An Act To Implement the Recommendations of the Commission To Study Long-term Care Facilities
Maine Legislature, Session 126, LD 1776
Committee: Health and Human Services
Amends: 22 MRSA §1708

Legislative Document 
No. 1776 
S.P. 704 
In Senate, February 13, 2014 
An Act To Implement the Recommendations of the Commission To 
Study Long-term Care Facilities 
(EMERGENCY) 
Reported by Senator CRAVEN of Androscoggin for the Joint Standing Committee on 
Health and Human Services pursuant to Joint Rule 353. 
Reference to the Committee on Health and Human Services suggested and ordered printed 
pursuant to Joint Rule 218. 
DAREK M. GRANT 
Secretary of the Senate 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, the people of the State of Maine need and deserve a variety of well-
planned and financially stable long-term care services in home-based and community-
based care settings and in nursing facilities in their communities; and 
Whereas, in order to provide high-quality care to Maine's elderly and disabled 
persons in a dignified and professional manner that is sustainable into the future through a 
spectrum of long-term care services, prompt action is needed to correct chronic 
underfunding and to complete a thoughtful and thorough planning process; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA §1708, sub-§3, as corrected by RR 2001, c. 2, Pt. A, §33 and 
amended by PL 2003, c. 689, Pt. B, §6, is further amended to read: 
3.  Compensation for nursing homes.  A nursing home, as defined under section 
1812-A, or any portion of a hospital or institution operated as a nursing home, when the 
State is liable for payment for care, must be reimbursed at a rate established by the 
Department of Health and Human Services pursuant to this subsection.  The department 
may not establish a so-called "flat rate."  This subsection applies to all funds, including 
federal funds, paid by any agency of the State to a nursing home for patient care.  The 
department shall establish rules concerning reimbursement that: 
A.  Take into account the costs of providing care and services in conformity with 
applicable state and federal laws, rules, regulations and quality and safety standards; 
B.  Are reasonable and adequate to meet the costs incurred by efficiently and 
economically operated facilities; 
C.  Are consistent with federal requirements relative to limits on reimbursement 
under the federal Social Security Act, Title XIX; 
D.  Ensure that any calculation of an occupancy percentage or other basis for 
adjusting the rate of reimbursement for nursing facility services to reduce the amount 
paid in response to a decrease in the number of residents in the facility or the 
percentage of the facility's occupied beds excludes all beds that the facility has 
removed from service for all or part of the relevant fiscal period in accordance with 
section 333.  If the excluded beds are converted to residential care beds or another 
program for which the department provides reimbursement, nothing in this paragraph 
precludes the department from including those beds for purposes of any occupancy 
standard applicable to the residential care or other program pursuant to duly adopted 
rules of the department; and 
E.  Contain an annual inflation adjustment that: 
(1)  Recognizes regional variations in labor costs and the rates of increase in 
labor costs determined pursuant to the principles of reimbursement and 
establishes at least 4 regions for purposes of annual inflation adjustments; and 
(2)  Uses the applicable regional inflation factor as established by a national 
economic research organization selected by the department to adjust costs other 
than labor costs or fixed costs.; and 
Rules adopted pursuant to this paragraph are routine technical rules as defined in 
Title 5, chapter 375, subchapter II-A. 
F.  Establish a nursing facility's base year and increase the rate of reimbursement 
beginning July 1, 2014 and every 2 years thereafter. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. 2.  Amendment of Principles of Reimbursement for Nursing 
Facilities.  The Department of Health and Human Services shall amend Rule Chapter 
101, MaineCare Benefits Manual, Chapter III, Section 67, Principles of Reimbursement 
for Nursing Facilities as follows. 
1.  The rule must be amended in order to establish a nursing facility's base year and to 
increase the rate of reimbursement beginning July 1, 2014 and every 2 years thereafter as 
follows: 
A.  In the direct care cost component in Section 80.3 and all other applicable 
divisions of Section 80.3 in which case mix data, regional wage indices or data 
required for rebasing calculations are referenced by date, the rule must be amended to 
establish a nursing facility's base year by reference to the facility's 2011 audited cost 
report or, if the 2011 audited cost report is not available, by reference to the facility's 
2011 as-filed cost report; to refer to other required rebasing data no older than 2011 
data; and to update a nursing facility's base year every 2 years thereafter; and 
B.  In the routine cost component in Section 80.4 and all other applicable divisions of 
Section 80.4 in which case mix data, regional wage indices or data required for 
rebasing calculations are referenced by date, the rule must be amended to establish a 
nursing facility's base year by reference to the facility's 2011 audited cost report or, if 
the 2011 audited cost report is not available, by reference to the facility's 2011 
as-filed cost report; to refer to other required rebasing data no older than 2011 data; 
and to update a nursing facility's base year every 2 years thereafter. 
2.  The rule must be amended to increase the peer group upper limit on the base year 
case mix and regionally adjusted cost per day for a nursing facility beginning July 1, 2014 
as follows: 
A.  In the direct care cost component in Section 80.3.3.(4)(b), the peer group upper 
limit must be increased to 110% of the median; and 
B.  In the routine cost component in Section 80.5.4, the peer group upper limit must 
be increased to 110% of the median. 
3.  The rule must be amended in the routine cost component in Section 43.4.2(A) to 
eliminate the nursing facility administrative and management cost ceiling, thereby 
allowing all allowable administrative and management costs to be included in allowable 
routine costs for the purposes of rebasing, rate setting and future cost settlements 
beginning July 1, 2014.  
4.  The rule must be amended to include the costs of health insurance for nursing 
facility personnel beginning July 1, 2014 as follows: 
A.  The costs of health insurance for those personnel currently included in the direct 
care cost component in Section 41.1.7(3) must be included in the fixed cost 
component in Section 44 and removed from the direct care cost component for the 
purposes of rebasing and future cost settlements; and 
B.  The costs of health insurance for those personnel currently included in the routine 
cost component in Section 43.4.1(16)(c) must be included in the fixed cost 
component in Section 44 and removed from the routine cost component for the 
purposes of rebasing and future cost settlements.   
5.  The rule must be amended in Section 91.1 to set the inflation adjustment 
cost-of-living percentage change in nursing facility reimbursement on an annual basis in 
accordance with the United States Department of Labor, Bureau of Labor Statistics 
Consumer Price Index medical care services index to be included in budget proposals 
submitted to the Governor and the Legislature beginning with the biennial budget for 
state fiscal years 2015 and 2016. 
6.  The rule must be amended to provide, beginning July 1, 2014, a supplemental 
payment, subject to cost settlement, to a nursing facility whose MaineCare residents 
constitute more than 70% of the nursing facility's total number of residents.  The 
supplemental payment must provide an additional reimbursement of 40¢ per resident per 
day for each 1% this percentage of MaineCare residents is above 70%. 
7.  The rule must be amended in Section 80.3.2 to increase the specific resident 
classification group case mix weight that is attributable to a nursing facility resident who 
is diagnosed with dementia. 
Sec. 3.  Cost-of-care overpayment recoupment.  The Department of Health 
and Human Services shall immediately take all necessary actions to collect cost-of-care 
overpayments to nursing facilities and private nonmedical institutions that were paid 
when the department's computer systems, when providing reimbursement owed by the 
department, failed to take into account the financial contributions paid by residents in the 
nursing facilities and private nonmedical institutions and miscalculated the amounts 
payable under the MaineCare program.  The first $10,000,000 of revenue collected under 
this section in each year of the 2014-2015 biennium must be used to provide funding for 
nursing facility reimbursement under Rule Chapter 101, MaineCare Benefits Manual, 
Chapter III, Section 67, Principles of Reimbursement for Nursing Facilities as amended 
pursuant to this Act. 
Sec. 4.  Cost-of-care overpayment correction.  The Department of Health and 
Human Services shall immediately require that the department's contractor Molina 
Medicaid Solutions make adjustments to the Maine Integrated Health Management 
Solution computer system to correct and discontinue overpayments in the calculation and 
deduction of cost of care in the payment of nursing facilities and private nonmedical 
institutions. 
Sec. 5.  Commission To Continue the Study of Long-term Care Facilities.  
Notwithstanding Joint Rule 353, the Commission To Continue the Study of Long-term 
Care Facilities, referred to in this section as "the commission," is established.  The 
membership, duties and functioning of the commission are subject to the following 
requirements. 
1.  The commission consists of 11 members appointed as follows: 
A.  Two members of the Senate appointed by the President of the Senate, including 
members from each of the 2 parties holding the largest number of seats in the 
Legislature; 
B.  Three members of the House of Representatives appointed by the Speaker of the 
House, including members from each of the 2 parties holding the largest number of 
seats in the Legislature; and 
C.  Six members appointed by the Governor who possess expertise in the subject 
matter of the study, as follows: 
(1) The director of a long-term care ombudsman program described under the 
Maine Revised Statutes, Title 22, section 5106, subsection 11-C; 
(2)  The director of a statewide association representing long-term care facilities 
and one representative of a 2nd association of owners of long-term care facilities; 
(3)  A person who serves as a city manager of a municipality in the State; 
(4)  A person who serves as a director or who is an owner or administrator of a 
nursing facility in the State; and 
(5)  A representative of the Governor's office or the Governor's administration. 
2.  The first-named Senate member is the Senate chair and the first-named House of 
Representatives member is the House chair of the commission.  The chairs of the 
commission are authorized to establish subcommittees to work on the duties listed in 
subsection 4 and to assist the commission.  The subcommittees must be composed of 
members of the commission and interested persons who are not members of the 
commission and who volunteer to serve on the subcommittees without reimbursement.  
Interested persons may include individuals with expertise in acuity-based reimbursement 
systems, a representative of an agency that provides services to the elderly and any other 
persons with experience in nursing facility care. 
3.  All appointments must be made no later than 30 days following the effective date 
of this Act.  The appointing authorities shall notify the Executive Director of the 
Legislative Council once all appointments have been completed.  After appointment of all 
members and after adjournment of the Second Regular Session of the 126th Legislature, 
the chairs shall call and convene the first meeting of the commission.  If 30 days or more 
after the effective date of this Act a majority of but not all appointments have been made, 
the chairs may request authority and the Legislative Council may grant authority for the 
commission to meet and conduct its business. 
4.  The commission shall study the following issues and the feasibility of making 
policy changes to the long-term care system: 
A.  Funding for long-term care facilities, payment methods and the development of a 
pay-for-performance program to encourage and reward strong performance by 
nursing facilities; 
B. Regulatory requirements other than staffing requirements and ratios; 
C.  Collaborative agreements with critical access hospitals for the purpose of sharing 
resources; 
D.  The viability of privately owned facilities in rural communities; 
E.  The impact on rural populations of nursing home closures; and 
F.  Access to nursing facility services statewide. 
5.  The Legislative Council shall provide necessary staffing services to the 
commission. 
6.  The Commissioner of Health and Human Services, the State Auditor and the State 
Budget Officer shall provide information and assistance to the commission as required for 
its duties.  
7.  No later than October 15, 2014, the commission shall submit a report that includes 
its findings and recommendations, including suggested legislation, to the Blue Ribbon 
Commission on Long-term Care established in this Act and to the Joint Standing 
Committee on Health and Human Services.  The joint standing committee of the 
Legislature having jurisdiction over health and human services matters may report out a 
bill regarding the subject matter of the report to the First Regular Session of the 127th 
Legislature. 
Sec. 6.  Blue Ribbon Commission on Long-term Care.  The Blue Ribbon 
Commission on Long-term Care, referred to in this section as "the commission," is 
established to review the State's plan for long-term care and the provision of long-term 
care services in the community and in facilities. 
1.  The commission consists of 13 members appointed as follows: 
A.  Three members of the Senate appointed by the President of the Senate, including 
members from each of the 2 parties holding the largest number of seats in the 
Legislature; 
B.  Four members of the House of Representatives appointed by the Speaker of the 
House, including members from each of the 2 parties holding the largest number of 
seats in the Legislature; and 
C.  Six members appointed by the Governor who possess expertise in the subject 
matter of the study, as follows: 
(1)  The director of a long-term care ombudsman program described under the 
Maine Revised Statutes, Title 22, section 5106, subsection 11-C; 
(2)  The director of a statewide association representing long-term care facilities; 
(3)  A representative of a statewide organization representing consumer-directed 
long-term care services; 
(4)  A representative of a statewide association representing area agencies on 
aging; 
(5)  A representative of a statewide association providing legal services for the 
elderly; and 
(6) A representative of the Governor's office or the Governor's administration. 
2.  The first-named Senate member is the Senate chair and the first-named House of 
Representatives member is the House chair of the commission. 
3.  All appointments must be made no later than 30 days following the effective date 
of this Act.  The appointing authorities shall notify the Executive Director of the 
Legislative Council once all appointments have been completed.  After appointment of all 
members, the chairs shall call and convene the first meeting of the commission.  If 30 
days or more after the effective date of this Act a majority of but not all appointments 
have been made, the chairs may request authority and the Legislative Council may grant 
authority for the commission to meet and conduct its business. 
4.  The commission shall study the feasibility of developing or amending a state plan 
for the provision of long-term care in the community and in facilities and shall: 
A.  Review the existing plans and programs within the Department of Health and 
Human Services for providing long-term care services in home-based and 
community-based care settings and in nursing and residential care facilities; 
B.  Develop a state plan for providing long-term care services in home-based and 
community-based care settings and in nursing and residential care facilities in a 
manner that provides dignity for clients and residents and is financially sustainable 
for individuals and the MaineCare program; and 
C.  Receive and consider recommendations from the Commission To Continue the 
Study of Long-term Care Facilities established in this Act. 
5.  The Legislative Council shall provide necessary staffing services to the 
commission, except as provided in subsection 7. 
6.  No later than November 5, 2014, the commission shall submit a report that 
includes its findings and recommendations, including suggested legislation, to the Joint 
Standing Committee on Health and Human Services.  The joint standing committee of the 
Legislature having jurisdiction over health and human services matters may report out a 
bill regarding the subject matter of the report to the First Regular Session of the 127th 
Legislature. 
7.  The commission may contract for staff and expert consultant services.  The 
commission shall seek funding contributions to fully fund the costs of contracted staff 
and expert consultant services.  All funding is subject to approval by the Legislative 
Council in accordance with its policies.  The commission may not meet unless outside 
funding has been obtained and approval has been granted by the Legislative Council. 
Sec. 7.  Appropriations and allocations.  The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF (FORMERLY DHS) 
Medical Care - Payments to Providers 0147 
Initiative: Deappropriates funds for recovery of overpayments to providers due to errors 
in calculating cost of care and for continued proper application of cost-of-care rules. 
Nursing Facilities 0148 
Initiative: Provides funding for increased reimbursements under the MaineCare program 
for nursing facilities. 
GENERAL FUND 
2013-14
2014-15
All Other 
$0 ($10,000,000)
GENERAL FUND TOTAL 
$0 ($10,000,000)
GENERAL FUND 
2013-14
2014-15
All Other 
$0
$10,000,000
GENERAL FUND TOTAL 
$0
$10,000,000
FEDERAL EXPENDITURES FUND 
2013-14
2014-15
All Other 
$0
$16,176,296
FEDERAL EXPENDITURES FUND TOTAL 
$0
$16,176,296
HEALTH AND HUMAN SERVICES, 
DEPARTMENT OF (FORMERLY DHS) 
DEPARTMENT TOTALS 
2013-14
2014-15
GENERAL FUND 
$0
$0
FEDERAL EXPENDITURES FUND 
$0
$16,176,296
DEPARTMENT TOTAL - ALL FUNDS 
$0
$16,176,296
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill implements the recommendations of the Commission To Study Long-term 
Care Facilities.  The bill requires the Department of Health and Human Services to 
amend its rules governing reimbursement for nursing facilities under the MaineCare 
program with regard to facility base year, peer group upper limits, administrative and 
management cost ceiling, personnel health insurance costs, cost-of-living adjustments, 
supplemental payments for nursing facilities whose MaineCare residents constitute more 
than 70% of their residents and increased acuity for dementia.  The bill requires the 
Department of Health and Human Services to collect amounts overpaid to nursing 
facilities and private nonmedical institutions under the category of cost of care and to 
correct the computer problems that are leading to the overpayments.  The bill requires the 
first $10,000,000 of collected overpayments to be used to fund nursing facility 
reimbursement under the amended rules.  The bill also establishes 2 study commissions: 
the Commission To Continue the Study of Long-term Care Facilities and the Blue Ribbon 
Commission on Long-term Care.  No later than October 15, 2014, the Commission To 
Continue the Study of Long-term Care Facilities is required to submit a report that 
includes its findings and recommendations, including suggested legislation, to the Blue 
Ribbon Commission on Long-term Care and to the Joint Standing Committee on Health 
and Human Services.  The joint standing committee may report out a bill regarding the 
subject matter of the report to the First Regular Session of the 127th Legislature.  No later 
than November 5, 2014, the Blue Ribbon Commission on Long-term Care is required to 
submit a report that includes its findings and recommendations, including suggested 
legislation, to the Joint Standing Committee on Health and Human Services.  The joint 
standing committee may report out a bill regarding the subject matter of the report to the 
and allocations section to provide funds for reimbursement under the MaineCare program 
for nursing facilities.