An Act To Stabilize and Strengthen the MaineCare Program
Maine Legislature, Session 122, LD 1448
Committee: Taxation
Sponsors: PINGREE, MAYO, BRAUTIGAM, CRAVEN, DUDLEY, FAIRCLOTH, MILLER, WALCOTT, WEBSTER
Amends: 36 MRSA §4365, 36 MRSA §4365-E, 36 MRSA §4365-F, 36 MRSA §4366-A, 36 MRSA §4366-D, 22 MRSA §3174-G, 22 MRSA §3174-H

Legislative Document 
No. 1448 
H.P.1012 
House of Representatives, March 22, 2005 
An Act To Stabilize and Strengthen the MaineCare Program 
(EMERGENCY) 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative PINGREE of North Haven. 
Cosponsored by Senator MAYO of Sagadahoc and 
7Jl~ 
/J1.71!d£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BRAUTIGAM of Falmouth, CRAVEN of Lewiston, DUDLEY of Portland, 
FAIRCLOTH of Bangor, MILLER of Somerville, WALCOTT of Lewiston, WEBSTER of 
Freeport. 
Printed on recycled paper 
Emergency preamble. Whereas, acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, an increase in the cigarette tax is needed to 
provide revenue to stabilize the MaineCare program by October 15, 
2005; and 
Whereas, increasing the cigarette tax by October 15, 
2005 
can be accomplished only if this Act takes effect upon approval; 
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. 36 MRSA §4365, as amended by PL 2003, c. 705, §6, 
is further amended to read: 
§4365. Rate of tax 
A tax is imposed on all cigarettes imported into this State 
or held in this State by any person for sale at the rate of 47 22 
mills for each cigarette. 
Payment of the tax is evidenced by the 
affixing of stamps to the packages containing the cigarettes. 
Sec. A-2. 36 MRSA §4365-E, as enacted by PL 2001, c. 439, Pte 
SSSS, §2, is repealed. 
Sec. A-3. 36 MRSA §4365-F is enacted to read: 
§4365 F. 
Application of cigarette tax rate increase effective 
October 15. 2005 
The following provisions apply to cigarettes held for resale 
on October 15, 2005. 
1. 
Stamped rate. 
Cigarettes stamped at the rate of 47 
mills per cigarette and held for resale after October 14, 2005 
are subject to tax at the rate of 97 mills per cigarette. 
2. 
Liability. 
A person possessing cigarettes for resale is 
liable for the difference between the tax rate of 97 mills per 
cigarette and the tax rate of 47 mills per cigarette in effect 
Page l-LRI954(1) 
• 
before October 15, 2005. 
Stamps indicating payment of the tax 
imposed by this section must be affixed to all packages of 
cigarettes held for resale as of October 15, 2005, except that 
cigarettes held in vending machines 
as of that date do not 
require that stamp. 
3. 
Vending machines. 
Notwithstanding any other provision 
of this chapter, it is presumed that all cigarette vending 
machines are filled to capacity on October 15, 2005 and that the 
tax imposed by this section must be reported on that basis. 
A 
credit against this inventory tax must be allowed for cigarettes 
stamped at the rate of 97 mills per cigarette placed in vending 
machines before October 15, 2005. 
4. 
Pcument. 
Payment of the tax imposed by this section 
must be made to the State Tax Assessor by January 1, 
2006, 
accompanied by forms prescribed by the assessor. 
Sec. A-4. 36 MRSA §4366-A, sub-§2, 1[1[B and C, as enacted by PL 
2001, c. 439, Pt. SSSS, §3, are amended to read: 
read: 
B. 
For stamps at the face value of 47 mills sold prior to 
July 1, 2002, 2.16%; aRe 
C. 
For stamps at the face value of 47 mills sold on or 
after July 1, 2002, 2.03%TL 
Sec. A-5. 36 MRSA §4366-A, sub-§2, 1[1[D and E are enacted to 
D. 
For stamps at the face value of 97 mills sold prior to 
July 1, 2005, 1.62%; and 
E. 
For stamps at the face value of 97 mills sold on or 
after October 15, 2005, 1.52%. 
Sec. A-6. 36 MRSA §4366-D, as enacted by PL 2001, c. 450, 
Pt. D, §l, is repealed. 
Sec. A-7. Effective date. 
This Part takes effect October 15, 
2005. 
PARTB 
Sec. B-1. 22 MRSA §3174-GG is enacted to read: 
§3174-GG. 
MaineCare Stabilization Fund 
1. 
Fund established. 
The MaineCare Stabilization Fund, 
referred to in this chapter as "the fund," is established as an 
Other Special Revenue fund for the purposes specified in this 
chapter. 
2. 
Sources of fund. 
The State Controller shall credit to 
the fund: 
A. 
Reyenues attributable to 50 mills for each cigarette 
taxed pursuant to Title 36, section 4365 F: 
B. 
Reyenues 
received 
by 
the 
State 
from 
financial 
settlements or judgments entered into or ordered beginning 
October 
15, 
2005 
on 
lawsuits 
related to 
the 
MaineCare 
program or the elderly low-cost drug program under section 
to the extent possible under the terms of the settlement 
or judgment; 
C. 
Revenues collected as a result of procedures adopted by 
the department on October 15, 2005 to ensure the collection 
of the full value of rebates owed to the department on 
injectable prescription 
drugs 
that are 
provided in 
the 
office of a physician or in another health care facility and 
that are paid for by the MaineCare or elderly low cost drug 
program; 
Do 
Funds distributed to the State under Title XXI of the 
United States Social Security Act 
as 
unexpended federal 
State Children's Health Insurance Program funds: 
E. 
Amounts recovered from or saved as a result of payment 
by the United States Veterans' Administration under section 
3174-HH, subsection 2; 
Fo 
Money from any other source, whether public or private, 
designated for deposit into or credited to the fund; and 
Go 
Interest earned or other investment income on balances 
in the fund. 
3. 
Honlapsing. 
Any unexpended balances in the fund may not 
lapse but must be carried forward. 
4. 
Fund purposes. 
Allocations from the fund must prevent 
any loss of services or increased cost of services to a MaineCare 
member or a person receiving benefits under the elderly low-cost 
drug program under section 254 that would otherwise result from 
insufficient General 
Fund appropriations, 
insufficient federal 
matching funds or any other shortage of funds, changes in federal 
or state law, rule or policy or the implementation of the federal 
• 
... 
Medicare Prescription Drug, 
Improvement. 
and Modernization Act 
of 2003. 
5. 
Report b.y Treasurer of State. 
The Treasurer of State 
shall report at least annually on the fund on or before the 2nd 
Friday 
in 
Noyember 
to 
the 
joint standing 
committee 
of 
the 
Legislature haying jurisdiction over appropriations and financial 
affairs 
and 
the 
joint standing committee of the Legislature 
having jurisdiction over health and human services matters. 
The 
report must summarize the status of and activity in the fund. 
Sec. B-2. Rebates on injectable drugs administered in office. 
The 
Department of Health and Human Services shall adopt rules by 
October 15, 2005 that ensure the collection of the full value of 
rebates owed to the department on injectable prescription drugs 
that are provided in the office of a physician or in another 
health care facility and that are paid for by the MaineCare 
program under the Maine Revised Statutes, Title 22, chapter 855 
or the elderly low-cost drug program under Title 22, 
section 
254. 
Rules 
adopted 
pursuant 
to 
this 
section 
are 
routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-11.. 
PARTC 
Sec. C-l. Medicare billing. 
By October 15, 2005 the Department 
of Health and Human Services shall contract for services to 
recover payments from the federal Medicare program for health 
care 
services 
that 
would 
otherwise 
be 
paid 
for 
under 
the 
MaineCare 
program 
for 
persons 
who 
are 
eligible 
under 
both 
programs. 
The contractor is authorized to submit requests for 
payment and pursue claims and appeals on behalf of the Department 
of Health and Human Services, Bureau of Medical Services and 
dually eligible MaineCare 
members 
for 
health care 
services, 
including, but not limited to, skilled nursing facility care and 
home health care. 
Sec. C-2. Coordination of benefits. 
The Department of Health 
and Human Services shall coordinate benefits among the MaineCare 
program under the Maine Revised Statutes, Title 22, chapter 855, 
the elderly low-cost drug program under Title 22, section 254, 
the Medicare program under 42 United States Code, Section 1395 et 
seq. and the federal Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003. 
In providing this coordination, the 
Department of Health and Human Services shall: 
A. 
Maximize federal funding available through the federal 
Medicaid program and the federal Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003; 
B. 
Coordinate eligibility for the elderly low-cost drug 
program with eligibility for the federal Medicare program to 
ensure that persons eligible for the elderly low-cost drug 
program who are eligible for Medicare Part D benefits do not 
incur any loss of benefits as 
compared to other persons 
receiving benefits under the elderly low-cost drug program 
or cost sharing above what they would be required to pay 
under the elderly low-cost drug program; and 
C. 
Coordinate eligibility for the MaineCare program with 
eligibility for the federal Medicare program to ensure that 
MaineCare 
members 
who 
are eligible 
for 
Medicare 
Part 
D 
benefits do not incur any loss of benefits as compared to 
other MaineCare members or cost sharing above what 
they 
would 
otherwise 
be 
required 
to 
pay 
in 
the 
MaineCare 
program. 
Sec. C-3. Interest on delinquent rebates. 
By October 15, 
2005 
the 
Department 
of 
Health 
and 
Human 
Services 
shall 
adopt 
procedures to ensure the assessment and collection wi thin the 
MaineCare program under the Maine Revised Statutes, Title 22, 
chapter 855 and the elderly low-cost drug program under Title 22, 
section 254 of an appropriate rate of interest on drug rebate 
amounts that are late in payment to the department 
from 
the 
responsible manufacturer of prescription drugs. 
PARTD 
Sec. D-l. 22 MRSA §3174-HH is enacted to read: 
§3174-HH. Maximization of veterans' benefits 
The department shall conduct a review of 
benefits available 
to veterans and their spouses and dependents and shall adopt 
procedures 
to 
provide 
information 
to 
potentially 
eligible 
veterans 
and 
their 
spouses 
and 
dependents 
and 
to 
maximize 
veterans' benefits. 
The department shall undertake the following 
initiatives. 
1. 
Determination of possible eligibility. 
The department 
shall determine the possible eligibility for federally funded 
health benefits of veterans, their spouses and dependents who are 
applicants for or members in the MaineCare program under this 
chapter or who are applicants for or who receive benefits under 
the elderly low cost drug program under section 254. For those 
veterans and their spouses and dependents whom the department 
determines to be possibly eligible for federally funded health 
benefits, 
the 
department 
shall 
provide 
information 
on 
those 
• 
( 
benefits. 
The 
department 
shall 
provide 
information 
on 
eligibility for federal Veterans' Aid and Attendance Benefits or 
Improved Pensions and shall provide assistance in applying for 
benefits to veterans, their spouses and dependents who live in 
long term care facilities or who reside at home but require the 
daily assistance of another person to live independently. 
2. 
RecQye~. 
When benefits have 
been provided by the 
department under the MaineCare program under this chapter or the 
elderly low-cost drug program under section 254 for which the 
United States Veterans' Administration is or may be liable, the 
commissioner shall pursue 
recovery 
under section 14 of 
any 
amounts owed or potentially owed to the department. 
Sec. D-2. Medication administration rules. 
By January 1, 2006 
the Department of Health and 
Human 
Services shall determine 
whether 
department 
rules 
regarding 
the 
dispensing 
and 
administration of medication in long-term care facilities should 
be amended for persons living in those facilities who receive 
benefits under the MaineCare program under the Maine Revised 
Statutes, Title 22, 
chapter 855 and who are eligible for or 
receive 
benefits 
for 
veterans, 
their 
spouses 
or 
their 
dependents. 
If department rules are to be adopted or amended to 
facilitate 
the 
dispensing 
and 
administration 
of 
medication 
provided through the United States Veterans' Administration, the 
department shall adopt or amend those rules by April 1, 2006. 
Rules 
adopted pursuant to this section are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Emergency clause. 
preamble, 
this 
Act 
otherwise indicated. 
In view of 
takes 
effect 
the emergency cited in 
when 
approved, 
except 
SUMMARY 
the 
as 
Part A of this bill increases the tax on cigarettes by $1 
per pack beginning October 15, 2005. 
Part 
B establishes the MaineCare Stabilization Fund, 
an 
Other Special Revenue fund, to prevent the loss of services or 
increased costs of services under the MaineCare program under the 
Maine Revised Statutes, Title 22, 
chapter 855 or the elderly 
low-cost drug program under Title 22, section 254. Part B also 
requires the collection of the full amount owed to the Department 
of Health and 
Human Services of rebates on injectable drugs 
administered in a health care facility. 
Part C requires the Department of Health and Human Services 
to contract for services to maximize Medicare billing, requires 
coordination of benefits 
among 
the Medicare 
program 
and 
the 
MaineCare program and the elderly low-cost drug program. 
Part C 
also requires the adoption of procedures to ensure the collection 
of interest on late drug rebate payments to the Department of 
Health and Human Services. 
Part D contains provisions to maximize federal veterans' 
benefits, including reviews of eligibility by the Department of 
Health and Human Services, recovery of amounts owed for veterans' 
care and adoption or amendment of rules regarding administration 
of medication to veterans in long-term care facilities. 
,