An Act To Amend the Maine Certificate of Need Act of 2002 for Nursing Facility Projects To Provide Alternative Means To Satisfy MaineCare Neutrality
Maine Legislature, Session 125, LD 0825
Committee: Health and Human Services
Sponsors: MARTIN, EVES, MALABY
Amends: 22 MRSA §333-A, 22 MRSA §334-A

Legislative Document 
No. 825 
H.P. 621 
House of Representatives, March 3, 2011 
An Act To Amend the Maine Certificate of Need Act of 2002 for 
Nursing Facility Projects To Provide Alternative Means To Satisfy 
MaineCare Neutrality 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative MARTIN of Eagle Lake. 
Cosponsored by Representatives: EVES of North Berwick, MALABY of Hancock. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA §333-A, sub-§1, as amended by PL 2009, c. 429, §2, is further 
amended to read: 
1.  Nursing facility MaineCare funding pool.   Except as set forth in subsection 
subsections 1-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 
subsection subsections 1-A and 3 and section 334-A. 
Sec. 2.  22 MRSA §333-A, sub-§1-A is enacted to read: 
1-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 nursing facility MaineCare funding pool. 
Sec. 3.  22 MRSA §334-A, sub-§1, ¶B, as enacted by PL 2009, c. 429, §3, is 
amended to read: 
B.  The petitioner, or one or more nursing facilities or residential care facilities, or 
combinations thereof, under common ownership or control, has have agreed to 
delicense a sufficient number of beds from the total number of currently licensed or 
reserved beds, or is are otherwise reconfiguring its the operations of such facilities, 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 project; or 
Sec. 4.  22 MRSA §334-A, sub-§1, ¶C, as enacted by PL 2009, c. 429, §3, is 
amended to read: 
C.  The petitioner, or one or more nursing facilities or residential care facilities, or 
combinations thereof, under common ownership or control, has have acquired bed 
rights from another nursing facility or facilities or residential care facility or facilities, 
or combinations thereof, that agree to delicense beds or that are ceasing operations or 
otherwise reconfiguring their operations, and that the MaineCare revenues associated 
with these acquired bed rights and related actions are sufficient to cover the 
additional requested MaineCare costs associated with the project. 
Sec. 5.  22 MRSA §334-A, sub-§2, ¶B, as amended by PL 2009, c. 429, §4, is 
further amended to read: 
B.  May be approved by the department upon a showing by the petitioner that the 
petitioner has acquired bed rights from another nursing facility or facilities or another 
residential care facility or facilities, or combinations thereof, that agree to delicense 
beds, or that are ceasing operations or otherwise reconfiguring their operations, and 
that the MaineCare revenues associated with these acquired bed rights and related 
actions are sufficient to cover the additional requested MaineCare costs associated 
with the project. 
Sec. 6.  22 MRSA §334-A, sub-§2-A, as enacted by PL 2009, c. 429, §5, is 
amended to read: 
2-A.  Other types of certificate of need projects.  Other types of nursing facility 
projects that do not add new nursing facility beds to the inventory of nursing facility beds 
within the State and do not propose to relocate beds from one facility to another existing 
or new facility and that propose any renovation, replacement or other actions requiring 
certificate of need review, such as capital expenditures for equipment and renovations 
that are above applicable thresholds, or that propose actions that do not require a 
certificate of need, 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 one or more nursing facilities or residential care facilities, or 
combinations thereof, under common ownership or control, has have agreed to 
delicense a sufficient number of beds from the total number of currently licensed or 
reserved beds, or is are otherwise reconfiguring its the operations of such facilities, 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 project; or 
B.  The petitioner, or one or more nursing facilities or residential care facilities, or 
combinations thereof, under common ownership or control, has have acquired bed 
rights from another nursing facility or facilities or residential care facilities, or 
combinations thereof, that agree to delicense beds or that are ceasing operations or 
otherwise reconfiguring their operations, and that the MaineCare revenues associated 
with these acquired bed rights and related actions are sufficient to 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. 
Sec. 7.  22 MRSA §334-A, sub-§2-B is enacted to read: 
2-B.  Project for transfer of ownership.  The department may approve a nursing 
facility certificate of need application that fulfills other applicable review criteria and 
proposes a transfer of ownership or control as long as: 
A.  The project does 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 
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. 
A certificate of need project described in this subsection is 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. 
SUMMARY 
This bill amends the Maine 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 Services 
under applicable provisions permitting transfers that are MaineCare-neutral in their 
overall impact. 
The bill also amends provisions governing the nursing facility MaineCare funding 
pool to create certain 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 also 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 long as MaineCare neutrality is demonstrated and to permit transfers of MaineCare 
resources between nursing facilities and residential care facilities to satisfy MaineCare 
neutrality 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-cost reimbursement due to 
changes in approved financing or applicable depreciation schedules.