AGO 2009-03.

Case DateApril 23, 2009
CourtMaine
Maine Attorney General Opinions 2009. AGO 2009-03. 2009-03April 23, 2009The Honorable Kevin L. RayeSenate Minority Leader 3 State House Station Augusta, ME 04333-0003 Dear Senator Raye: You have asked whether a General Fund bond issue to provide funds to pay outstanding MaineCare settlements owed to hospitals would be constitutional. Your question specifically refers to article V, part 3, § 5 of the Maine Constitution ("Section 5"), which provides (in pertinent part) that "the Legislature shall enact general law prohibiting the use of proceeds from the sale ofbonds to fund current expenditures..." For the reasons that follow, we believe that MaineCare hospital settlements are current expenditures and that Section 5 prohibits the use of bond proceeds to make those payment. Facts We begin by setting out our understanding of the hospital settlements that are the focus of your inquiry. The Department of Human Services ("DHHS"), through the joint federal-state Medicaid program known as "MaineCare," pays hospitals and other providers for medical services to individuals of limited income. 22 M.R.S.A. §§ 10, 12, 3173 (2007). If a State elects to participate, as Maine has, it mustadopt a Medicaid State Plan and comply with certain requirements and restrictions imposed by federal Medicaid statutes and regulations. 42 U.S.C.S. §§ 1396, 1396a, 1396k (2007). The State Plan must include a method for reimbursing health care providers for the medical services they provide to MaineCare members. 42 U.S.C.S. §1396a(a)(13)(A). Each State establishes a methodology for Medicaid hospital reimbursement, which is set forth in its State Plan. 42 U.S.C.S. § 1396(a)(13)(A). Pursuant to 22 M.R.S. §§ 3172-3193 (2007), Maine adopted a State Plan that establishes a three-step process for reimbursing hospitals. First, prior to a particular fiscal year, DHHS estimates the total amount of Medicaid reimbursement a hospital will be owed for the fiscal year and makes weekly interim payments over the course of the year. Second, at the close of the hospital's fiscal year, DHHS issues an Interim Settlement based on cost data in the hospital's as filed (but un-audited) Medicare cost report. Third, DHHS issues a MaineCare Final Settlement after it receives both the Notice of Program Reimbursement and the audited Medicare cost repmi from Medicare. We take your use or the term "hospital settlements" to encompass both the Interim and Final...

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