Mainers urge $1 million stabilization fund and faster rate review to stop children's residential care closures
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Summary
Providers, hospitals and advocates told lawmakers a statewide crisis in children's residential care is forcing kids into ERs and out‑of‑state placements. LD 2125 would create a $1,000,000 emergency stabilization fund and expedite a rate determination for children's residential care; witnesses cited extensive bed losses, long ED stays, and provider operating deficits.
Representative Julie McCabe presented LD 2125 as an emergency measure to sustain access to children's residential care facilities (CRCFs), proposing an emergency rate review and a $1,000,000 stabilization fund to prevent imminent closures while the Department of Health and Human Services completes a rate determination.
"Over the past 2 decades, countless providers and with them, hundreds of children's residential beds have shuttered due to financial challenges," McCabe told the committee, adding that "in the past year alone, 100 beds were closed" and that "currently, 67 Maine children live in 7 other states." She said only about 130 licensed beds remain in state and that providers are unable to staff programs under current reimbursement.
Multiple provider and hospital witnesses detailed operational strain and financial losses. Adam Bloom Pikopoulos (Alliance for Addiction and Mental Health Services) urged prioritizing children's residential care in DHHS's 2026 rate schedule and called for a $1,000,000 emergency fund to prevent closures while rate changes are implemented. Sweetser's chief financial officer, John McAnuff, told the committee Sweetser's breakeven treatment rate is about $780 plus roughly $51 in room and board — about $830 per day — while current reimbursement is lower; Sweetser reported operating losses of about $2.4 million over three years and has closed facilities as a result.
Clinicians and program directors described children languishing in emergency departments for months or being sent out of state, sometimes hundreds of miles from their families, and urged legislative action to stabilize providers and expedite rate setting. Providers gave examples of program closures, high staff turnover and rule changes that reduced billable days. Several witnesses asked that the stabilization fund be flexible and administered by the department to meet short‑term needs such as covering staffing costs, bed holds, or other local operational shortfalls.
Committee members discussed downstream costs and asked the department and providers for data on out‑of‑state placements and fiscal impacts so the work session can evaluate tradeoffs. The committee closed the public hearing and requested updated rate and cost information for the work session.