Maine’s struggling hospitals are bracing for another hit to their finances after the U.S. Senate’s narrow vote Tuesday to pass a sweeping tax and spending bill that is expected to cut off tens of thousands of Maine residents from Medicaid coverage.

Penobscot Valley Hospital in Lincoln, a rural hospital located about an hour from Bangor, already operates on thin margins and can’t absorb another significant drop in revenue, Chief Financial Officer Elisa Blethen said in an interview Wednesday.

“There’s not much we can close without closing the hospital entirely,” Blethen said.

Maine hospitals, especially those in rural parts of the state, have warned in recent weeks that the proposed cuts to Medicaid would mean more uninsured patients coming in to emergency rooms for care that they can’t pay for, and that the hospitals can’t afford to give away — even though they are required to.

“Many hospitals are looking into the abyss,” Steven Michaud, president of the Maine Hospital Association, told the Press Herald last month as the bill moved through Congress.

The threat to rural hospitals was one of the chief reasons Sen. Susan Collins says she voted against the bill Tuesday. She was one of just three Republicans to oppose passage, but the bill passed anyway with the help of a tie-breaking vote from Vice President JD Vance. It is now back before the House of Representatives for a possible final vote this week.

Sen. Angus King, I-Maine, also voted no along with all Senate Democrats. Both of Maine’s members of the House, Rep. Chellie Pingree, D-1st District, and Rep. Jared Golden, D-2nd District, voted against an earlier House version of the bill last month.

Collins said her efforts to cushion the impact on hospitals did have some success; the final Senate version included $50 billion for emergency assistance to rural hospitals. “I am very eager to get funding to them as quickly as possible,” she said.

HOSPITALS ON THE EDGE

It’s not yet clear how soon the Medicaid cuts would begin to erode hospital revenues.

Northern Light, the state’s second-largest hospital network, said in a news release Tuesday that it will have to restructure and adjust to the combination of financial pressures facing its hospitals. It did not provide any specific plans, but did say “no hospital will be closed as a part of this work, however some services offered at some locations could change.”

“Our focus is on improving the health of the communities we serve and safeguarding access to healthcare,” Tim Dentry, president and CEO of Northern Light Health, said in a written statement. “The strategies we employ will likely include evaluating our workforce and leadership structure and maximizing revenue opportunities to strengthen our future.”

Northern Light Health’s Inland Hospital in Waterville closed this year. Others have closed birthing centers and emergency rooms to cut costs.

Northern Light A.R. Gould Hospital in Presque Isle and Northern Light Maine Coast Hospital in Ellsworth have also been identified as being at especially high risk of closing in the near future if the bill pending in Congress is signed into law, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.

And a study by a national think tank, the Center for Healthcare Quality and Payment Reform, recently concluded that half of Maine’s 24 rural hospitals are at risk of closing even without factoring in further cuts to Medicaid.

“Like hospitals and healthcare systems in Maine and across the nation, Northern Light Health faces industry headwinds including the proposed changes to Medicaid as well as increased costs for supplies, pharmaceuticals, and labor, combined with reduced post-COVID volumes, low reimbursement and high denial rates from payers, and significant costs for contract and temporary labor,” Tuesday’s release from the hospital network said.

Lisa Harvey McPherson, vice president of government affairs for Northern Light Health, said in an email Wednesday that the network was grateful for Collins’ opposition to the bill and her efforts to secure assistance for rural hospitals.

“From the perspective of Northern Light Health, reducing federal funding for the MaineCare program (Maine’s Medicaid program) by an estimated $5.9 billion dollars over the next 10 years will result in fewer individuals covered by MaineCare, a reduction in reimbursement for services for those with MaineCare and very likely eliminating certain services from MaineCare coverage in order to balance the financial impact,” she said. “We will be working with the American Hospital Association to understand the rural hospital healthcare (funding) impact to our health system.”

Katie Fullam Harris, chief government affairs officer for MaineHealth, the state’s largest health care system that includes Maine Medical Center and seven rural hospitals, also credited Collins, as well as the rest of the delegation.

“It is absolutely critical that Maine people recognize how their delegation, in particularly Senator Collins, who was under tremendous pressure, stood up and supported rural health care for the state of Maine,” Harris said.

“Obviously, it’s too early for us to identify what the timing of cuts or impact will be as the bill has gone back to the House now. Until it is finalized, we really can’t speculate on the timing of any impact,” she said.

The Maine Hospital Association also released a written statement thanking Collins and the rest of the Maine delegation for standing up for the state’s health care networks and opposing the cuts.

“Hospitals do not oppose reasonable reforms to Medicaid that recognize both areas where spending could be curbed as well as areas where spending should be increased,” the association said. “None of the reconciliation proposals achieve that balance. Instead, Maine hospitals stand to lose tens of millions in reimbursement under the proposal as it currently stands.”

FACING ‘DEVASTATING’ CUTS

Penobscot Valley Hospital in Lincoln is also teetering and facing difficult choices, said Belthen, the CFO.

Blethen said the independent hospital has essentially zero reserves, and runs on a $50 million budget. It finished the 2024 budget year about $900,000 in the red, and this year had to close outpatient behavioral health services for financial reasons.

She said Medicaid cutbacks would be “devastating” to Penobscot Valley, and many rural hospitals.

If the uninsured rate goes up, that alone would blow a hole in Penobscot Valley’s budget, Blethen said based on estimates she’s seen. If the percentage of uninsured patients being treated at Penobscot Valley increases from 5% to 8% of total patients seen, that’s at least a $1 million revenue gap that they would have to fill, she said.

Banks are reluctant to approve loans to Penobscot Valley, because the hospital was in bankruptcy a few years ago. Although it has since emerged from bankruptcy, it’s left the hospital in a precarious financial position.

“There’s a great risk of additional services being cut,” Blethen said, if the uninsured rate increases.

Uninsured patients tend to be sicker by the time they seek care, also driving up health care costs, she said.

The hospital is the closest option for many patients who would otherwise have to drive hours to Bangor or Millinocket for care if Penobscot Valley were to close.

It employs 200 full-time and part-time workers, so if it closes those jobs would be lost to the community. And without nearby health care, patients would have fewer choices.

“We’ve had patients come here who’ve had a stroke or heart attack, and we’ve had them stabilized here before sending them to larger hospitals. We’ve saved people’s lives,” Blethen said.

Staff Writer Brianna Earle contributed to this story.