Maine Hospital Association,

October 20, 2003

The Honorable Olympia Snowe
United States Senate
154 Russell Senate Office Building
Washington, DC 20510

Dear Senator Snowe:

On behalf of the Maine Hospital Association's 38 acute-care and specialty hospitals, I am writing in support of your bill, the Medicaid Psychiatric Hospital Fairness Act of 2003.

As you know, the Medicaid program, through the Institution for Mental Diseases (IMD) exclusion, prevents non-public psychiatric hospitals from receiving Medicaid reimbursement for Medicaid patients between the ages of 21-64 who require stabilization. When the Federal government created Medicaid they prohibited Medicaid funding for services at IMDs because Washington viewed mental health services to be the responsibility of the state - particularly since at that time most psychiatric hospitals were state-owned hospitals. The Federal government did provide funding through the DSH-IMD (Disproportionate Share Hospital Fund for Institutes for Mental Disease). Initially these funds were used solely by the private IMDs, however, in 1991, Maine, in response to a severe budget shortfall, began to shift costs associated with Augusta Mental Health Institute (AMHI) and Bangor Mental Health Institute (BMHI) into the federal DSH-IMD pool rather than funding those costs with all general fund dollars.

In the mid-1990s the state passed a rule that entitled AMHI and BMHI to be paid first out of the DSH-IMD pool leaving the remainder for the two private hospitals. With a declining federal cap on the DSH-IMD pool and increasing hospital expenses, there was less and less money with which to reimburse the two private psychiatric hospitals for services provided to this indigent population.

Maine has two private psychiatric hospitals: Spring Harbor Hospital in South Portland and The Acadia Hospital in Bangor. For fiscal year 2000, Acadia had inpatient admissions of 1,731 and Spring Harbor had 2,047. Both hospitals also provide a significant amount of outpatient services.

The two private hospitals play a pivotal role in the delivery of mental health services especially for low-income individuals. As the state has desired to encourage greater behavioral services within communities, the Department of Behavioral and Developmental Services worked with both of these hospitals to increase the number of beds and services available to allow for certain patients to be placed in these hospitals rather than the state institutes. The inability of these two hospitals to effectively meet these patient needs would have a detrimental impact throughout the state especially because communities are already stressed attempting to develop needed community-based services.

Your legislation will allow non-public psychiatric hospitals to receive appropriate reimbursement for Medicaid beneficiaries between the ages of 21-64 who require emergency treatment and stabilization as required by EMTALA. This will relieve overcrowding in emergency departments and provide the appropriate care these patients deserve in a more timely manner.

Thank you for addressing this important issue. We support the Medicaid Psychiatric Hospital Fairness Act of 2003 and look forward to working with you and your colleagues to ensure swift passage of this legislation.

Sincerely,

Steven Michaud
President, Maine Hospital Association

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