An Act Regarding the Creation of Capitated Behavioral Health Pilot Programs
Maine Legislature, Session 124, LD 1433
Committee: Health and Human Services
Sponsors: MILLS, JACKSON, MARRACHE, MITCHELL, SHERMAN, BECK, MARTIN

MAINE STATE LEGISLATURE 
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124th' MAINE LEGISLATURE 
Legislative Document 
No. 
S.P.51 
In Senate, April 7, 2009 
An Act Regarding the Creation of Capitated Behavioral Health Pilot 
Programs 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
Presented by Senator MILLS of Somerset. 
9tfJ(J~ 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by .Senators: JACKSON of Aroostook, MARRACHE of Kennebec, President 
MITCHELL of Kennebec, SHERMAN of Aroostook, Representatives: BECK of Waterville, 
MARTIN of Eagle Lake .. 
·Pnnt ... d un n.'c~ ch.'J Jl;~p"'r 
Beit enacted by the People oftheStafe of Maine as follows: 
Sec. 1. 34-"8 MRS A §3612 is enacted to read: 
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§3612. Capitated behavioral health pilot programs 
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1. Definitions. As used in this section, unless the· context otherwise indicates, the 
following terms have the following meanings. 
A. "Administrative services" means administrative services provided by an insurance 
company or management entity to the network manager, including but not limited to 
billing, practice rrianagement and marketing. 
"Administrative services" does not 
include assumption of fiscal responsibility based on behavioral health services use by 
an eligible resident. 
B. "Behavioral health services" or "services" means services provided by a provider 
licensed by the State to provide mental health or substance abuse treatment and 
services. 
C. 
"Capitated· system" means a system of delivering, managing· and oaying for 
behavioral health services in which payment is based on the mimber of persons 
served for a defined period of time. The rate per person may be adjusted bas.ed on 
actuarial projections. 
. 
D. "Eligible resident" means a resident of Kennebec County, Somerset County or 
Aroostook County, 21 years of age or older, who is eligible for publicly funded 
behavioral health services. 
E. 
"Network" means the participating providers who contract with the network 
manager to provide serVices in a pilot program. 
F. "Network manager" means the entity that, under contract with the department, is 
responsible for developing the network, allocating resources, contracting with 
participating providers and evaluating outcomes. 
G. 
"Participating provider" means a provider who contracts with the network 
manager to provide services in a pilot program. "Participating provider" does not 
include a state institution as defined in section 1001, subsection 8 or a hospital 
licensed by the depaJiment solely for the treatment of mental illness. 
H. "Pilot program" means a program of behavioral health services provided through 
a capitated system established under this section. 
I. "Provider" means an individual or organization licensed by the State.to provide 
behavioral health services·that provides those serVices in Kennebec County, Somerset 
County or Aroostook County. 
.. Establishment of pilot programs. The department shall develop 2 pilot programs 
of behavioral health services provided through a capitated system, one covering eligible 
reSIdents of Aroostook County and one covering eligible residents of Kennebec County . 
and Somerset County, for a period of 3 to 5 years beginning July 1, 2010. The pilot 
programs must improve the. effectiveness and efficiency of behavioral health services and 
maintain consumer choice of provider. The department shall operate the pilot programs 
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through contract with a network manager under standards established by rule by the 
department. 
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3. Reguirements for the pilot programs. A pilot program must provide behavioral 
health services that: 
A~ Meet the State's obligations under the consent decree issued on August 20, 1990 
by the Superior Court, Kennebec County, in Civil Action Doc~et No. 89-88; 
B. Include a core set of services that are necessary, efficient and effective and a 
broader array of services when appropriate; 
. 
C. Reduce the use of expensive treatment options, such as inpatient hospitalization, 
in favor of less intensive, community-based behavioral health services; 
D. Improve access to services in thecounties served; and 
E. As appropriate for eligible residents, include inp·atient services at acute care and 
psychiatric hospitals, 24-hour crisis services, outpatient and community-based 
services and supports and prescription drug coverage. 
4. ·Reguirements for network manager. The network manager must: 
A. Be incorporated as a nonprofit behaviorallrealth management organization, with a 
membership consisting of providers of behavioral health services in the region that 
will be covered by the pilot program, and have an office and primary place of 
business in one of the counties in which services will be provided; 
B. 
Have provided publicly funded services, through the behavioral health 
management organization or through its member providers, in at least one of the 
counties served by the pilot programs prior to being nalTied by the depaltment as 
network manager; and 
C. Be governed by a board that includes consumers, family members of consumers, 
local business people and other community stakeholders who are familiar with the 
health, welfare and social service needs of eligible residents. 
5. 
Duties of network manage... 
The network manager shall operate the pilot 
program in the county or counties covered by the pilot program, 'enter into contracts with 
participating providers, establish access standards for behavioral health services, monitor 
the quality of care, report to the department information on the outcomes of services 
provided to eligible residents and pay participating providers for services provided to 
eligible residents. 
A. 
The network manager is accountable to the pilot program for the quality of 
services delivered to eligible residents based on nationally recognized· quality 
standards. 
B. The network manager is accountable for performance under the pilot program, 
whether the network manager provides all services directly or indirectly, through a 
contract for administrative services with an insurance carrier· or managed care 
company or through a contract for other services provided with another person or 
entity. 
6. Funding. Funding for the pilot programs must equal the amount of appropriated 
General Fund and allocated federal funding spent on behavioral health services, including 
but not limited to MaineCare, for the eligible residents of Kennebec County, Somerset 
County and Aroostook County during state fiscal year 2007-08, including crisis services, 
hospitalization and prescription drug services. Funding for the pilot programs for the· 
entire year at the contracted -rate must be allocated to the network manager at the 
beginning of the contract period to facilitate efficient service implementation and network 
provider reimbursement. 
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.. Rules; exemption. The department shall adopt rules to carry out the purpose of 
this section, including rules to exempt the pilot ·programs from requirements of review, 
limitation and prior authorization that would otherwise apply under the rules of the 
department for publicly funded providers of behavioral health services. Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
8. Support of pilot programs. The department shall support the development of 
new services or programming for the pilot programs through licensing changes or waivers 
if such new services or programming is determined by the department to be effective and 
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'efficient.· 
9. Behavioral Health Pilot Program Oversight Committee. There is established 
the 7-member Behavioral Health Pilot Program Oversight Committee, referred to in 'this 
subsection as "the committee," to review the work of 'the pilot programs on a monthly 
basis. The committee shall review outcomes of the pilot programs on an ongoing basis 
and report to the joint standing committee of the Legislature having jurisdiction over 
health and human serviCes matters on the activities and outcomes of the pilot programs in 
January of each year of the pilot programs. The members are. appointed for the duration 
of the pilot programs. 
A. 
The President of the Senate shall appoint 3 members of the Senate and the 
Speaker of the. House of Representatives shall appoint 4 members of the House of 
Representatives to the committee, giving preference to members of the joint standing 
committee having jurisdiction over health and human services matters. 
B. 
The department shall provide staffing and necessary support services to the 
committee. 
10. Evaluation. The department shall contract for the services of an entity to 
evaluate the operation of the pilot program and the performance of the network manager. 
The evaluating entity must have experience in the evaluation of capitated systems and 
must report to the department and the joint standing committee having jurisdiction over 
health and human services matters byJuly 1,2011 arid annually thereafter for each year 
thatthe pilot program operates. ' 
. SUMMARY 
This bill establishes 2 capitated behavioral health pilot programs, one in Kennebec 
County and Somerset County and one in Aroostook County, to serve eligible adult 
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residents of those counties. The programs must provide an array of behavioral health 
services that meets the State's obligations under the consent decree in Bates v. Harvey, 
Kennebec County Superior Court Civil Action Docket No. 89-88; provide a core set of 
behavioral health services that are necessary, efficient and effective; and reduce the use of 
expensive treatment options, such as inpatient hospitalization, in favor of less intensive, 
community-based behavioral health service. The pilot programs will be overseen by an 
oversight committee consisting of Legislators and evaluated by an entity with experience 
in evaluating capitated behavioral health systems.