Budgeting Errors Found At DHHS Could Cost State Millions 

New leadership at the Department of Health and Human Services has uncovered costly errors, what they claim are tens of millions of dollars worth of mistakes.It includes large overpayments to hospitals and the new head of DHHS says the Baldacci administration is to blame.New DHHS commissioner, Mary Mayhew, briefed lawmakers on what she calls financial management deficiencies her team has uncovered that could force the LePage administration to formulate a new supplemental budget. “These are absolutely problems that we inherited from the previous administration,” Mayhew told reporters at the state house on Thursday.Governor LePage also addressed the discovery in a statement released by his office. “We knew we faced many challenges,” Governor LePage said. “Commissioner Mayhew and her new leadership team are finding a disturbing number of problems at the department that we have to address.”Mayhew says the problems stem from changes made in the claims processing system last September. She says the state is on pace to overpay hospitals by $119 million by by the end of the fiscal year which ends June 30th. “So we have been overpaying hospitals based on what was budgeted for payments,” she said. “To date more than $66 million dollars, state and federal, has been paid out over budget for hospital payments.”Mayhew also says there’s been a spike in weekly claims to MaineCare providers. Those payments have jumped from an average of $39 million dollars a week to $49-million. Mayhew says they’re not sure if that’s due to the new claims payment system or increased use of healthcare services. “The worst case scenario is a $30 million hole in this year’s budget between now and the end of June,” she said.Mayhew says they’ll look for savings that could help plug that gap. Both Mayhew, and the governor, say they’ve inherited a mess from the Baldacci administration. “The previous administration absolutely should have changed hospital payments to reflect the new claims processing,” Mayhew said. “The assumptions that the current fiscal year budget is based upon trend assumptions built by the previous administration.” “We’re still assessing the problem, but we wanted to let the public and lawmakers know right away what we’re facing,” Governor LePage said. “We inherited a big mess, but we are going to get it fixed and find solutions that work for consumers, providers, and taxpayers.”And there’s more bad news. The state has lost an appeal and must reimburse the federal government for certain Medicaid expenses that were not allowed. That could cost an additional $30-million. Mayhew says they’ll decide next week whether to appeal that case to the first district court of appeals.