legislature’s budget-writing Appropriations Committee on Monday.

The Democrat had been holding the bill since June over concerns that state increases to the reimbursement rates could exceed a threshold that would jeopardize federal Medicaid funding. The rate increases were put in place to help nursing homes cover increasing labor costs triggered by a tight labor market and increases to the state’s minimum wage.

Mills also was concerned that the Legislature hadn’t provided enough funding in the bill to fully cover the $1.4 million payments. But she said Monday that both her concerns had been alleviated by language added to the bill.

Her letter also spelled out that the state’s Department of Health and Human Services, the state agency that administers the payments, must show that the payments are being directly applied to increasing wages for front-line nursing home employees.

“(The bill’s) funding should most appropriately go toward supporting wages of workers who are most directly involved in the care of those residing in nursing facilities, not for administrative costs or increases in executive leadership compensation,” Mills wrote.

The bill’s sponsor, Senate President Troy Jackson, D-Allagash, said Monday that the bill was written carefully so it wouldn’t threaten Medicaid funding, and to help keep nursing homes open for local residents.

“While this bill only closes the gap, it’s a step in the right direction,” Jackson said.

Mills and Republican legislative leaders sparred over her refusal to allow the bill to become law without her signature in July. Republicans said holding up the funds would force more nursing homes in Maine to close.

Mills also wrote that a special Long-term Care Workforce Commission, set up by the Legislature to study how to stabilize the workforce, would likely emphasize the need to improve supports for direct-care workers.

The rate increases, which were set to go into effect in July, would be retroactive, DHHS Commissioner Jeanne Lambrew told lawmakers on the Appropriations Committee on Monday.

Republican leaders were grateful Mills allowed the bill to go forward after the six-month wait, but were concerned that funding levels in the measure were only a fraction of what’s needed to stabilize nursing homes.

Senate Minority Leader Dana Dow, R-Waldoboro, said DHHS should use unspent federal Medicaid funds, and that reimbursement rates should be increased by $7 million a year, not the $500,000 in the current law.

“The commissioner has made it clear that there is enough funding available in unspent Medicaid dollars to cover this cost and stabilize the state’s nursing facilities, thus preventing further closings,” Dow said in a prepared statement. “We hope that Gov. Mills will immediately direct Commissioner Lambrew to use these unspent resources for this purpose and protect the system of care for Maine’s elderly.”

House Republican Leader Kathleen Dillingham of Oxford said she was pleased that Mills had released the bill, and pointed to recent nursing home closures across the state.

“I credit public supporters of Maine nursing homes and my Republican colleagues for keeping this issue alive,” Dillingham said.

In other action on Monday, Lambrew estimated the cost of eliminating a state waiting list for services for people with intellectual or developmental disabilities at $60 million to $80 million a year. But Lambrew also said that even with the funding, the state’s ongoing workforce shortages could prevent the department from being able to eliminate the waiting list.

Both issues will likely be the subject of additional legislation when the Legislature convenes in January.

 

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