Feds: Maine Owes $13 Million for Medicaid and Food Program Mistakes

It’s a double-whammy for Maine’s Department of Health and Human Services. The department overpaid food stamp benefits to about 58,000 households for four months last year. The department also incorrectly calculated Medicaid claims, according to the federal government, and both of those mistakes add up to a tab of mroe than $13 million owed to Washington. 

The cost of the food stamp error? About $4 million. The Medicaid reimbursement error? Just over $9 million. The reaction from the state?

"We don’t like to have this happen. We’re not a faceless bureaucracy," says Dale Denno, the director of the state’s Office of Family Independence. He says the mistake happened when the federal government – the source of all food stamp funding – reduced a portion of benefits last year.

Before the state can implement the new benefit level, it has to make its own rule change. Denno says a few months in, the department discovered they missed a formality, and the result was spending millions of dollars of federal money that wasn’t theirs.

"So it’s not within the discretion of the state of Maine to say, ‘Do we recover or do we not recover? It’s federal money. It’s their decision," Denno says.

Approximately 58,000 households received $20 to $80 dollars in extra benefits. Denno says DHHS will retrieve the money by reducing benefits by 10 percent for the next few months. That’s a seemingly small amount – say, $20 a month for a household that gets $200 in benefits.

But Donna Yellen, the director of the Maine Hunger Initiative, says every dollar matters. "Reducing these benefits by 10 percent or any amount is huge, because the cost of food is so high right now and the struggles that people are having – especially who are elderly and disabled – to make ends meet, they use every food stamp that they can."

The state’s Dale Denno says he understands the hardship and says he’s hopeful the government may forgive some of the burden.

"It’s the 11th hour to be sure, because we plan to send out letters tomorrow that would tell people, ‘Here’s how much you owe, and here’s how we plan to recover it," Denno says. "So we have had a very active dialogue with the Food and Nutrition Service yesterday and today to make sure this is, in fact, what they want us to do."

Even if the federal government relieves some of this debt, it still leaves over $9 million owed in Medicaid claims. That’s due to calculating errors between 2005 and 2009 that were discovered during an audit by the Inspector General’s Office.

Office of MaineCare Services Director Stephanie Nadeau attributes the mistake to a complicated system where reimbursement rates often shifted quarterly. "We’re looking for CMS guidance on how to fix our system, how do we need to build our system to make sure we’re doing this correctly in the future."

Nadeau says the department is talking to the Center for Medicare and Medicaid Services to explore repayment options, and that they may need permission from the Legislature to access money to pay the government back.