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Maine Butts Heads With Feds over Funding for Psychiatric Hospital

AUGUSTA, Maine - Federal funds for the Riverview Psychiatric Center in Augusta are in jeopardy. An appeals board at the Centers for Medicare and Medicaid Services has ruled against the state in its appeal of the decertification of Riverview to receive federal funds. But the dispute is far from over.


The problem started in the spring of 2013, when federal inspectors found serious deficiencies at Riverview and warned the state that federal funding for the hospital was in jeopardy.  The state implemented a correction plan approved by the feds. But another inspection in September of 2013 found additional problems, and federal officials decertified the hospital.  

The state has challenged that action and filed the appeal. But now, that has been rejected by the CMS administrative tribunal.  The next step, says Gov. Paul LePage, is the courts.

"It's going to end up in federal court, we know that. It's just a matter of time," LePage says. "They think we are going at it alone; we are not going at it alone. We are following the process to its end."

Attorney General Janet Mills, a Democrat who often disagrees with LePage, says he's probably right this time. She also shares his view that the feds are in error on Riverview. In a written statement, she says the appeals board ruling was not unexpected and she will recommend the state appeal the case to federal court.

Department of Health and Human Services Commissioner Mary Mayhew is convinced the state is in the right. "We disagreed with the termination of Riverview and we intend to preserve our claim on these federal funds while we pursue our appeal around the decertification," she says.

To assert its claim, Mayhew says, the state drew down $10.6 million in federal funds for the budget year that ended June 30.  She says the department will continue to draw on federal funds until the matter is finally resolved in the courts, and will take legal action, if needed, to continue the flow of dollars.  

Rep. Peggy Rotundo, a Lewiston Democrat, co-chairs the Legislature’s Appropriations Committee and has been waiting for the appeals board decision. "I am not surprised," Rotundo says. "The Appropriations Committee was not confident that the re-accreditation was going to take place, given the mismanagement that has been taking place at DHHS."

As a result, Rotundo says, the budget panel unanimously voted to create a special reserve fund of $20 million from the state surplus to handle any budget shortfalls at DHHS.  Rotundo says that was included in the bipartisan budget bill crafted without the input of the LePage administration.

"We felt it was fiscally responsible to create a stopgap measure to protect the state in case Commissioner Mayhew was wrong and Riverview was not reaccredited," she says.

Mayhew insists that the state fixed the serious problems cited in June of 2013, such as improper record keeping, medication errors and a failure to track the progress, or lack of progress, in the treatment of patients. She says federal officials raised additional, similar concerns in a September 2013 report, but did not give the state a chance to fix the problems.

"Instead of giving us an opportunity to address that concern. they choose to terminate our certification and jeopardize our ability to care for our most vulnerable individuals with mental illness," she says.

Regional CMS officials are reportedly preparing the paperwork to terminate the state's access to the federal funds for Riverview.  If that happens, the state will move to block it. Rotundo says if the dispute stretches into 2015, as is likely, the new Legislature elected in November will have to consider setting aside additional funds to cover the possible future costs of losing the court case.

Journalist Mal Leary spearheads Maine Public's news coverage of politics and government and is based at the State House.