An Act To Provide Fair Hearing Procedures in the Department of Human Services
Maine Legislature, Session 121, LD 1356
Committee: Health and Human Services
Sponsors: DAGGETT, BRENNAN, DAVIS, GAGNON, HATCH, LEMONT, STANLEY, FLETCHER
Amends: 22 MRSA §42, 22 MRSA §48, 22 MRSA §13, 22 MRSA §1714-A, 22 MRSA §49

Legislative Document 
No. 1356 
S.P.444 
In Senate, March 13,2003 
An Act To Provide Fair Hearing Procedures in the Department of 
Human Services 
(EMERGENCY) 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
Presented by President DAGGETT of Kennebec. 
Cosponsored by Representative DUG A Y of Cherryfield and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: BRENNAN of Cumberland, DAVIS of Piscataquis, GAGNON of Kennebec, 
HATCH of Somerset, LEMONT of York, STANLEY of Penobscot, Representative: 
FLETCHER of Winslow. 
Printeu nn rt'9dt.'u paper 
Emergency preamble. Whereas, Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, certain current practices of the Department of 
Human 
Services 
in 
its 
zealous 
efforts 
to 
recover 
alleged 
overpayments by the MaineCare program may have the unintended and 
undesirable consequence of forcing legitimate providers of goods 
and 
services 
out 
of 
business 
or 
out 
of 
participation 
in 
MaineCare, thus reducing competition and driving up health care 
costs; and 
Whereas, measures 
to 
ensure fairness 
in the 
review and 
decision-making 
process 
in 
cases 
involving 
such 
alleged 
overpayments can prevent excessive recoveries 
and unnecessary 
business closures by ensuring that sanctions and recoveries are 
commensurate with the magnitude of 
any errors that actually 
occurred, based on a careful review of the facts; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 22 MRSA §42, sub-§7, as enacted by PL 2001, c. 666, 
Pt. C, §1, is amended to read: 
7. 
Appeal process. 
The department shall amend the rules 
governing 
appeals 
of 
informal 
review 
decisions 
of 
Meaieaia 
MaineCare payment and cost report audit and review issues filed 
by service providers e~-BQ~6iB~-~a£~~~~y-~~~~iea~-aBa 
~emeeial-p£~¥a~~~~~-i~&~i~~~~~-se~viees or initiated by 
the department and any other informal review decisions that seek 
to 
impose 
repayment, 
recovery 
or 
recoupment 
obligations 
or 
sanctions or fines on service providers as provided in this 
subsection. 
A. 
The 
department 
shall give 
to 
the 
service provider 
involved in an informal review decision written notice of 
the appeal process and the time period for filing a notice 
of appeal. 
B. 
The department shall contract with a person or persons 
who are not employees of the department for independent, 
impartial hearing officer services. 
C. 
Compensation under the contract may reflect the number 
of appeals on which recommendations are made by the hearing 
officer 
and 
may 
not 
reflect 
the 
substance 
of 
the 
recommendations made by the hearing officer. 
D. 
The hearing officer shall conduct a hearing de novo on 
issues raised in the notice of appeal filed by the service 
provider and shall in a 
timely manner 
render 
a written 
recommendation based on the record and in accordance wi th 
applicable state and federal law, rule and regulation. 
The 
hearing officer shall provide a copy of the recommendation 
to the department and to the service provider along wi th 
notice of the opportunity to submit written comments to the 
commissioner. 
E. 
The 
recommendation 
of 
the hearing officer must 
be 
forwarded to the commissioner for a final decision, based on 
the record, which must include any written comment submitted 
in 
a 
timely 
manner 
by 
the 
service 
provider 
and 
the 
department. 
The 
commissioner 
may 
adopt, 
adopt 
with 
modification or reject the recommendation of the hearing 
officer. The commissioner shall issue a final decision in 
writing, which must include the reasons for any departure 
from the recommendation of the hearing officer and notice of 
the process for appeal pursuant to Title 5, chapter 375, 
subchapter VII 2. 
F. 
The department shall reimburse a service provider for 
attorney's 
and 
related 
consultant 
fees 
incurred 
for 
representation in an appeal of an informal review decision 
of 
any MaineCare 
payment, 
recovery, 
recoupment 
and cost 
report 
and other audit issues, 
if the service provider 
prevails in the appeal. 
If the department considers the fee 
to be unreasonable, the department may petition the Superior 
Court for a determination of the reasonable fee. 
The court 
shall apply the criteria set forth in Maine Bar Rule 3.3(a), 
or its successor. 
A service provider may file a petition in 
the 
course 
of 
proceedings 
for 
judicial 
review 
of 
the 
department's 
final 
decision 
on 
appeal 
from 
an 
informal 
review decision. 
If no appeal is timely taken from the 
department's decision but the department does not find the 
associated 
fee 
reasonable, 
the 
department 
may 
file 
a 
petition for a determination of the fee as an independent 
action. 
The department shall provide funding for contractual services 
under this subsection from within existing resources. 
Sec. A-2. 22 MRSA §48 is enacted to read: 
§48. 
Provider ombudsman 
The 
department shall establish 
a 
provider 
ombudsman 
to 
assist providers in addressing and resolving in a cost-effective 
and 
expeditious 
fashion 
any 
controversies, 
disagreements 
or 
contests 
between 
the 
department 
and 
individual 
providers 
or 
groups of providers. 
The provider ombudsman is authorized to 
receive 
and 
shall 
investigate 
complaints 
and 
concerns 
of 
providers regarding the administration of the MaineCare program 
and payment issues. 
The provider ombudsman has access to the 
commissioner 
and 
may 
bring 
issues 
to 
the 
attention of 
the 
commissioner for prompt resolution. 
The provider ombudsman shall 
inform providers of their rights, entitlements and obligations 
under 
state and federal 
laws 
and shall assist providers 
in 
asserting their legal rights. 
In contested proceedings, 
the 
provider ombudsman may advocate for the provider in circumstances 
where 
the 
provider 
ombudsman 
determines 
this 
advocacy 
is 
necessary or appropriate. 
Sec. A-3. Provider ombudsman; funding. 
The 
Department of 
Human Services shall establish the provider ombudsman pursuant to 
the Maine Revised Statutes, Title 22, section 48 using existing 
resources by assigning these duties to existing personnel in an 
office 
within 
the 
department 
that 
does 
not 
have 
direct 
enforcement or 
reimbursement responsibilities with respect to 
providers. 
PARTB 
Sec. B-1. 22 MRSA §13, sub-§6 is enacted to read: 
6. 
Limitation on actions to recover overpayments. 
The 
department may not impose any sanction or withhold any payments 
from 
a 
service provider in order to recover overpayment for 
services rendered or goods delivered under the MaineCare program 
unless. upon petition to the Superior Court. an order is entered 
allowing interim sanctions upon a showing by the department of a 
substantial likelihood that overpayment or fraud has occurred and 
no harm to the public will occur due to interruption of services. 
Sec. B-2. 22 MRSA §1714-A, sub-§5, as enacted by PL 1991, c. 
568, §4, is repealed. 
PARTC 
Sec. C-l. PL 2001, c. 464, §2 is repealed. 
PARTD 
Sec. D·1. 22 MRSA §42, sub·§7, 1fG is enacted to read: 
G. 
In administrative appeals of informal review decisions 
of MaineCare payment, recovery, recoupment and cost report 
and other audit issues, the department bears the burden of 
proving a violation of rule or other law by a preponderance 
of the evidence. 
If the department finds records of goods 
or services to be insufficient but has made no finding that 
the goods or services affected by the insufficiency were not 
provided or delivered as claimed, 
the department may not 
require total recoupment of MaineCare funds associated with 
the 
affected 
goods 
or 
services. 
In 
cases 
where 
the 
department has 
made 
such a 
finding and asserted such a 
claim, the department must fulfill the burden of proof set 
forth in this paragraph. 
Sec. D·2. 22 MRSA §49 is enacted to read: 
§49. 
Interpretation of rules 
When implementing the law and applying its rules governing 
the MaineCare program, the department shall make determinations 
of deviations from accepta,ble behavior and practices based on 
standard practices in the relevant service provider industry. 
Sec. 
D·3. 
Retroactivity; 
application 
to 
pending 
proceedings. 
Notwithstanding the Maine Revised Statutes, Title 1, section 302, 
this Part applies retroactively to proceedings pending before the 
Commissioner of Human Services on January 1, 2003. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved. 
SUMMARY 
Under 
current 
law, 
the 
Department of 
Human 
Services is 
required to use independent, impartial hearing officers to hear 
appeals of informal review decisions of MaineCare payment and 
cost 
report 
issues 
filed 
by 
providers 
of 
nursing 
facility 
services and medical and remedial private nonmedical institution 
services. 
Part A of this bill extends the requirements of that 
appeal 
process, 
including 
the 
impartial 
hearing 
officer 
requirement, to any other informal review decisions that seek to 
impose repayment, recovery or recoupment obligations or sanctions 
or fines on service providers. 
It also requires the department to pay the legal fees of 
providers who prevail after a hearing on alleged overpayment or 
fraud. 
It also establishes an ombudsman to assist providers with 
compliance and hearings under the MaineCare program. 
Part B of this bill removes existing authority for the 
department to withhold funds owed to service providers in the 
MaineCare 
program 
as 
reimbursement 
for 
overpayments 
to 
the 
provider until after the commissioner has made a final decision 
on 
the overpayments. 
It also prohibits the department 
from 
withholding funds 
owed to service providers in the MaineCare 
program as reimbursement for overpayments by affiliated providers. 
Part C of this bill repeals the delayed effective date of 
Public Law 2001, chapter 464, which prohibits the department from 
paying auditors a 
commission based on 
funds 
received from 
a 
provider after an audit. 
The repeal of the future effective date 
will cause that law to have immediate effect. 
Part D of this bill places the burden of proof on the 
department for showing that a violation of the MaineCare law or 
rules has occurred. 
It also requires the department to use 
evidence of standard industry practices when interpreting the 
laws and rules for the MaineCare program. 
This Part applies 
retroactively to any proceedings pending before the Commissioner 
of Human Services on January 1, 2003.