AUGUSTA — The Maine Senate killed a $121 million supplemental budget bill Thursday after Republicans refused to drop their demand that permanent MaineCare reforms be included in the emergency funding measure.

The impasse means lawmakers will likely have to negotiate a new bill to balance the state’s budget over the next three months. It also means Maine hospitals and other medical providers will not be fully reimbursed for medical care to MaineCare patients until a new deal is reached.

The Senate began a final debate late Thursday morning after weeks of negotiations ended with the abrupt collapse late Tuesday of a compromise bill that was initially endorsed in both the House of Representatives and Senate.

Most Senate Republicans voted against the legislation when it came up for final enactment, resulting in the Senate failing to secure the two-thirds approval needed to pass the bill as an emergency measure.

After a sometimes tense debate and a series of motions to try and salvage the bill on Thursday, senators failed to break the deadlock, leaving the Senate at odds with the House and resulting in the bill being declared dead.

Leaders from both parties said the outcome was disappointing and they are trying to figure out next steps, while Democratic Gov. Janet Mills, who put forward the original bill, blamed Senate Republicans for sinking the budget and harming MaineCare providers.

“The refusal of Senate Republicans to support the bipartisan agreement on the supplemental budget is harmful for Maine health care providers and their patients,” Mills said in a written statement Thursday.

“Providers have said loudly, and clearly, that this stalemate is endangering their finances and will impact care for vulnerable people all around our state. Yet instead of paying hospitals, nursing homes and other health care providers what they are owed, Senate Republicans have put them at even greater risk.”

NO AGREEMENT DURING DEBATE

Republicans have continued to call for reforms to MaineCare, the state’s Medicaid program, and told Democrats on the floor Thursday that they want to see changes to the program to ensure its future sustainability before they will vote for the budget. They have specifically called for enrollment limits for “able-bodied” childless adults as well as a requirement for work, education or community service.

“I’m incredibly frustrated,” Assistant Senate Minority Leader Matthew Harrington, R-Sanford, said after the bill was killed. “Going back over a month, we’ve laid out plenty of opportunities for (Democrats) to come to the table and they flat out told us no, they weren’t able to do anything on MaineCare. And that’s where we are.”

Democrats on Thursday were encouraging Republicans to reconsider Tuesday’s decision to vote down the proposal and support an amendment they had initially approved. They have also said that debate on MaineCare reforms is better suited to discussions around the two-year budget and not the supplemental budget, which lawmakers are under pressure to pass quickly.

“The question before us is simple,” Sen. Cameron Reny, D-Bristol, said during the Senate floor debate. “Will we fulfill our responsibility to provide critical health care services and make sure we prevent a devastating infestation of spruce budworm in the most forested state in the nation? Or are we going to let nursing homes, clinics and the timber industry suffer from our inaction?”

Nearly all of the $121 million supplemental budget is dedicated to closing a $118 million deficit in MaineCare costs through June, the end of the current fiscal year. Another $2 million is proposed to fight spruce budworm infestations threatening Maine forests.

Some Republicans, including Harrington, called for separating the two issues and making the spruce budworm funding a separate bill if the MaineCare debate is going to continue. “A standalone bill could easily be brought forward and we could provide funding for that immediately,” Harrington said, adding that his caucus is prepared to submit such a bill.

The compromise amendment that received initial support in both chambers Tuesday included new limits on housing assistance, a requirement for an independent audit to look “for fraud, waste and abuse” in the MaineCare program and cost-of-living pay increases for direct care workers, which all stem from priorities Republicans had pushed for.

Sen. Rick Bennett, R-Oxford, who was one of just two Republican senators who supported the bill with the amendment earlier in the week, tried to keep the bill alive Thursday with a motion that included forming a committee to try and find common ground. After the proceedings, however, he said lawmakers will likely need a new bill.

“I tried every move I could think of to put the bill in a position where people could take a breather and have a chance with each other,” Bennett said. “I think there’s a lot of common feeling, but we’re apparently past that point and people are pretty dug in.”

Tuesday’s final Senate vote on the measure was just two votes shy of the two-thirds majority needed to pass on an emergency basis and take effect immediately, so Democrats were hoping to persuade two additional Republicans to support the bill.

Republicans argued that they were making the stand in part because they had been shut out of the budget-building process in the past when Democrats used their majority to adopt two-year budgets on partly-line votes.

Sen. Bruce Bickford, R-Auburn, said during the course of debate that he planned to vote in favor of the bill after being absent Tuesday, but he wanted a commitment from Democratic leaders that Republicans would be able to help shape the two-year budget that lawmakers will vote on in the coming months.

No Democratic leaders responded to Bickford’s request on the floor, though some Democratic senators did, and he ultimately did not vote in support of the bill.

WHAT’S NEXT?

Senate President Mattie Daughtry, D-Brunswick, said after the proceedings that she was unable to answer Bickford’s question while she was presiding over the Senate.

“I am always going to keep working towards that (two-thirds support of the two-year budget), but we are going to have to get creative to make sure the lights don’t turn off before the end of the year,” Daughtry said.

The Maine Constitution requires the governor to submit and lawmakers to pass a balanced budget, which often requires the Legislature to approve updates when actual revenues and expenses don’t align with projections. In this case, the supplemental budget before lawmakers would have closed a deficit in the current two-year budget ending June 30.

Lawmakers are also working on another two-year budget in which the current Legislature can set its spending priorities. That’s usually where bigger policy debates take place and enacted.

The supplemental budget bill that was killed Tuesday could be revived with a vote of two-thirds support in both chambers, though it is unlikely after lawmakers already failed to get two-thirds support on it. Lawmakers could also take up a brand new bill.

“We’re at a place where we weren’t able to get over this threshold and every single day we’ve been delaying, there are financial concerns,” Daughtry said. “So we need to get creative and find a way to deliver for Mainers.”

HOSPITALS: HEALTH CARE IS AT RISK

Failure to pass the legislation on an emergency basis means the Maine Department of Health and Human Services has had to start reducing MaineCare payments owed to health care providers.

On Wednesday, the department began paying only 70% of prospective interim payments to critical access hospitals, while withholding payments for all hospital claims greater than $50,000 and payments to large retail pharmacies, large durable medical equipment providers, and out-of-state providers of hospital, ambulance, pharmacy and durable medical equipment services.

Critical access hospitals are smaller, isolated, rural community hospitals designated by the federal government to receive higher reimbursement rates for Medicare and Medicaid, while prospective interim payments provide a steady source of revenue based on anticipated MaineCare reimbursements so that facilities can pay fixed expenses throughout the year.

The department is also temporarily withholding payment for multistate chain, large health system, and out-of-state retail pharmacies.

Jeffrey Austin, vice president of government affairs and communications for the Maine Hospital Association, said he was “very disappointed” by the Senate vote.

“We have members who cannot handle this challenge,” Austin said. “ Hospitals will continue to do our job. We’re frustrated the Legislature didn’t do its job.”

Dr. Jeffrey Barkin, a past president of the Maine Medical Association, said the Senate’s failure to pass an emergency supplemental budget will have “profound” impacts that would lead to a reduction of health care services not only for MaineCare patients, but for everyone.

“I don’t view this as a partisan issue — I view this as a health and safety issue,” Barkin said. “This is really scary.”

Barkin said hospitals are struggling financially and most don’t have enough cash on hand to last much more than a month, let alone until September, which is when funding could become available if Democrats pass the budget without two-thirds support needed to qualify as an emergency. He said providers are already making contingency plans to leave the state.

“It’s incomprehensible to me how members of any party would put us in a position where the average Mainer has to fear that the health care for themselves, their children or their families is at risk,” he said. “And if the (emergency) supplemental doesn’t pass, it is.”

Barkin agrees that lawmakers need to discuss ways to make MaineCare more sustainable, but risking the stability of medical providers is not the way to do it.

“Right now (reform) not the issue. The issue right now is not to destroy the whole system,” he said.  “The time to discuss the color of an umbrella is not in the middle of a hurricane. And that’s where we are right now.”

Staff Writer Randy Billings contributed to this report. 

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