Maine lawmakers are running out of time to pass an emergency supplemental budget and avoid reduced payments to health care providers serving low-income through the state’s Medicaid program.

Failure to pass a $121 million supplemental budget by Tuesday will force the state to issue some partial reimbursements because of a $118 million deficit in the state’s MaineCare program. The reduced compensation for care could eventually lead to a loss of access to important health care services, especially in rural areas.

Last Tuesday’s session ended without the Senate taking any action on the budget, which was passed by the House of Representatives on Feb. 25 with a party-line vote. The House passage came after it was stripped of its emergency preamble, which means the funding would not be available until 90 days after the session ends.

Bipartisan support is needed to pass an emergency bill that would take effect immediately.

The Maine Department of Health and Human Services this week notified health care providers about its plans to withhold certain payments starting Wednesday if an emergency budget is not passed this Tuesday with the support of two-thirds of the Legislature. The reductions are needed to ensure the program does not run out of money before the new fiscal year starts July 1.

While the reduced payments will add financial strain to health care providers, MaineCare patients are unlikely to see an immediate impact. That’s because health care providers are required to provide the state with 30 days notice before they stop serving patients covered by the public insurance program, according to Ann Woloson, executive director of Maine Consumers for Affordable Health Care, a nonprofit, healthcare advocacy group.

That policy, however, contains an exception for “reasonably unforeseen circumstances.”

“We have gotten calls (from people) saying they’re worried about it,” Woloson said, “but we haven’t heard anybody saying the provider is closing their door and no longer taking MaineCare beneficiaries.”

Beginning Wednesday, the state will only pay 70% of prospective interim payments to critical access hospitals, while withholding payments for all hospital claims greater than $50,000 and payments to large retail pharmacies, large durable medical equipment providers and out-of-state providers of hospital, ambulance, pharmacy and durable medical equipment services.

Critical access hospitals are smaller, isolated, rural community hospitals designated by the federal government to receive higher reimbursement rates for Medicare and Medicaid, while prospective interim payments provide a steady source of revenue so these facilities can pay fixed expenses throughout the year.

Maine has about 17 critical access hospitals, all of which are located in rural areas, including Bridgton, Calais, Dover Foxcroft, Greenville, Houlton, Millinocket and Rumford, according to the Maine Hospital Association.

Jeffrey Austin, vice president of the Maine Hospital Association, said that a couple of rural hospitals only have enough cash to last a week or two without having to take out a line of credit to pay for expenses, while others may last a month or so.

“We’re going to hold out some hope they can get (a budget deal) done, because if they don’t, and they actually curtail payments to hospitals, it will have a pretty big impact and potentially harmful impact for several of our members who simply don’t have the cash on hand to float this curtailment for very long,” Austin said.

Austin said hospitals are obligated to continue serving MaineCare patients, but financial stress caused by a lack of revenue could force facilities to cut or temporarily suspend services for all patients.

Austin said the curtailments risk running up a debt to hospitals similar to the $183.5 million previously owed to 39 hospitals that former Republican Gov. Paul LePage paid off in 2013 using proceeds from the state liquor contract.

“We don’t want to go back to those days,” Austin said.

Dr. Jeffrey Barkin, a past president of the Maine Medical Association, said in a March 1 Press Herald op-ed that a party-line budget approval and having to wait until September for full reimbursements would be “disastrous” for hospitals and mental health counselors. He said the $50,000 cap that could be placed on reimbursements is the equivalent of two or three nights in the ICU.

“Few health care entities have more than enough cash on hand to cover 40 business days, which includes the salaries of the employees and the other overhead costs,” Barkin wrote. “This means many practices will close, further worsening a health care access crisis in Maine that has been extensively covered in this newspaper and others.

James Rohrbaugh, chief financial officer for Northern Light Health Care, said having to wait 90 days to get their full reimbursement from the state would delay $18 million, or roughly $6 million a month. The biggest impact would be on Eastern Maine Medical Center, since claims over $50,000 would be capped, but other more rural hospitals would feel the pinch too.

“It’s certainly concerning for the sustainability of rural health care,” Rohrbaugh said, noting the headwinds rural hospitals face with inflation and labor challenges. “The kinds of dollars we’re talking about here certainly will push everybody into a place where you have to make tough decisions and be rethinking what you’re doing and how you’re doing it.

A DHHS spokesperson did not respond to questions Friday about how much the state expects to save by withholding payments as described over the next two weeks, what additional payments would be withheld if the budget impasse last through the end of the month and whether the agency has heard from any medical providers seeking to discontinue services for MaineCare patients.

State guidance issued Wednesday states: “The Department anticipates the March 26 cycle will need to also include a temporary hold on payments beyond those listed above, using a ‘first in first out’ payment approach based on date and time of submission, up to a weekly aggregate claims cap. Under this approach, the Department plans, to the extent it is able, to protect providers who are the most dependent on MaineCare revenue.”

Leaders for both parties would not provide additional details on Friday about any negotiations that may be taking place behind the scenes.

Republicans have insisted on including a proposal originally made by Gov. Janet Mills to limit housing assistance through the General Assistance program to three months and adding work requirements for MaineCare before they will support the $121 million supplemental budget, of which $118 million is devoted to filling the projected MaineCare deficit.

But Democrats have balked at those ideas, largely because the bipartisan budget committee had previously agreed to delay discussion about those proposals and other major policy changes until lawmakers negotiate the biennial budget for the 2026 and 2027 fiscal years.

Senate President Mattie Daughtry, D-Brunswick, told the Press Herald on Tuesday that her caucus is open to other cost-cutting ideas from Republicans, as long as they have already been publicly discussed and received public hearings.

Her office did not provide any details about what proposals — if any — have come forward since Tuesday.

“President Daughtry has been in regular conversations with the Speaker, minority leaders and (Appropriations and Financial Affairs Committee) chairs this week,” Spokesperson Mary Catus said. “Based on those conversations, the President has felt momentum and remains optimistic that we can find a path forward.”

Only the General Assistance reforms included in Mills’ initial supplemental budget proposal have received a public hearing.

House Speaker Ryan Fecteau, D-Brunswick, said in a Wednesday interview on WGAN radio that he has offered a GA proposal to Republicans, but his office would not release that proposal or describe how it’s different from the governor’s.

“I decided to put forward a proposal for their review on the General Assistance topic — not that I necessarily wanted to,” Fecteau said. “Hopefully we can find common ground on the proposal that’s been put before them.”

House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, also declined through a spokesperson to provide details about Fecteau’s proposal or any other ideas that have surfaced since Tuesday to break the stalemate.

“We’ve have been talking with Democrats,” Faulkingham said in a written statement. “House Republicans remain committed to passing a supplemental budget, but it will require Democrats to accept some form of reasonable limits on general assistance.”

Senate Minority Leader Trey Stewart, R-Presque Isle, did not respond to questions about negotiations. On Tuesday, he told reporters he was not going to negotiate with Democrats through the news media, saying “we’re trying to figure it out.”