AUGUSTA, ME – Maine’s Dirigo Health Agency has claimed large savings for the fourth year in a row, despite serving fewer members in 2007 than in 2006.
DHA’s board has produced an estimated claims savings of $149.6 million, achieved from health plan, hospital and physician contract negotiations.
The Maine Association of Health Plans says that estimate is not credible. It “far exceeds the limited savings that the state’s health plans have seen from their negotiations and contracts with providers.” In order for savings to be counted in this process, MEAHP officials say, they must achieve savings for the ultimate payer of health insurance premiums – consumers and employers.
A third and final step in the process, scheduled for Sept. 23, is a review by the Superintendent of Insurance, which will form the basis for the 2009 Savings Offset Payment (SOP). Previous SOP hearings have resulted in a lowering of savings estimates.
A Justice of the Maine Supreme Court has argued that the vague and ambiguous language of the statute under which the Dirigo Health Agency Board made this determination “gives the agency license to assess offset payments according to whatever definition of ‘cost savings’ the agency deems appropriate to meet its financial needs.”
According to the MEAHP, the SOP process has been “reduced to a budget balancing exercise.”
The court’s decision, and the history of lowering the SOP each year, represents a clear example of why it is such a conflict of interest to have a board ruling on the funding for its own agency.
“It is no secret that the program has serious financial problems that have forced the DHA to close enrollment.” MEAHP officials said. “They have every incentive to pick an inflated number, particularly as they have no other funding options available.”