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Maine Veterans’ Homes says it needs $3.4 million from state to close funding gap

The entrance to the Maine Veterans Homes facility in Scarborough, a 125-bed retirement home for veterans and their spouses.
Nick Schroeder
The entrance to the Maine Veterans Homes facility in Scarborough, a 125-bed retirement home for veterans and their spouses.

Maine Veterans’ Homes is asking for more than $3 million from the state to close a sizable funding gap as it commits to keeping all six facilities open in the state, at least for now.

The annual report from Maine Veterans’ Homes stated that it costs $15 million more to care for residents at its six homes than the nonprofit receives in reimbursements. Overall, the nonprofit organization reported a financial loss of $16.4 million in fiscal year 2022, which officials attributed to inflation, higher wages, the need to hire more costly temporary staff to fill vacant positions and pandemic-related expenses.

Speaking to members of the Legislature’s Veterans and Legal Affairs Committee on Wednesday, Maine Veterans’ Homes CEO Sharon Fusco said the state saves $12.3 million in MaineCare expenses because the federal government reimburses the homes for care for nearly one-quarter of the residents because they are rated as 70 percent disabled.

So Fusco and the organization are asking the state to provide $3.4 million, which in turn will leverage $7 million in federal matching funds. That money, combined with other sources, will help close the funding gap, Fusco said. Gov. Janet Mills set aside $765,000 in her proposed budget for the homes.

“Now I also know that that’s simple math and it’s not that easy,” Fusco said. “I also know that it requires partnership with the state to figure out specifics of how that happens. And we’re willing to do that. I know that I have a charge and my duty is to make sure that our veterans continue to receive the highest care possible – the highest quality care – at the lowest possible cost so that we can continue to serve as many veterans as possible.”

Maine Veterans’ Homes sparked outrage last year when it announced plans to close homes in Caribou and Machias. State lawmakers, Maine’s congressional delegation and the Mills administration seemed caught by surprise by the announcement. And they responded by providing an additional $3.5 million to Maine Veterans’ Homes while passing a bill that temporarily blocked the closures and added additional legislative oversight to any future closure decisions.

The annual report, submitted to the Veterans and Legal Affairs Committee, states that the organization’s board of trustees commits to remaining open in all six locations “as long as the demand is present and the labor force is available. Financial support from the state is required to make all homes with the MVH system of care sustainable.”

Maine Veterans Homes currently has 512 beds at the six facilities – located in Augusta, Bangor, Caribou, Machias, Scarborough and South Paris – with 450 to 490 of those typically filled on any given day. But an analysis conducted for the nonprofit projects that the number of veterans over age 65 in Maine will decline by 12 percent from 2020 to 2030 and then further decline by an additional 25% by 2040, reducing demand for long-term care.

There was no discussion during Wednesday’s briefing of a preliminary probe recently launched into the nonprofit’s finances and accounting practices by the Legislature’s Government Oversight Committee. That probe was a response to a whistleblower’s allegations about the finances of the state-chartered nonprofit. Maine Veterans’ Homes board of trustees has said that is launching its own investigation into the undisclosed allegations.