An Act To Amend the Laws Governing Reimbursement of Nursing Facilities and Nursing Home Admission Contracts
Maine Legislature, Session 122, LD 1483
Committee: Health and Human Services
Sponsors: MARTIN, ROSEN, BURNS, CAMPBELL, GROSE, MILLER, WALCOTT
Amends: 22 MRSA §1826

Legislative Document 
No. 1483 
S.P.509 
In Senate, March 24, 2005 
An Act To Amend the Laws Governing Reimbursement of Nursing 
Facilities and Nursing Home Admission Contracts 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
Presented by Senator MARTIN of Aroostook. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senator: ROSEN of Hancock, Representatives: BURNS of Berwick, 
CAMPBELL of Newfield, GROSE of Woolwich, MILLER of Somerville, WALCOTT of 
Lewiston. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 22 MRSA §§1720 and 1721 are enacted to read: 
§1720. 
Return on equity for nursing facilities and private 
nonmedical institutions 
A nursing facility, 
as defined in section 1812-A or 
a~ 
portion of a 
hospital or institution operating as 
a 
nursing 
facility, 
is entitled to 
reimbursement 
through the MaineCare 
program 
to 
provide 
a 
return 
on 
equity capital. 
A private 
nonmedical institution also is enti tled to reimbursement through 
the MaineCare program to provide a return on equity capital. 
For 
proprietary providers, 
this 
return on equity must 
provide 
a 
reasonable return on equity capital invested and used in the 
provision of resident care and is entitled to be reimbursed as a 
fixed cost. 
The 
amount 
on 
an 
annual basis 
for proprietary 
providers must be a rate equal to the one-year Uni ted States 
Treasury bill rate plus 1%. 
For nonprofit providers, the return 
on equity must be 1/2 of the rate applicable to proprietary 
nursing facilities. 
The department may adopt rules to implement 
this section. 
Rules adopted pursuant to this section are routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
These rules must restore pertinent provisions of former 
MaineCare rules regarding return on equity, modified to reflect 
the rates set forth in this section. 
§1721. 
Nursing facility medical director reimbursement 
The 
department 
shall 
include 
in 
its 
calculation 
of 
reimbursement for services provided by a nursing facility under 
section 1720 an allowance for the cost of a medical director i~ 
base year amount not to exceed $10,000, with such amount being 
subject to an annual cost-of-living adjustment. 
Sec. 2. 22 MRSA §1826. sub-§2, ~~G and I, as enacted by PL 
1985, c. 291, §1, are amended to read: 
G. 
No contract or agreement may require the resident to 
authorize the facility or its staff to manage, 
hold or 
otherwise control the income or other assets of a resident L 
except 
that 
a 
facility 
may 
require 
a 
resident or 
the 
resident's legal representative, including, but not limited 
to, a guardian, conservator, power of attorney, responsible 
party or agent, to enter into and comply with contracts or 
agreements 
that reasonably ensure 
timely payment of 
the 
resident's financial obligations to the facility. 
Thes~ 
provisions may establish a 
duty to apply the resident's 
financial resources in a reasonable and financially prudent 
manner, giving highest priority to paying for the nursing 
facility's services. 
In circumstances when timely payment 
has 
not 
been 
made 
to 
the 
facility. 
the 
resident 
or 
resident's legal representative may be obligated to: 
(1) 
Pay directly to the facility the resident's income 
or other assets in an 
amount sufficient to ensure 
payment of all financial Obligations to the facility 
and to carry out payment through direct deposit or 
electronic transfer means; 
(2) 
Designate the facility as the representative payee 
for Social Security payments or other income sources; 
(3) 
Otherwise 
apply 
the 
resident~s 
resources 
to 
fulfill the resident's obligations; or 
(4) 
Restore to the facility any financial resources of 
the resident that the resident's legal representative 
has improperly diverted to other purposes. 
I. 
No contract or agreement may contain a provision wRieR 
that provides for the payment of 
atteFRey6~ attorney's fees 
or any other cost of collecting payments from the residentL 
except that attorney's 
fees 
and costs 
may 
be 
collected 
against any agent under a power of attorney who breaches the 
agent's fiduciary duty as set forth in Title l8-A. section 
5-508. 
SUMMARY 
This bill provides that a nursing facility or a private 
nonmedical institution is entitled to reimbursement through the 
MaineCare program to provide a 
return on equity capital. 
It 
requires the Department of Health and Human Services to include 
in its calculation of 
reimbursement for 
services provided by 
nursing 
facilities 
an 
allowance 
for 
the 
cost 
of 
a 
medical 
director. 
It allows a nursing facility to enter into a contract 
with 
a 
resident 
or 
a 
resident's 
legal 
representative 
that 
provides that payment of the nursing facility's services is the 
highest priority for the application of a resident's financial 
resources. 
It provides that if timely payment has not been made 
to 
the 
nursing 
facility, 
the 
resident 
or 
resident's 
legal 
representative may be obligated to pay the resident's income or 
other assets directly to the nursing facility, including through 
direct deposit or electronic transfer means; 
to designate the 
nursing facility as the representative payee for Social Security 
or other payments; to otherwise apply the resident's resources t,-
fulfill the resident's obligations; or to pay to the nursing 
facility money 
that has 
been 
improperly diverted. 
The bill 
allows a nursing facility to collect attorney's fees and costs 
from an agent under a power of attorney who breaches that agent's 
fiduciary duty.