An Act To Strengthen the State's Ability To Investigate and Prosecute Misuse of Public Benefits
Maine Legislature, Session 125, LD 1888
Committee: Health and Human Services
Sponsors: McCORMICK
Amends: 17-A MRSA §905-C, 22 MRSA §13, 22 MRSA §21, 22 MRSA §23, 22 MRSA §1714-A, 22 MRSA §1714-D, 22 MRSA §3104, 22 MRSA §3811

Legislative Document 
No. 1888 
S.P. 665 
In Senate, March 19, 2012 
An Act To Strengthen the State's Ability To Investigate and 
Prosecute Misuse of Public Benefits 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator McCORMICK of Kennebec.  (GOVERNOR'S BILL) 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  17-A MRSA §905-C is enacted to read: 
§905-C.  Misuse of public benefits instrument 
1.   A person is guilty of misuse of a public benefits instrument if the person 
knowingly: 
A.  Transfers a public benefits instrument without authorization of the agency issuing 
the instrument; or 
B.  Obtains or possesses a public benefits instrument that was obtained without 
authorization of the agency issuing the instrument. 
2.   As used in this section, "public benefits instrument" means electronic benefits 
transfer cards, coupons, vouchers and any other means for distributing benefits from the 
following programs: 
A.  The municipal general assistance program under Title 22, chapter 1161; 
B.  The TANF program under Title 22, chapter 1053-B; 
C.  The statewide food supplement program under Title 22, section 3104; 
D.  The child care subsidies under Title 22, chapter 1052-A; or 
E.  The Women, Infants and Children Special Supplemental Food Program of the 
United States Child Nutrition Act of 1966. 
3.   Misuse of a public benefits instrument is a Class D crime. 
Sec. 2.  22 MRSA §13, sub-§6, ¶B, as amended by PL 2003, c. 688, Pt. C, §6, is 
further amended to read: 
B.  Notwithstanding paragraph A, the department may terminate or suspend the 
participation of a provider in the MaineCare program pursuant to federal regulation 
and state rule.  This authority includes, but is not limited to, provider payment 
suspensions required under section 1714-D. 
Sec. 3.  22 MRSA §21, sub-§4, as enacted by PL 1995, c. 675, §1, is amended to 
read: 
4.  Electronic benefits transfer system or EBT.  "Electronic benefits transfer 
system" or "EBT" means a system for the delivery of benefits to recipients by means of 
credit or debit card services, automated teller machines or, point of sale devices or access 
to online systems for the withdrawal of funds or the processing of a payment for 
merchandise or a service. 
Sec. 4.  22 MRSA §23 is enacted to read: 
§23.  Unauthorized use of electronic benefits transfer system 
1.  Unauthorized spending of benefits.  A recipient may not use the electronic 
benefits transfer system established under section 22 to effect any transaction in: 
A.  A retail establishment where 50% or more of the gross revenue of the 
establishment is derived from the sale of liquor as defined in Title 28-A, section 2, 
subsection 16; 
B.  A gambling facility, as defined in Title 8, section 1001, subsection 16, except that 
use of the electronic benefits transfer system is permitted in any portion of the 
premises of a gambling facility that is set aside separately for the sale primarily of 
staple foods as defined in 7 United State Code, Section 2012(r); or 
C.  A retail establishment that provides adult-oriented entertainment in which 
performers disrobe or perform in an unclothed state for entertainment. 
2.  Rulemaking.  The department shall adopt rules to implement this section.  Rules 
adopted under this subsection are routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A. 
Sec. 5.  22 MRSA §1714-A, sub-§1, ¶C, as enacted by PL 1991, c. 9, Pt. G, §4, 
is amended to read: 
C.  "Former provider" means the person reimbursed by the department for the 
provision of health care services at a nursing home, boarding home or, hospital or 
other provider of health care services prior to its transfer. 
Sec. 6.  22 MRSA §1714-A, sub-§1, ¶¶I and J, as enacted by PL 1991, c. 9, Pt. 
G, §4, are amended to read: 
I.  "Transfer" means any change in the ownership or control of a nursing home, 
boarding home or, hospital or other provider of health care services, including, but 
not limited to, a sale, lease or gift of the land, building or operating entity, that results 
in: 
(1)  The department reimbursing a person other than the former provider for the 
provision of care or services; or 
(2)  The discontinuation of the provision of care or services. 
J.  "Transferee" means any person to whom a nursing home, boarding home or, 
hospital or other provider of health care services is transferred. 
Sec. 7.  22 MRSA §1714-A, sub-§4, ¶¶A and B, as enacted by PL 1991, c. 9, 
Pt. G, §4, are amended to read: 
A.  When a nursing home, boarding home or, hospital or other provider of health care 
services is transferred, the transferee is liable for debts owed to the department by the 
former provider unless by the time of sale: 
(1)  All debts owed by the former provider to the department have been paid, 
except as stated in subparagraph (2); 
(2)  If the indebtedness is the subject of an administrative appeal, an escrow 
account has been created and funded in an amount sufficient to cover the debt as 
claimed by the department; or 
(3)  An interim cost report has: 
(a)  Been filed and an escrow account has been created and funded in an 
amount sufficient to cover any overpayment identified in the report; or 
(b)  Not been filed and an escrow account has been created and funded in an 
amount sufficient to cover 5% of Medicaid reimbursement or cost 
reimbursement for the last fiscal year or $50,000, whichever is less. 
B.  Any person affected by this subsection may request that the department identify 
the amount of any debt owed by a nursing home, boarding home or, hospital or other 
provider of health care services.  When the department receives such a request, it 
shall identify the debt within 30 days.  Failure to identify the amount of a debt when a 
request is made in writing at least 30 days prior to the transfer precludes the 
department from recovering that debt from the transferee. 
Sec. 8.  22 MRSA §1714-A, sub-§4, ¶C, as amended by PL 1991, c. 568, §2, is 
further amended to read: 
C.  The department shall provide written notice of the requirements of this section to 
the transferee in a letter acknowledging receipt of a request for a certificate of need or 
waiver of the certificate of need for a nursing home or hospital transfer or in response 
to a request for an application for a license to operate a boarding home or to provide 
other health care services. 
Sec. 9.  22 MRSA §1714-D is enacted to read: 
§1714-D.  Credible allegations of fraud; provider payment suspensions 
If the department determines that there is a credible allegation of fraud by a provider 
under the MaineCare program, the following procedures apply. 
1.  Suspension of payments.  The department shall suspend payment in whole or in 
part to a MaineCare provider when a suspension is necessary to comply with Section 
6402(h)(2) of the federal Patient Protection and Affordable Care Act of 2010, Public Law 
111-148 and 42 Code of Federal Regulations, Section 455.23. 
2.  Administrative hearing; scope.  A provider may administratively appeal the 
department's decision to suspend payment under subsection 1.  The scope of the 
administrative hearing must be limited to determining whether the department violated 
state or federal law in suspending payments and whether the provider timely 
demonstrated to the department good cause for an exception to the suspension authorized 
by federal law or regulation.  The administrative hearing may not consider the likelihood 
that a fraud has occurred. 
3.  No stay during administrative appeal.  A suspension of payments under 
subsection 1 may not be stayed during an administrative appeal of the department's 
decision to suspend payment. 
4.  Final determination; offset.  Upon a final determination that fraud has occurred 
and that money is owed by the provider to the department, and 31 days after exhaustion 
of all administrative appeals and any judicial review available under Title 5, chapter 375, 
the department may retain and apply as an offset to amounts determined to be owed to the 
department any payments to the provider that were suspended by the department pursuant 
to this section. 
5.  Rules.  The department may adopt emergency rules to implement this section 
without the necessity of demonstrating that immediate adoption is necessary to avoid a 
threat to public health or safety or the general welfare. 
Sec. 10.  22 MRSA §3104, sub-§12, as amended by PL 2009, c. 291, §2, is 
further amended to read: 
12.  Penalty.  The unauthorized issuance, redemption, use, transfer, acquisition, 
alteration or possession of coupons or other program access device, including an 
electronic benefits transfer card, may subject an individual, partnership, corporation or 
other legal entity to prosecution by the State in accordance with Sections 15 (b) and 15 
(c) of the federal Food Stamp Act of 1977 and the federal Food and Nutrition Act of 
2008.  Penalties are in accordance with those outlined in federal law or regulations.  A 
person who knowingly engages in trafficking in benefits as defined by 7 Code of Federal 
Regulations, Section 271.2 commits a Class D crime. 
Sec. 11.  22 MRSA §3811, sub-§3, as amended by PL 1997, c. 466, §27 and 
affected by §28, is further amended to read: 
3.  Overpayment.  "Overpayment" means program benefits that an individual or 
assistance unit receives that exceed the amount of program benefits for which the an 
individual or assistance unit is eligible when the department or a court has determined 
that the benefits were received provided as a result of an intentional program violation, an 
unintentional error by the individual or household or an error by the department.  
"Overpayment" includes any overpayment made before or after the effective date of this 
subsection. 
Sec. 12.  22 MRSA §3811, sub-§4, as amended by PL 1997, c. 683, Pt. C, §9 and 
affected by §10, is further amended to read: 
4.  Program benefits.  "Program benefits" means money payments or food coupons 
issued by the department pursuant to an application for benefits made by an individual to 
Aid to Families with Dependent Children established in former chapter 1053, the food 
stamp program established in chapter 851 or the Temporary Assistance to Needy Families 
program established in chapter 1053-A 1053-B, or money payments or vouchers issued 
by a municipal general assistance program established pursuant to chapter 1161, or 
payments for medical services issued by the department pursuant to the MaineCare 
program established pursuant to chapter 855. 
Sec. 13.  Appropriations and allocations.  The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF 
Office of Family Independence Z020 
Initiative: Establishes 8 Fraud Investigator positions and 2 Office Associate II positions 
and related All Other funded 50% from the General Fund and 50% from Other Special 
Revenue Funds in the Office of Family Independence. 
SUMMARY 
This bill provides successor liability for all health care providers in the MaineCare 
program; prohibits misuse of public benefits instruments; authorizes administrative 
recovery of improperly received municipal general assistance and MaineCare benefits; 
bans the use of electronic benefits transfer system benefits at liquor stores, gambling 
facilities and adult entertainment businesses; criminalizes the trafficking of electronic 
benefits by making the unauthorized transfer or possession of electronic benefits devices 
a Class D crime; conforms Maine law to federal requirements regarding suspension of 
payments to MaineCare providers upon determination of a credible allegation of fraud; 
and adds 8 Fraud Investigator and 2 Office Associate II positions to the Department of 
Health and Human Services, Office of Family Independence. 
GENERAL FUND 
2011-12
2012-13
Personal Services 
$0
$313,011
All Other 
$0
$19,643
GENERAL FUND TOTAL 
$0
$332,654
OTHER SPECIAL REVENUE FUNDS 
2011-12
2012-13
POSITIONS - LEGISLATIVE COUNT 
0.000
10.000
Personal Services 
$0
$313,011
All Other 
$0
$28,837
OTHER SPECIAL REVENUE FUNDS TOTAL 
$0
$341,848