An Act To Amend the Certificate of Need Act of 2002 for Nursing. Facility Projects Reference to the COIIlIllittee on Health and Human Services suggested and ordered printed.
Maine Legislature, Session 124, LD 1260
Sponsors: MARTIN, MARRACHE, CLARK, HASKELL, WALSH INNES, PRIEST, WHEELER, BRANNIGAN
Amends: 22 MRSA §333-A, 22 MRSA §334-A

MAINE STATE LEGISLATURE 
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124th M 
NE LEGISLATURE 
FIRST REGULAR SESSIOr~-2009 
Legislative Document 
No. 1260 
H.P.879 
House of Representatives, March 31, 2009 . 
An Act To Amend the Certificate of Need Act of 2002 for Nursing. 
Facility Projects 
Reference to the COIIlIllittee on Health and Human Services suggested and ordered printed. 
Presented by Representative MARTIN ofEagJe Lake. 
Cosponsored by Senator MARRACHE of Kennebec and 
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MILLICENT M. MacFARLAND 
Clerk 
Representatives: CAIN o[Orono, CLARK of Millinocket, HASKELL of Portland, WALSH 
INNES of Yarmouth, PRIEST of Brunswick, WHEELER of Kittery, Senators: BRANNIGAN 
of Cumberland, JAC~(SON of Aroosto·ok. 
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Be it enllcted by the People of the State of Maine as follows: 
Sec. 1. 22 MRSA' §329, sub-§6, as enacted by PL 2001, c. 664, §2, is amended to 
read: 
6. Nursing facilities. The obligation by a nursing facility, when related to nursing 
services provided by the nur~ing facility, of any capital expenditures of $510,000 or 
more. 
A certificate of need is not required for a nursing facility to convert beds used for the 
provision of nursing services to beds to be used for the provision of residential care 
services. If such a conversion occurs, MaineCare and other public funds are may not be 
obligated for payment of services provided in the converted beds unless approved by the 
department pursuant to the provisions of sections 333-A and 334-A; 
Sec. 2. 22 MRSA §333-A, sub-§l, as enacted by PL 2007, c. 440, §11, 1S 
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amended to read: 
'1. 
Nursing facility MaineCare funding pool. 
Savings Except as set forth in 
subsections I-A and 3 and section 334-A, 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 
subsections I-A and 3 and section 334-A. subsection 2. 
Sec. 3. 22 MRSA §333-A, sub-§l-A is enacted to read: 
I-A. Transfers between nursing facilities and residential care facilities. Nursing 
,facilities may delicense and sell or transfer beds to residential care facilities, for the 
purpose, of permitting the residential care facilities to add MaineCare funded beds or 
carry out renovation or expansion projects. Such transfers are subject to prior approval of 
the department. Beds and resources transferred pursuant to this subsection are not subject 
to the MaineCare funding pool. 
Sec. 4. 22 MRSA §334-A, as enacted by PL 2007, c. 440, § 13, is repealed and the 
following enacted in its place: 
§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. Such projects may not be grouped for 
competitive review if approved under paragraph B or C. A nursing facility project that 
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proposes to add new beds is subject to review. Any related renovation, replacement or 
other actions may also be subj ect to review if such actions' are above the applicable 
thresholds for review. Such projects may be approved only if: 
A. 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; 
B. The petitioner, or a nursing facility or residential care facility under common 
ownership or control; has agreed to delicense a sufficient number of beds, including 
either nursing facility beds or residential care facility beds, from the total number 0f 
currently licensed or reserved beds, or is otherwise reconfiguring its operations, so 
that the MaineCare savings associated with such actions are sufficient to fully offset 
any incremental MaineCare costs that would otherwise arise from implementation of 
the certificate of need project and, as a result, there are no net incremental MaineCare 
costs arising from implementation of the certificate of need proj ect; or 
C. The petitioner, or a nursing facility or residential care facility under common 
oWllership or control, has acquired bed rights from another facility or facilities, 
including both nursing facilities and residential care facilities, that agree todelicense 
beds or that are ceasing operations and the MaineCare revenues associated with these 
acquired bed rights are sufficient t6 cover the additional requested MaineCare costs 
associated with the project. -
Certificate of need projects described in this subsection are not subject to or limited by 
the nursing facility MaineCare funding pool. 
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, bnt.inStead propose 
to relocate beds from one facility to another existing or new facility:-
A. May also propose renovation, replacement or other actiorisreguiring 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, including either 
nursing facilities and residential care facilities or both, that agtee10rlelicense beds, or 
that are ceasing operations, and that the MaineCare revenues llSSociated with these 
acquired bed rights are sufficient to cover the additional requestcilMaineCare costs 
associated with the project.-
Certificate of need projects described in this subsection are not subject to or limited by 
the nursing facility MaineCare funding pool. 
2-A. -Other types of certificate of need projects. Other typesofnUfsing facility 
projects that do not add new nursing facility beds to the inventory Df:nm:siPgfacility beds 
within the State and do not propose to relocate beds from one facilityJQ~other existing 
or new facility and that propose any renovation, replacement oTD:tbr:r..:actions requiring 
certIficate of need review such as capital expenditures for equipnn:ntJIiJri:r.enov<ltions that 
are above applicable thresholds or that propose actions that do not::rewrl:r:e:acertificate of 
ne'ed, such as the addition of residential care beds to be funded by the MaineCare 
program may be approved by the department upon a showing that: 
A. The petitioner, or a nursing facility or residential care facility under common 
ownership or control, has agreed to delicense a sufficient number of beds, including 
either nursing facility beds or residential care facility beds, from the total number of 
currently licensed or reserved beds, or is otherwise reconfiguring its operations, so 
that the MaineCare savings associated with such actions are sufficient to fully offset 
any incremental MaineCare costs that would otherwise arise from implementation of 
the certificate of need project and, as a result, there are no net incremental MaineCare 
costs arising from .implementation of the certificate of need proj ect; or 
B. The petitioner, or a nursing facility or residential care facility under common 
ownership or control, has acquired bed rights from another facility or facilities, 
including both nursing facilities and residential care facilities, that agree to delicense 
beds, or 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 proj ect. 
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Certificate of need projects described in this subsection are not subject to or limited by 
the nursing facility MaineCare funding pool. 
2-B. Proiects for transfers of ownership. The department may approve nursing 
facility certificate of need applications that propose transfers of ownership or control. as 
long as: 
A. Such projects do not increase MaineCare costs; 
B.. Any increases in MaineCare costs' are approved pursuant to subsection 1, 2 or 
2-A; or 
C. 
Any increases in MaineCare costs are limited to changes in fixed cost 
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reimbursement due either to changes in approved financing or to changes in 
applicable depreciation schedules and the seller satisfied depreciation recapture 
obligations from the sale proceeds. 
Certificate of need proj.ects described in this subsection are not subject to or limited by 
the nursing facility MaineCare funding pool, and any accompanying increases in 
MaineCare costs may be approved by the department as long as the project fulfills all 
other pertinent requirements. 
3. 
Evaluating .costs. 
In evaluating whether a project will increase MaineCare 
expenditures for a nursing facility for the purposes of this sectimi, 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. 
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SUMMARY 
This bill amends the Certificate of Need Act of 2002 governing the conversion of 
nursing facility beds to residential care beds to permit such conversions as long as the 
terms of the conversion are approved by the Department of Health and Human Se<rvices 
under applicable provisions permitting transfers that are MaineCare-neutral in their 
overall impact. 
The bill also amends provisions governing the riursing facility MaineCare funding 
pool to create celiain exceptions to the 'constraints of the pool. A provision is enacted to-
permit the transfers of beds and other. nursing facility resources to residential care 
facilities and to exclude such beds and resources from the pool if prior approval is 
obtained from the department. 
The bill a:lso changes the provisions governing nursing facility projects in several 
respects: 
1. To permit certificate of need approval of different types of nursing facility projects 
as lorig as MaineCare neutrality is demonstrated and to permit transfers of MaineCare 
resources between nursing facilities and residential care facilities to satisfy these 
requirements; 
2. To permit the exchange of bed rights between nursing facilities and residential 
care facilities in order to permit nursing facilities to satisfy MaineCare neutrality 
requirements; 
3. 
To permit nursing facilities to satisfy MaineCare neutrality requirements for 
projects that do not involve relocation of beds from one facility to another or a new 
facility when the entity proposing the changes is .able to satisfy MaineCare neutrality 
requirements by delicensing beds under common ownership or acquiring beds from other 
facilities including residential care facilities; and 
4. To permit approval of nursing facility projects that propose transfers of ownership 
when any increases in MaineCare costs are offset by transfers of bed rights or the 
increase in MaineCare costs is limited to changes in fixed-costs reimbursement due to 
. changes in approved financing or applicabledepreciation sched:ules.