U.S. Markets closed

Maine sells $220M bond to pay back hospitals

AUGUSTA, Maine (AP) -- Maine Gov. Paul LePage said on Tuesday that the state has sold a $220 million liquor operation revenue bond, allowing the state to repay its hospitals about $490 million for unpaid Medicaid services.

The governor's office said that the hospitals are expected to be paid this month. That has been one of LePage's top legislative priorities since taking office in 2011.

LePage applauded the move in a statement on Tuesday, calling it "good news for these employees and their local communities."

The state will pay $183.5 million, which will trigger a federal match of $306.7 million to complete the payments. The bond will be paid off with anticipated revenues from a restructured, 10-year liquor contract. The Maine Municipal Bond Bank plans to settle the bond sale on Thursday, the governor's office said.

Hospital officials have said that not being paid has forced hospitals to put off buying new equipment, restrict travel and hiring, freeze salaries and borrow money for equipment and projects.

LePage signed the bill to restructure the liquor contract in June, after first vetoing the proposal because Democratic leadership had tied it to a plan to expand Medicaid to more Mainers under the federal health care overhaul, which the governor opposed.