PORTLAND – All Tom Allan could do as workers laid down bed mats on the linoleum floor of a long hallway in the Preble Street Resource Center on Monday night was wait and hope that the people his agency serves would be able to find their way to their new shelter.

“I’m not exaggerating when I say that someone could die tonight,” said Allan, who is executive director of the Milestone Foundation, an emergency shelter and detox program for alcoholic and drug-addicted adults who are also homeless.

The India Street shelter, which is near Munjoy Hill, was forced to significantly reduce the number of shelter beds it provides by Nov. 1 or face losing its federal Medicaid reimbursements.

As an interim solution, Allan said 41 emergency shelter beds that are usually full every night had to be relocated to the Preble Street Resource Center in downtown Portland. That change took effect Monday night.

Milestone also reduced the number of beds reserved for patients going through detox treatment from 18 to 16 beds.

Allan said a more effective long-term solution will need to be found. In the meantime, the Preble Street Resource Center will provide overnight shelter beds for displaced Milestone clients.

About two weeks ago, Milestone Foundation and Serenity House, both in Portland, and St. Francis Recovery Center in Auburn were informed that they would not qualify for federal Medicaid reimbursements, effective Nov. 1, unless they reduced their number of treatment and shelter beds.

The reduction in federal Medicaid funding is the result of a technical definition that had never been applied to Maine’s private treatment programs. The Centers for Medicaid and Medicare says programs that provide more than 16 beds are Institutions for Mental Disease, a category that doesn’t qualify for federal reimbursement.

The rule has existed for years but has not been applied to these programs until now because it was overlooked. The issue was noticed during a routine state review of Maine’s reimbursement rules last summer.

That left the agencies and the city of Portland scrambling to find a solution.

They decided to house Milestone clients during the day at the city’s Oxford Street shelter — the doors open at 1 p.m. — and to provide them with a place to sleep at Preble Street. But Doug Gardner, the city’s director of Health and Human Services, said it is far from an ideal solution.

“We knew this strategy would not be perfect or sustainable,” Gardner said. “It’s going to be day to day.”

Gardner said the city and the agencies are concerned that many of those served by Milestone will slip through the cracks.

“These folks have been struggling in some instances for years with substance abuse,” Gardner said. “The reality is Milestone serves a group of people who are really struggling.”

Serenity House is a residential treatment center for men in Portland. It froze admission to reduce its number from 33 to 16 beds, according to Executive Director Robert Dawber.

Phasing out that many beds will only place a greater burden on addiction treatment programs that are already strained, Dawber said.

Allan said his clients have trouble staying sober.

“We are the only place in town that will take them in,” he said. “I’m really anxious about what might happen.”

“This,” Allan said, referring to the hallway in Preble Street where his clients will sleep, “is not a good solution.”

Staff Writer Dennis Hoey can be contacted at 791-6365 or at [email protected]

Send questions/comments to the editors.