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Portland Settles DHHS Lawsuit Over State General Assistance Payments

The city of Portland has reached a settlement in its lawsuit against Maine’s Department of Health and Human Services for withholding General Assistance payments. DHHS will pay the city of Portland the majority of the money that was withheld.

DHHS retroactively withheld General Assistance reimbursements to the city of Portland from June 2014 to February 2015 after an audit found that the city provided General Assistance to individuals who were ineligible. The problem stemmed from Portland billing the state for the entire operational costs of the Oxford Street Shelter, versus on a per person basis for who qualified for assistance. The city of Portland sued the state for withholding nearly $2 million in reimbursements retroactively, and this summer, a Superior court agreed that the state’s actions were improper.

Though DHHS initially sought an appeal, the two side have now worked out a settlement. Portland City Manager Jon Jennings says he’s glad to put an end to the costly legal battle.

“The state was denying what was truly owed to the city of Portland, and they were denying the reimbursement, hence, the reason for the lawsuit, hence the reason for the settlement, that the state realizes that they owed us the money,” he says.

DHHS will pay Portland $1.3 million. In a written statement, a DHHS spokeswoman says Portland has made the necessary corrections to its General Assistance program, and that the state will continue to ensure the program is properly administered.