A decision to revoke cost-of-living increases in reimbursements for Medicaid services this month came as a surprise to nonprofits.

Leaders of nonprofit agencies that provide Medicaid services for disabled people said Wednesday those services are at risk because of a Mills administration decision to revoke a cost-of-living increase set to take effect this month.
The groups say the cost-of-living-adjustment, or COLA, would have amounted to a 2.54% pay raise for workers in a field that is experiencing drastic workforce shortages.
Future cost-of-living increases for Medicaid — or MaineCare in Maine — have not been included in Gov. Janet Mills’ two-year budget proposal, which would potentially mean pay freezes and further cuts to services for disabled people through at least 2027.
The issue is expected to come up at the Legislature’s Appropriations and Financial Affairs Committee meeting on Thursday in Augusta. A December letter to legislative leaders pleading their case was signed by dozens of nonprofit agencies.
Adam Bloom-Paicopolos, executive director of the Alliance for Addiction and Mental Health Services, Maine, which advocates for behavioral health nonprofits, said a 2022 law that mandated a Medicaid rate review every five years and a COLA in the intervening years, gave nonprofits more certainty about what to expect with Medicaid reimbursements.
“This certainly came as a shock to the provider community, because this was the system we had been working under for the past few years,” Bloom-Paicopolos said. “We felt like we were finally gaining some momentum, but retreating from this commitment puts a lot of these critical services in jeopardy.”