The Maine Department of Health and Human Services has told mental health and substance abuse agencies to prepare for cuts because it made a mistake in funding.

However, DHHS officials wouldn’t say how much money has to be made up, what the mistake was or how it happened. They also wouldn’t say how much of a cut there would be.

The department notified agencies last month to prepare for a 4.3 percent cut in some contracts. Those involved said that works out to between $800,000 and $1.6 million.

On Thursday, a DHHS official met with mental health providers and told them cuts likely won’t be as severe as 4.3 percent. Providers said he did not say what the new figure would be. 

The department also has declined to say what, exactly, happened to the money. In a statement last week, a department spokeswoman said only that DHHS “used an incorrect contract allocation as the basis for FY 2015 Mental Health General Fund contracts.” The department refused to elaborate or explain.

The situation is causing concern among the providers who set their budgets based on DHHS contracts, and it’s raising the ire of lawmakers.

“This is one more example of mismanagement by DHHS, similar to the mismanagement at Riverview (Psychiatric Center) and the (MaineCare) rides program,” said State Rep. Peggy Rotundo, D-Lewiston, a member of the Legislature’s Health and Human Services Committee.

She and other lawmakers say they’ve heard from providers anxious about the situation. Providers received a notice from DHHS late last month, but it contained little information. Since then, there have been many questions but few answers.

DHHS spokesman John Martins said this week that the commissioner’s office is “conducting additional analysis to determine if an adjustment is necessary and if one must be made, how it will be implemented.”

He did not answer questions about the number of providers affected, the services involved or what this means for clients. 

“Once this analysis has been completed and finalized, the department will communicate with affected providers,” he said.

He did not say when that analysis would be finished.

Providers believe the cuts will be made to the grants they receive to help people who need mental health or substance abuse services but aren’t insured and don’t qualify for MaineCare, the state’s Medicaid program.

Tri-County Mental Health Services in Lewiston was one of the agencies notified about the looming cut. Executive Director Catherine Ryder said it took her agency by surprise.

“Here’s the major dilemma: We all just finished encumbering our contracts,” Ryder said. “We build budgets where we build in staff salaries and fixed expenses to the agency based on what the department has told us we’ll be receiving for contract funds. … You go into your budget year expecting that will hold and then here we are two months into the fiscal year and we’re being told we’re going to have that 4.3 percent reduction, which is going to hit the bottom line at a time when we have no margin. And we’re not alone.”

She estimated that a 4.3 percent cut would amount to about $75,000 for her agency, “which is a fair number of people that we would have to turn away at the door.”

She was heartened by Thursday’s meeting and the news that cuts may not be so severe.

“I feel very hopeful,” she said.

However, others weren’t as optimistic.

John Painter, service director at Augusta-based Motivational Services, said the impact to his nonprofit community mental health program would be severe, especially because it hasn’t seen an increase in state funding in 18 years. It couldn’t handle a cut of even $6,000 to $8,000, the amount he estimated his agency would lose with a 4.3 percent cut. 

“It’s devastating,” he said. “Any change is a serious problem.”

He said the meeting with the DHHS official Thursday didn’t make him any happier. He was still worried about cuts and didn’t understand what happened to cause them. 

“So now I’m wondering: ‘Where’s this million dollars? And is it going to come back and haunt me in a month or two months?'” he said. “I don’t understand what’s going on.”

ltice@sunjournal.com