Disagreement between Democratic Gov. Janet Mills and Republican lawmakers could result in another financial setback for Maine’s struggling nursing homes and long-term care facilities.

Seaside Skilled Rehabilitation Center in Portland. Derek Davis/Staff Photographer

Republicans went on the offensive Monday against Mills’ decision to delay action on a bill that would have provided $1.4 million in the next two-year state budget to help nursing homes cover their increasing labor costs. Critics said the move could be the death knell for some facilities already on the brink of financial ruin.

But Mills’ office said the bill was held last week until the Legislature meets again over concerns that the state would end up losing federal matching funds, leaving state taxpayers on the hook for the full cost of elderly patients who receive Medicaid benefits under the MaineCare program.

Sen. Marianne Moore, R-Calais, a member of the Legislature’s Health and Human Services Committee, said Mills should have signed the bill, which passed with unanimous votes in both bodies of the Legislature in June.

“That would have been an easy one to sign right off the bat,” Moore said.

The bill can’t become law or be vetoed by the governor until the Legislature reconvenes for at least three days. It would provide money to help nursing homes maintain a pay increase for workers that was approved in the state’s last supplemental budget, in 2018, but was not continued into 2019.

Moore and other Republicans said they were dumbfounded by Mills’ inaction, as the measure was a top priority for them. But Democrats shot back Monday, pointing out that some Republicans, including Moore, voted against Mills’ two-year state budget, which includes $8.5 million in additional state funds for nursing homes over the next two years.

Mills’ spokeswoman, Lindsay Crete, said the governor held the bill because it would have jeopardized federal matching funds for Medicaid. Crete said it was disappointing that Republicans were “playing politics” with nursing homes.

Rick Erb, president and CEO of the Maine Health Care Association, which represents more than 200 nursing homes and long-term care facilities in Maine, said differing interpretations of how the federal government will see the funding boost have led to the standoff.

Erb said consultants for his organization believe the Mills administration, particularly the Department of Health and Human Services, is misinterpreting the federal rules for what’s known as “upper payment limits.”

He said his organization has been in touch with Mills’ administration and hopes it can find a resolution to allow the measure to move forward, with its language directing the money to employee wages.

Moore said that in the final days of the Legislature, funding for the nursing home measure was placed in the state’s new two-year budget, which Mills signed into law. Although the money was set aside, it can’t legally be spent because the governor did not sign the bill directing DHHS to spend it as intended.

“The governor believes in supporting Maine’s nursing homes,” Crete said in an email to the Portland Press Herald. “That is why her budget increased funding for (cost-of-living adjustments), to help alleviate the financial strain on nursing homes and why her administration will work with the Legislature in the coming months to accomplish a funding strategy that maximizes federal money, not jeopardizes it.”

The nursing home bill was sponsored by state Senate President Troy Jackson, a Democrat from Allagash. He told the Health and Human Services Committee at a public hearing during the legislative session that the funding was essential for nursing homes to keep pace with the wage growth that has been triggered by an increasingly tight labor market and the state’s new minimum wage law.

Jackson said seven nursing homes in Maine had been forced to close in the last two years because their reimbursement rates from the state MaineCare program were not keeping pace with inflation, including labor costs.

“Six of those closed in 2018, which caused 250 nursing home residents to be displaced and resulted in 400 people losing their jobs,” Jackson said. “These dedicated workers can’t afford to go without pay, and elderly Mainers can’t afford to go without care.”

Lisa Henderson, executive director of LeadingAge, an association of nursing homes in Maine and New Hampshire, said nursing homes could not unilaterally increase their fees to cover increasing costs.

“It is not within providers’ power to simply charge more for their services, as any private employer would do in the face of rising operating costs,” Henderson told lawmakers at the time. “Only you have the power to provide some relief.”

Wanda Pelkey, the chief financial officer for the South Portland-based First Atlantic Healthcare, which cares for 1,400 residents and employs 1,500 workers, said labor costs for Maine nursing homes increased by 8 percent in 2018. Some of those increases were temporarily funded by the Legislature in 2016, when lawmakers passed a two-year budget that included a 10 percent reimbursement increase for nursing home wages. But that money was one-time funding, and it expired at the end of the state’s last fiscal year on June 30.

Jackson said Monday that Democrats in the Legislature all supported the current state budget, which included the increased funding as well as the additional $8.5 million in Mills’ proposal. He said they would continue to work with the Department of Health and Human Services to leverage federal funding to support nursing homes without Maine taxpayers having to foot the bill.

“We know that Maine nursing homes are struggling,” Jackson said in a prepared statement. “It’s why every Democrat in the Legislature fought for, voted for and passed additional funding for our nursing homes in the state budget. ”

Jackson likewise took aim at Republicans, including Moore, who opposed the state budget bill.

“While I appreciate the Senate Republicans’ concern for our seniors and this bill, I wish more of them would have voted for a budget that provides some much-need funding for these facilities.,” Jackson said. “Where I’m from, actions speak louder than words.”

But Moore said she opposed the budget before the nursing home pay hike funding had been approved because it was unsustainable, growing 11 percent over the previous two-year budget while overall inflation grew at just 1.7 percent.

“I simply could not vote for a budget where the spending was higher than the revenues,” Moore said Monday.

Crete said Republicans were wrongly trying to imply Mills did not care about nursing homes or elderly Mainers.

“This is a governor who struggled to find services for her own parents and for a husband with multiple medical issues at the end of his life,” Crete said.  “She recognizes and understands the value of nursing homes. She wants to strengthen their ability to provide care and help stabilize their finances while not risking federal funds and burdening Maine taxpayers.”