An Act To Implement Certain Recommendations of the Commission To Study Maine's Community Hospitals Further amend the bill by striking out all of sections 1 to and inserting in their place the following: Sec. 1. 22 MRSA §8709, sub-§I-A is enacted to read: I-A. Hospitals; standardized accounting template. When filing the financial information required under subsection It a hospital also shall file information using the standardized accounting template published in the report of the Commission to Study Maine's Community Hospitals in February 2005. The hospital shall file this information using an electronic version of the template provided to the hospital by the organization. If in succeeding years the template needs to be modified, the board shall adopt rules specifying the filing requirements. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. Sec. 2. Standardized reporting and voluntary limits to control growth of hospital costs. 1. Voluntary restraint. To control the rate of growth of the costs of hospital services, the Legislature requests that each hospital licensed under the Maine Revised Statutes, Title 22, chapter VOluntarily restrain cost increases and Page l-LR2373(2) COMMITTEE AMENDMENT
Maine Legislature, Session 122, LD 1673
Committee Amendment CA_A_S356 (Senate)
Amends: 22 MRSA §8709

COMMITTEE AMENDMENT A" to S.P. 620, L.D. 1673, Bill, "An 
Act To Implement the Recommendations of the Commission to Study 
Maine's Community Hospitals" 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Implement Certain Recommendations of the Commission To 
Study Maine's Community Hospitals' 
Further amend the bill by striking out all of sections 1 to 
and inserting in their place the following: 
'Sec. 1. 22 MRSA §8709, sub-§I-A is enacted to read: 
I-A. 
Hospitals; 
standardized accounting template. 
When 
filing the financial information required under subsection It a 
hospital 
also 
shall 
file 
information using 
the 
standardized 
accounting template published in the report of the Commission to 
Study Maine's Community Hospitals in February 2005. 
The hospital 
shall file this information using an electronic version of the 
template provided to the hospital by the organization. 
If in 
succeeding years the template needs to be modified, the board 
shall 
adopt rules 
specifying the 
filing 
requirements. 
Rules 
adopted pursuant to this subsection are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 2. Standardized reporting and voluntary limits to control growth 
of hospital costs. 
1. 
Voluntary restraint. 
To control the rate of growth of 
the costs of hospital services, the Legislature requests that 
each hospital licensed under the Maine Revised Statutes, Title 
22, 
chapter 
VOluntarily 
restrain 
cost 
increases 
and 
Page l-LR2373(2) 
COMMITTEE AMENDMENT 
~ .• ~ 
COMMITTEE AMENDMENT ~, to S.P. 620, L.D. 1673 
consolidated operating margins in accordance with this section. 
The targets and methodology apply to each hospital's fiscal year 
beginning on or after July 1, 2005 and remain in effect through 
the end of each hospital's fiscal year beginning on or after July 
1, 2007. 
A. 
Each 
hospital 
is 
asked 
to 
voluntarily 
hold 
its 
consolidated operating margin to no 
more 
than 
3%. 
For 
purposes 
of 
this 
section, 
a 
hospital's 
consolidated 
operating margin is calculated by dividing its consolidated 
operating income by its total consolidated operating revenue. 
B. 
Each hospital is asked to voluntarily restrain its 
increase in its expense per casemix-adjusted inpatient and 
volume-adjusted outpatient discharge to no more than 110% of 
the forecasted increase in the hospital market basket index 
for the coming federal fiscal year, 
as published in the 
Federal Register, when the federal Centers for Medicare and 
Medicaid Services publishes the Medicare program's hospital 
inpatient prospective payment system rates for the coming 
federal fiscal year. 
For purposes of this paragraph, the 
measure 
of 
a 
hospital's 
expense 
per 
casemix-adjusted 
inpatient 
and 
volume-adjusted 
outpatient 
discharge 
is 
calculated by: 
(1) 
Calculating the hospital's total hospital-only 
expenses; 
(2) 
Subtracting 
from 
the 
hospital's 
total 
hospital-only expenses the amount of the hospital's bad 
debt; 
(3) 
Subtracting 
from 
the 
amount 
reached 
in 
subparagraph (2) the hospital taxes paid to the State 
during the hospital's fiscal year; and 
(4) 
Dividing the amount reached in subparagraph (3) by 
the product of: 
(a) 
The number of inpatient discharges, adjusted 
by the all payer case mix index for the hospital; 
and 
(b) 
The ratio of total gross patient service 
revenue to gross inpatient service revenue. 
For 
the purposes of this paragraph, 
a 
hospital's total 
hospital-only expenses include any item that is listed on 
the hospital's Medicare cost report as a subprovider, such 
as a psychiatric unit or rehabilitation unit, and does not 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A to S.P. 620, L.D. 1673 
include nonhospital cost centers shown on the hospital's 
Medicare cost report, such as home health agencies, nursing 
facilities, 
swing 
beds, 
skilled nursing 
facilities 
and 
hospital-owned physician practices. 
For purposes of this 
paragraph, a hospital's bad debt is as defined and reported 
in the hospital's Medicare cost report. 
C. 
By October 1, 2005, the Maine Hospital Association and 
the Governor's Office of Health Policy and Finance shall 
agree on a target for increases in hospitals' expense per 
casemix-adjusted 
inpatient 
discharge. 
Each 
hospital's 
expense 
per 
casemix-adjusted 
inpatient 
discharge 
is 
calculated using the following process: 
(1) 
Each patient's expense per discharge is calculated 
by 
applying 
the 
Medicare 
cost 
report 
ratio 
of 
cost-to-charges for the matching cost centers to the 
charge detail on each patient's discharge abstract as 
reported 
in 
the 
Maine 
Health 
Data 
Organization's 
discharge abstracts; 
(2) 
The hospital's average expense per discharge is 
calculated by adding the costs of all discharges and 
dividing the sum by the total number of discharges; and 
(3) 
The 
hospital's 
expense 
per 
casemix-adjusted 
inpatient discharge is' calculated by adjusting the 
average 
expense 
per 
discharge 
by 
the 
average 
case 
weight for the hospital, using case weights issued by 
the federal Centers for Medicare and Medicaid Services.' 
Further amend the bill by striking out all of sections 17 
and 18 and inserting in their place the following: 
'Sec. 17. Review of legislative proposals. 
During January 2006 
the Joint Standing Committee on Health and Human Services shall 
review 
the 
legislative 
proposals 
contained 
in 
Legislative 
Document 1673 from the l22nd Legislature that were not enacted 
during 2005. 
The committee is authorized to report out a bill to 
the Second Regular Session of the 122nd Legislature regarding the 
proposals and the report of the Commission to Study Maine's 
Community Hospitals. ' 
Further amend the bill by 
nonconsecutive 
consecutively. 
Part 
letter 
relettering 
or 
section 
or renumbering any 
number 
to 
read 
COMMITTEE AMENDMENT 
""-'-
COMMITTEE AMENDMENT .. A'to s.p. 620, L.D. 1673 
SUMMARY 
This amendment is the majority report of the committee. 
The 
amendment 
amends 
the 
prov~s~ons 
regarding 
the 
use 
of 
a 
standardized accounting template for 
information reporting by 
hospitals, amends the voluntary restraints on hospital operating 
margins to apply to consolidated operating margins and amends the 
voluntary restraints on cost increases to refer to 110% of the 
Medicare market basket, 
The amendment requires review in 2006 of 
the proposals in the bill that were not enacted by the joint 
standing committee of the Legislature having jurisdiction over 
health and human services matters. 
The amendment also deletes 
from the bill the provisions related to the Hospital Cooperation 
Act of 1992, the certificate of need hearing process and review 
of certificate of need program staffing in the Department of 
Health and Human Services. 
FISCAL :\OTE REQURED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 06/08/05 ;t;?ac:.. 
LD 1673 
LR2373(02) 
An Act To Implement the Recommendations of the Commission to Study Maine's Community 
Hospitals 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment A, 
Committee: Health and Human Services 
Fiscal Note Required: Yes 
Majority Report 
Fiscal Note 
Minor cost increase - General Fund 
Assumes additional costs to the Governor's Office of Health Policy and Finance, the Department of Health and Human 
Services and the Maine Health Data Organization can be absorbed utilizing existing resources. 
LR2373(2) - Fiscal Note - Page 1 of 1