An Act To
Maine Legislature, Session 123, LD 1763
Committee Amendment CA_A_H569 (House)
Amends: 22 MRSA §328, 22 MRSA §329, 22 MRSA §332, 22 MRSA §333, 22 MRSA §333-A, 22 MRSA §334, 22 MRSA §334-A, 22 MRSA §335, 22 MRSA §348, 22 MRSA §350-A

COMMITTEE AMENDMENT" A" to H.P. 1229, L.D. 1763, Bill, "An Act To 
Amend the Maine Certificate of Need Act of 2002" 
Amend the bill by striking out everything after the enacting clause and before the 
emergency clause and inserting the following: 
'Sec. 1. 22 MRSA §328, sub-§18-A is enacted to read: 
IS-A. Nursine facility MaineCare funding pool. 
"Nursing facility MaineCare 
funding pool" means that limit established in accordance with section 333-A for nursing 
facility projects. 
Sec. 2. 22 MRSA §329, sub-§2, as amended by PL 2003, c. 469, Pt. C, §7, is 
repealed. 
Sec. 3. 22 MRSA §329, sub-§2-A is enacted to read: 
2-A. Acquisitions of major medical equipment. Acquisitions of major medical 
equipment. The following provisions apply to acquisitions of major medical equipment. 
A. The cost of all major medical equipment must be declared at fair market value. 
(1) If an entity purchases major medical equipment from an unrelated entity, the 
purchase price is assumed to reflect the fair market value. 
(2) If an entity purchases major medical equipment from a related entity and the 
department finds that the fair market value is greater than the purchase price, the 
department may revise the cost of the major medical equipment to reflect the 
correct fair market value. 
B. 
The following acquisitions of major medical equipment do not require a 
certificate of need: 
(1) Major medical equipment being replaced by the owner; and 
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to ILP. 1229, L.D. 1763 
(2) The use of major medical equipment on a temporary basis in the case of a 
natural disaster, major accident or major medical equipment failure. 
C. All replaced major medical equipment must be removed from service. 
Sec. 4. 22 MRSA §329, sub-§4-A is enacted to read: 
4-A. 
New health care facility. 
The construction, development or other 
establishment of a new health care facility. 
Sec. 5. 22 MRSA §329, sub-§7, ~A, as enacted by PL 2001, c. 664, §2, is 
amended to read: 
A. 
Any proposed use of major medical equipment to serve inpatients of a hospital, 
if the equipment is not located in a health care facility and was acquired without a 
certificate of need, except acquisitions exempt from review under subsection ~ 
3; 
or 
Sec. 6. 22 MRSA §329, sub-§7, ~, as enacted by PL 2001, c. 664, §2, is 
amended to read: 
B. 
If a person adds a health service not subject to review under subsection 4, 
paragraph. A and not subject to reyie>n' uAder subseetioA 4, paFagraph. B at the time it 
was established and not reviewed and approved prior to establishment at the request 
of the applicant, and its actual 3rd fiscal year operating cost exceeds the expenditure 
minimum for annual operating costs in the 3rd fiscal year of operation following 
addition of these services; and 
Sec. 7. 22 MRSA §332, as amended by PL 2001, c. 710, §9, is repealed and the 
following enacted in its place: 
§332. Subsequent review 
1. Subsequent review following approval. When the commissioner has approved 
an application filed unconditionally or subject to conditions pursuant to section 335, 
subsection 8, the commissioner may conduct a subsequent review to ensure compliance 
with any terms or conditions of approval within 3 years after the approved activity is 
undertaken. In this subsequent review, the commissioner may hold a public hearing and 
may consider any material or significant changes in factors or circumstances relied upon 
by the commissioner in approving the application and significant and relevant 
information that either is new or was withheld by the applicant at the time of the process 
under section 335. If, upon review, the commissioner determines that any terms or 
conditions of the approval have not been met, the commissioner may take enforcement 
action consistent with subsection 3 and other applicable provisions of this Act. 
2. 
Subsequent review followine; determination of nonapplicability. 
The 
commissioner may hold a public hearing to determine whether the proponent of the 
expenditure kn:..:.vingly withheld significant and relevant information 
or made any 
material misrepresentations at the time the nonapplicability determination was rendered. 
The commissioner may take enforcement action consistent with the provisions of this Act 
if, upon review, the commissioner determines that: 
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A. At the time the nonapplicability determination was rendered the proponent of the 
expenditure knowingly withheld significant and relevant information or made any 
material misrepresentations; and 
B. If the proponent had provided proper information, a certificate of need would 
have been required for the expenditure or action. 
3. 
Enforcement actions. 
When the commissioner determines. following the 
procedures set forth in subsections I and 2. that the holder of a certificate of need when 
properly required has failed to meet the conditions set forth in the certificate of need 
approval or that a person covered by this Act has improperly obtained a nonapplicability 
ruling. the commissioner may take one or more of the following actions. 
A. The commissioner may. pursuant to section 347. condition the person's license to 
prohibit the unauthorized activity and determine the ongoing conduct of that activity 
to be in violation of the respective chapter under which the person is licensed. A 
person that is subject to a ruling under this paragraph may request, and the 
commissioner shall grant pursuant to the Maine Administrative Procedure Act, a stay 
of the effect of any such determination to condition the person's license to prohibit 
the particular activity pending final agency action. 
B. The commissioner may seek to enjoin the unlawful activity pursuant to section 
349. 
C. 
The commissioner may impose civil penalties against the person pursuant to 
section 350. 
D. The commissioner may, pursuant to section 348, petition the Superior Court to 
withhold prospectively the reimbursement, payment or other financial assistance, 
either directly or indirectly. from a state agency or other 3rd-party payor that is 
directly related to the project or activity that required a certificate of need. 
E. 
In determining the appropriate sanction, the commissioner or the court shall 
consider a range of factors and public interests, as applicable to the circumstances, 
including but not limited to: 
(I) The degree of negligent or intentional conduct; 
(2) The clarity or vagueness of the relevant statute or rule; 
(3) The clarity or vagueness of the prior approval or condition; 
(4) The efforts of the person to maintain compliance; 
(5) Whether the person knowingly withheld significant and relevant information 
or made any material misrepresentations at the time the nonapplicability 
determination was rendered; 
(6) The public interest in maintaining the service; and 
(7) All other proper factors at law and in equity. 
Sec. 8. 22 MRSA §333, sub-§l, as enacted by PL 2001, c. 664, §2, is amended to 
read: 
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... H.P. m9. L.D. 1763 
1. Procedures. A nursing facility that voluntarily reduces the number of its licensed 
beds at any time prior to July 1, 2007, for any reason except to create private rooms may 
convert the beds back and thereby increase the number of nursing facility beds to no more 
than the previously licensed number of nursing facility beds, after obtaining a certificate 
of need in accordance with this section, as long as the nursing facility has been in 
continuous operation and has not been purshased or leased without material change of 
ownership. For purposes of this section and sections 333-A and 334-A. beds voluntarily 
removed from service prior to July 1, 2007 and available to be reinstated under this 
section are referred to as "reserved beds." Reserved beds remain facility property until 
they lapse as provided for in this section or are transferred. To eonyeFt reinstate reserved 
beds book to nursing fasility beds under this subsection, the nursing facility must: 
A. 
Give notice of its iflteflt to preserve sOfl¥ersiofl optiolls to the department the 
number of beds it is reserving no later than 30 days after the effective date of the 
license reduction; tmd 
A-I. Beginning with anniversary dates occurring after July 1, 2007, annually provide 
notice to the department no later than 30 days after the anniversary date of the 
effective date of the license reduction of the nursing facility's intent to retain these 
reserved beds, subject to the time limitations set forth in subsection 2, paragraph B: 
and 
B. 
Obtain a certificate of need to convert beds back under section 335, except that, 
if no construction is required for the conversion of beds back, the application must be 
processed in accordance with subsection 2. 
Sec. 9. 22 MRSA §333, sub-§2, ~, as enacted by PL 2001, c. 664, §2, is 
amended to read: 
B. 
Conversion of beds back under this section must be requested within 4 years of 
the effective date of the license reduction. For good SQHse showfl, the department 
may extend the 4 year period for eonyersion for one additional 4 year period. If the 
nursing facility fails to provide the annual notices required by subsection 1, paragraph 
S, the nursing facility's ability to convert beds back under this section lapses, and the 
beds must be treated as lapsed beds for purposes of this section and sections 333-A 
and 334-A. 
Sec. 10. 22 MRSA §333, sub-§3, as enacted by PL 2001, c. 664, §2, is repealed 
and the following enacted in its place: 
3. Effect on other review proceedin&s. Lapsed beds may not be treated as available 
nursing facility beds for the purpose of evaluating need under section 335. Reserved beds 
must be counted as available nursing facility beds for the purpose of evaluating need 
under section 335 only if: 
A. 
The nursing facility retains the ability to convert the reserved beds back to 
nursing facility use under the terms of this section; 
B. The nursing facility having the reserved beds is located within a reasonable 
distance ofthe population projected to be served by the project under review; and 
C. The nursing facility having the reserved beds is willing to convert them to meet a 
need identified in that project review. 
The department shall inquire of facilities 
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having reserved beds in the area of the State to be served by a proposed project 
before determining whether reserved beds will be counted as available. 
Sec. 11. 22 MRSA §333-A is enacted to read: 
§333-A. Procedures for allowing reallocation of nursing facility capacity 
1. Nursing facility MaineCare funding pool. Savings to the MaineCare program 
as a result of delicensing of nursing facility beds on or after July 1, 2005, including 
savings from lapsed beds but excluding savings from reserved beds, must be credited to 
the nursing facility MaineCare funding pool, which must be maintained by the 
department to provide for the development of new beds or other improvements requiring 
a certificate of need. The balance of the nursing facility MaineCare funding pool, as 
adjusted to reflect current costs consistent with the rules and statutes governing 
reimbursement of nursing facilities, serves as a limit on the MaineCare share of all 
incremental 3rd-year operating costs of nursing facility projects requiring review under 
this chapter, except as set forth in section 334-A, subsection 2. 
2. Procedure. The balance of the nursing facility MaineCare funding pool must be 
used for development of additional nursing facility beds in areas of the State where 
additional beds are needed to meet the community need. The department must assess 
needs throughout the State and issue requests for proposals for the development of 
additional beds in areas where need has been identified by the department. Proposals 
must be evaluated based on consideration of quality of care and cost, and preference must 
be given to existing nursing facilities in the identified need area that may increase 
licensed capacity by adding on to or renovating the existing facility. Projects that exceed 
the review thresholds require a certificate of need, but no additional assessment of need 
will be conducted as part of that process. Except as set forth in section 334-A, subsection 
2, a project requiring certificate of need approval may not increase MaineCare costs 
beyond the total amount appropriated for nursing facility care plus the available balance 
of the nursing facility MaineCare funding pool. 
3. Emergencies. In the event of an emergency, the department may allocate savings 
calculated in accordance with section 2 by the sole source process. 
4. Rulemaking. The department may establish rules regarding the award of pooled 
savings. Rules adopted pursuant to this subsection are routine technical rules as defined 
in Title 5, chapter 375, subchapter 2-A. 
Sec. 12. 22 MRSA §334, as amended by PL 2003, c. 416, §l, is repealed. 
Sec. 13. 22 MRSA §334-A is enacted to read: 
§334-A. Nursing facility projects 
1. 
Projects that expand current bed capacity. Nursing facility projects that 
propose to add new nursing facility beds to the inventory of nursing facility beds within 
the State may be grouped for competitive review purposes consistent with funds available 
from the nursing facility MaineCare funding pool. Except as set forth in subsection 2, a 
nursing facility project that is subject to review and proposes renovation, replacement or 
other actions affecting assets that have not been fully depreciated and that will increase 
MaineCare costs by more than the applicable threshold for review may be approved only 
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if sufficient funds are available from the nursing facility MaineCare funding pool or are 
added to the pool by act of the Legislature, except that the department may approve, 
without available funds from the pool, projects to reopen beds previously reserved by a 
nursing facility through a voluntary reduction pursuant to section 333 if the annual total 
of reopened beds approved does not exceed 100. 
2. Projects to relocate beds. Nursing facility projects that do not add new nursing 
facility beds to the inventory of nursing facility beds within the State, but instead propose 
to relocate beds from one facility to another existing or new facility: 
A. May also propose renovation, replacement or other actions requiring certificate of 
need review; and 
B. May be approved by the department upon a showing by the petitioner that the 
petitioner has acquired bed rights from another facility or facilities that agree to 
delicense beds, Of that are ceasing operations. and that the MaineCare revenues 
associated with these acquired bed rights are sufficient to cover the additional 
requested MaineCare costs associated with the project. 
3. Evaluatine; costs. Beginning with all applications pending on January 1, 2003, in 
evaluating whether a project will increase MaineCare expenditures for a nursing facility 
for the purposes ofthis section. the department shall: 
A. Allow gross square footage per licensed bed of not less than 500 square feet 
unless the applicant specifies a smaller allowance for the project; and 
B. Exclude the projected incremental cost associated with replacement of equipment. 
Sec. 14. 22 MRSA §335, sub-§I,~, as enacted by PL 2003, c. 469, Pt. C, §8, is 
amended to read: 
E. 
Can be funded within the capital investment fund or. in the case of a nursing 
facility, is consistent with the nursing facility MaineCare funding pool and other 
provisions of sections 333-A and 334-A. 
Sec. 15. 22 MRSA §335, sub-§2, as enacted by PL 2001, c. 664, §2, is amended 
to read: 
2. Communications. Except as otherwise provided in this Act, only a person who is 
a full-time employee of the department with responsibilities for the certificate of need 
program, a consultant to the project or a policy expert pursuant to section ill 338 may 
communicate with the commissioner regarding any application for a certificate of need or 
any letter of intent. Nothing in this section limits the authority or obligation of the staff 
of the department with responsibility for the certificate of need program to meet with, or 
otherwise communicate with, any person who is not a department employee and who 
wants to provide information to be considered in connection with an application for a 
certificate of need. 
Sec. 16. 22 MRSA §335, sub-§3, as enacted by PL 2001, c. 664, §2, is amended 
to read: 
3. Limited communications. -A- Except as otherwise provided in this chapter. a 
person who is not a department employee may not communicate with any department 
staff regarding the merits of a certificate of need application except for the purpose of 
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placing that person's views in the application record. 
All communications with 
department staff responsible for the certificate of need program from any person who is 
not a department employee that the department staff reasonably believes is intended to 
influence the analyses relating to or the decision regarding aHy an application for 
certificate of need must be noted by that department staff and that notation must be made 
part of the application record. 
Sec. 17. 22 MRSA §335, sub-§5, as amended by PL 2003, c. 469, Pt. C, §IO, is 
repealed. 
Sec. 18. 22 MRSA §335, sub-§5-A is enacted to read: 
5-A. Record. The record created by the department in the course of its review of an 
application must contain the following: 
A. The letter of intent described in section 337, subsection 1, all other materials 
submitted by the applicant relating to the letter of intent and any written materials 
relating to the letter of intent; 
B. The application and all other materials submitted by the applicant for the purpose 
of making those documents part of the record: 
C. All information generated by or for the department in the course of gathering 
material to assist the commissioner in determining whether the conditions for 
granting an application for a certificate of need have or have not been met. This 
information may include, without limitation, the report of consultants, including 
reports by panels of experts assembled by the department to advise it on the 
application, memoranda of meetings or conversations with any person interested in 
commenting on the application, letters, memoranda and documents from other 
interested agencies of State Government and memoranda describing officially noticed 
facts; 
D. 
Stenographic or electronic recordings of any public hearing held by the 
commissioner or the staff of the department at the direction of the commissioner 
regarding the application; 
E. Stenographic or electronic recording of any public informational meeting held by 
the department pursuant to section 337, subsection 5; 
F. 
Any documents submitted by any person for the purpose of making those 
documents part of the record regarding any application for a certificate of need or for 
the purpose of influencing the outcome of any analyses or decisions regarding an 
application for certificate of need, except documents that have been submitted 
anonymously. Such source-identified documents automatically become part of the 
record upon receipt by the department; 
G. Preliminary and final analyses of the record prepared by the staff; 
H. Except with regard to a project related to nursing facility services, a written 
assessment by the Director of the Maine Center for Disease Control and Prevention 
ofthe impact of the project on the health of Maine citizens; and 
1. 
Except with regard to a project related to nursing facility services, a written 
assessment by the Superintendent of Insurance of the impact of the project on the cost 
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to H.P.IZlO, L.D. 1763 
of insurance in the region and the State. The superintendent may request additional 
information from the applicant for the purpose of reviewing the application. Any 
such request must be transmitted through the department and becomes part of the 
official record. The applicant shall respond to the request within 30 days. Any such 
response must be transmitted through the department and becomes part of the official 
record. The inability of the superintendent to complete the review of the application 
due to the failure of the applicant to respond timely must be noted in the 
superintendent's assessment filed with the department and may be cause for the 
commissioner to delay consideration of the application until the next review cycle or 
to deny approval of the project. 
Sec. 19. 22 MRSA §335, sub-§6, as enacted by PL 2001, c. 664, §2, is amended 
to read: 
6. Maintenance of the record. The record created pursuant to subsection ~ 5-A first 
opens on the day the department fJtll'llishes its Dotiee that an afJfJlieatioD for Ii eertifieate of 
Deed has beeD filed receives a letter of intent. From that day, all of the record is a public 
record, and any person may examine that record and purchase copies of any or all of that 
record during the normal business hours of the department. 
The department must receive public comments and additional information from the 
applicant for a period of 30 days after the public informational meeting held under section 
337, subsection 5, or the public hearing held under section 339, subsection 2, whichever 
is later. The record will then close until public notice that the preliminary staff analysis 
has been made part of the record. 
The record is elosed 1 9 days will reopen for 10 business days following the publication 
that the preliminary staff review is complete and will close 10 business days after a public 
notice of the closing of the record has been published in a newspaper of general 
circulation in Kennebec County, in a newspaper published within the service area of the 
project and on the department's publicly accessible site on the Internet, as long as the 
notice is not published until after the preliminary staff analysis of the application is made 
part of the record. 
The department may also determine to reopen the record in other circumstances that it 
determines to be appropriate' for a limited time to permit submission of additional 
information, as long as the department gives public notice consistent with the provisions 
of this subsection. 
Sec. 20. 22 MRSA §348, as corrected by RR 2001, c. 2, Pt. A, §29, is amended to 
read: 
§348. Withholding of funds 
A health care facility or other provider may be eligible to apply for or receive any 
reimbursement, payment or other financial assistance from any state agency or other 3rd-
party payor, either directly or indirectly, for any capital expenditure or operating costs 
attributable to any project for which a certificate of need is required by this chapter only 
if the certificate of need has been obtained. Reimbursement, payment or other financial 
assistance, either directly or indirectly, from a state agency or other 3rd-party payor may 
be subject to an enforcement action by the commissioner to withhold or deny 
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to H.P. 1229, L.D. 1763 
reimbursement, in whole or in part, with respect to a project granted a certificate of need 
when the commissioner determines that the applicant fails to meet any of the conditions 
set forth in the certificate of need approval in accordance with the procedures set forth in 
section 332. 
For the purposes of this section, the department shall determine the 
eligibility of a facility to receive reimbursement for all projects subject to the provisions 
of this chapter. 
Sec. 21. 22 MRSA §350-A, as reallocated by RR 2001, c. 2, Pt. A, §30, is 
amended to read: 
§350-A. Cost-of-living adjustment 
Every 2 years, beginning January 1,2005, the department shall review the monetary 
figures contained in this chapter. The department shall revise those publish revised 
figures to correspond to changes in the Consumer Price Index medical index by adopting 
rules setting the fie';'!' figures.' 
SUMMARY 
This amendment replaces the bill. It amends the certificate of need law with regard 
to acquisitions of major medical equipment, the funding of new nursing facility beds, 
nursing facility bed banking, subsequent review of certificate of need projects and 
determinations of nonapplicability of certificate of need, the description of what 
constitutes the record in a certificate of need proceeding and the maintenance of the 
record and the authorization of the Department of Health and Human Services to 
withhold funds with regard to a project for which a certificate of need was approved. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 06/08/07 ;;t;?ac. 
LD 1763 
LR 1060(02) 
An Act To Amend the Maine Certificate of Need Act of 2002 
Fiscal Note for Bill as Amended by Committee Amendment ,,/1 J, 
Committee: Health and Human Services 
tr 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
Any additional costs to the Department of Health and Human Services can be absorbed by the department utilizing 
existing budget resources. 
LRI060(02) - Fiscal Note - Page 1 of 1