An Act To Repeal the Maine Certificate of Need Act of 2002
Maine Legislature, Session 126, LD 0162
Committee: Health and Human Services
Sponsors: MALABY, CUSHING, DUNPHY, GUERIN, LIBBY, LOCKMAN, SANDERSON, SIROCKI
Amends: 22 MRSA §1708, 22 MRSA §1714-A, 22 MRSA §1715, 22 MRSA §2061, 24-A MRSA §4203, 24-A MRSA §4204, 24-A MRSA §4225, 24-A MRSA §6203, 24-A MRSA §6226, 24-A MRSA §6951, 35-A MRSA §10122, 38 MRSA §1310-X

Legislative Document 
No. 162 
H.P. 137 
House of Representatives, January 31, 2013 
An Act To Repeal the Maine Certificate of Need Act of 2002 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative MALABY of Hancock. 
Cosponsored by Senator CUSHING of Penobscot and 
Representatives: DUNPHY of Embden, GUERIN of Glenburn, LIBBY of Waterboro, 
LOCKMAN of Amherst, SANDERSON of Chelsea, SIROCKI of Scarborough. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA c. 103-A, as amended, is repealed. 
Sec. 2.  22 MRSA §1708, sub-§3, ¶C, as amended by PL 2001, c. 666, Pt. A, §1 
and affected by Pt. E, §1, is further amended to read: 
C.  Are consistent with federal requirements relative to limits on reimbursement 
under the federal Social Security Act, Title XIX; and 
Sec. 3.  22 MRSA §1708, sub-§3, ¶D, as corrected by RR 2001, c. 2, Pt. A, §33, 
is repealed. 
Sec. 4.  22 MRSA §1714-A, sub-§4, ¶C, as amended by PL 2011, c. 687, §8, is 
further amended to read: 
C.  The department shall provide in a letter 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 the case of 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. 5.  22 MRSA §1715, sub-§1, ¶A, as corrected by RR 2001, c. 2, Pt. A, §34, 
is amended to read: 
A.  Is either a direct provider of major ambulatory service, as defined in section 382, 
subsection 8-A, or is or has been required to obtain a certificate of need under section 
or former section 304 or 304-A; 
Sec. 6.  22 MRSA §2061, sub-§2, as amended by PL 2011, c. 90, Pt. J, §19, is 
further amended to read: 
2.  Review.  Each project for a health care facility has been reviewed and approved to 
the extent required by the agency of the State that serves as the designated planning 
agency of the State or by the Department of Health and Human Services in accordance 
with the provisions of the Maine Certificate of Need Act of 2002, as amended; 
Sec. 7.  24-A MRSA §4203, sub-§1, as amended by PL 2003, c. 510, Pt. A, §19, 
is further amended to read: 
1.    Subject to the Maine Certificate of Need Act of 2002, a A person may apply to 
the superintendent for and obtain a certificate of authority to establish, maintain, own, 
merge with, organize or operate a health maintenance organization in compliance with 
this chapter.  A person may not establish, maintain, own, merge with, organize or operate 
a health maintenance organization in this State either directly as a division or a line of 
business or indirectly through a subsidiary or affiliate, nor sell or offer to sell, or solicit 
offers to purchase or receive advance or periodic consideration in conjunction with, a 
health maintenance organization without obtaining a certificate of authority under this 
chapter. 
Sec. 8.  24-A MRSA §4204, sub-§1, as amended by PL 2003, c. 510, Pt. A, §20 
and c. 689, Pt. B, §6, is repealed. 
Sec. 9.  24-A MRSA §4204, sub-§2-A, as amended by PL 2011, c. 90, Pt. F, §6, 
is further amended to read: 
2-A.     The superintendent shall issue or deny a certificate of authority to any person 
filing an application pursuant to section 4203 within 50 business days of receipt of the 
notice from the Department of Health and Human Services that the applicant has been 
granted a certificate of need or, if a certificate of need is not required, within 50 business 
days of receipt of notice from the Department of Health and Human Services that the 
applicant is in compliance with the requirements of paragraph B. Issuance of a certificate 
of authority shall must be granted upon payment of the application fee prescribed in 
section 4220 if the superintendent is satisfied that the following conditions are met. 
A.  The Commissioner of Health and Human Services certifies that the health 
maintenance organization has received a certificate of need or that a certificate of 
need is not required pursuant to Title 22, chapter 103-A. 
B.  If the The Commissioner of Health and Human Services has determined that a 
certificate of need is not required, the commissioner makes a determination and 
provides a certification to the superintendent that the following requirements have 
been met.  
(4)  The health maintenance organization must establish and maintain procedures 
to ensure that the health care services provided to enrollees are rendered under 
reasonable standards of quality of care consistent with prevailing professionally 
recognized standards of medical practice.  These procedures must include 
mechanisms to ensure availability, accessibility and continuity of care. 
(5)  The health maintenance organization must have an ongoing internal quality 
assurance program to monitor and evaluate its health care services including 
primary and specialist physician services, ancillary and preventive health care 
services across all institutional and noninstitutional settings.  The program must 
include, at a minimum, the following: 
(a)  A written statement of goals and objectives that emphasizes improved 
health outcomes in evaluating the quality of care rendered to enrollees; 
(b)  A written quality assurance plan that describes the following: 
(i)  The health maintenance organization's scope and purpose in quality 
assurance; 
(ii)  The organizational structure responsible for quality assurance 
activities; 
(iii)  Contractual arrangements, in appropriate instances, for delegation of 
quality assurance activities; 
(iv)  Confidentiality policies and procedures; 
(v)  A system of ongoing evaluation activities; 
(vi)  A system of focused evaluation activities; 
(vii)  A system for reviewing and evaluating provider credentials for 
acceptance and performing peer review activities; and 
(viii)  Duties and responsibilities of the designated physician supervising 
the quality assurance activities; 
(c)  A written statement describing the system of ongoing quality assurance 
activities including: 
(i)  Problem assessment, identification, selection and study; 
(ii)  Corrective action, monitoring evaluation and reassessment; and 
(iii)  Interpretation and analysis of patterns of care rendered to individual 
patients by individual providers; 
(d)  A written statement describing the system of focused quality assurance 
activities based on representative samples of the enrolled population that 
identifies the method of topic selection, study, data collection, analysis, 
interpretation and report format; and 
(e)  Written plans for taking appropriate corrective action whenever, as 
determined by the quality assurance program, inappropriate or substandard 
services have been provided or services that should have been furnished have 
not been provided. 
(6)  The health maintenance organization shall record proceedings of formal 
quality assurance program activities and maintain documentation in a 
confidential manner.  Quality assurance program minutes must be available to the 
Commissioner of Health and Human Services. 
(7)  The health maintenance organization shall ensure the use and maintenance of 
an adequate patient record system that facilitates documentation and retrieval of 
clinical information to permit evaluation by the health maintenance organization 
of the continuity and coordination of patient care and the assessment the quality 
of health and medical care provided to enrollees. 
(8)  Enrollee clinical records must be available to the Commissioner of Health 
and Human Services or an authorized designee for examination and review to 
ascertain compliance with this section, or as considered necessary by the 
Commissioner of Health and Human Services. 
(9)  The organization must establish a mechanism for periodic reporting of 
quality assurance program activities to the governing body, providers and 
appropriate organization staff. 
The Commissioner of Health and Human Services shall make the certification 
required by this paragraph within 60 days of the date of the written decision that a 
certificate of need was not required. If the commissioner Commissioner of Health and 
Human Services certifies that the health maintenance organization does not meet all 
of the requirements of this paragraph, the commissioner shall specify in what respects 
the health maintenance organization is deficient. 
C.  The health maintenance organization conforms to the definition under section 
4202-A, subsection 10. 
D.  The health maintenance organization is financially responsible, complies with the 
minimum surplus requirements of section 4204-A and, among other factors, can 
reasonably be expected to meet its obligations to enrollees and prospective enrollees. 
(1)  In a determination of minimum surplus requirements, the following terms 
have the following meanings. 
(a)  "Admitted assets" means assets recognized by the superintendent 
pursuant to section 901-A.  For purposes of this chapter, the asset value is 
that contained in the annual statement of the corporation as of December 31st 
of the year preceding the making of the investment or contained in any 
audited financial report, as defined in section 221-A, of more current origin. 
(b)  "Reserves" means those reserves held by corporations subject to this 
chapter for the protection of subscribers.  For purposes of this chapter, the 
reserve value is that contained in the annual statement of the corporation as 
of December 31st of the preceding year or any audited financial report, as 
defined in section 221-A, of more current origin. 
(2)  In making the determination whether the health maintenance organization is 
financially responsible, the superintendent may also consider: 
(a)  The financial soundness of the health maintenance organization's 
arrangements for health care services and the schedule of charges used; 
(b)  The adequacy of working capital; 
(c)  Any agreement with an insurer, a nonprofit hospital or medical service 
corporation, a government or any other organization for insuring or providing 
the payment of the cost of health care services or the provision for automatic 
applicability of an alternative coverage in the event of discontinuance of the 
plan; 
(d)  Any agreement with providers for the provision of health care services 
that contains a covenant consistent with subsection 6; and 
(e)  Any arrangements for insurance coverage or an adequate plan for self-
insurance to respond to claims for injuries arising out of the furnishing of 
health care services. 
E.  The enrollees are afforded an opportunity to participate in matters of policy and 
operation pursuant to section 4206. 
F.  Nothing in the proposed method of operation, as shown by the information 
submitted pursuant to section 4203 or by independent investigation, is contrary to the 
public interest. 
G.  Any director, officer, employee or partner of a health maintenance organization 
who receives, collects, disburses or invests funds in connection with the activities of 
that organization shall be is responsible for those funds in a fiduciary relationship to 
the organization. 
H.  The health maintenance organization shall maintain in force a fidelity bond or 
fidelity insurance on those employees and officers of the health maintenance 
organization who have duties as described in paragraph G, in an amount not less than 
$250,000 for each health maintenance organization or a maximum of $5,000,000 in 
aggregate maintained on behalf of health maintenance organizations owned by a 
common parent corporation, or such sum as may be prescribed by the superintendent. 
I.  If any agreement, as set forth in paragraph D, subparagraph (2), division (c), is 
made by the health maintenance organization, the entity executing the agreement 
with the health maintenance organization must demonstrate to the superintendent's 
satisfaction that the entity has sufficient unencumbered surplus funds to cover the 
assured payments under the agreement, otherwise the superintendent shall disallow 
the agreement.  In considering approval of such an agreement, the superintendent 
shall consider the entity's record of earnings for the most recent 3 years, the risk 
characteristics of its investments and whether its investments and other assets are 
reasonably liquid and available to make payments for health services. 
K.  The health maintenance organization provides a spectrum of providers and 
services that meet patient demand. 
L.  The health maintenance organization meets the requirements of section 4303, 
subsection 1. 
M.  The health maintenance organization demonstrates a plan for providing services 
for rural and underserved populations and for developing relationships with essential 
community providers within the area of the proposed certificate.  The health 
maintenance organization must make an annual report to the superintendent regarding 
the plan. 
O.  Each health maintenance organization shall provide basic health care services. 
The applicant shall furnish, upon request of the superintendent, any information 
necessary to make any determination required pursuant to this subsection. 
Sec. 10.  24-A MRSA §4225, as amended by PL 1975, c. 293, §4 and enacted by 
c. 503 and amended by PL 2003, c. 689, Pt. B, §7, is further amended to read: 
§4225.  Commissioner of Health and Human Services' authority to contract 
The Commissioner of Health and Human Services, in carrying out his the 
commissioner's obligations under sections 4204, subsection 1, paragraph B, 4215 and 
4216, subsection 1, may contract with qualified persons to make recommendations 
concerning the determinations required to be made by him the commissioner. Such 
recommendations may be accepted in full or in part by the Commissioner of Health and 
Human Services. 
Sec. 11.  24-A MRSA §6203, sub-§1, ¶A, as amended by PL 2003, c. 510, Pt. A, 
§22, is further amended to read: 
A.  The provider has submitted to the department an application for a certificate of 
need, if required under Title 22, section 329, and the department has submitted a 
preliminary report of a recommendation for approval of a certificate of need and the 
provider has applied for any other licenses or permits required prior to operation. 
Sec. 12.  24-A MRSA §6203, sub-§1, ¶G, as enacted by PL 1995, c. 452, §11, is 
amended to read: 
G.  The department has approved the adequacy of all services proposed under the 
continuing care agreement not otherwise reviewed under the certificate of need 
process. 
Sec. 13.  24-A MRSA §6203, sub-§2, as amended by PL 1995, c. 452, §§12 to 
16, is further amended to read: 
2.  Final certificate of authority. The superintendent shall issue a final certificate of 
authority, subject to annual renewal, when:  
A.  The provider has obtained any required certificate of need or other permits or 
licenses required prior to construction of the facility; 
C.  The superintendent is satisfied that the provider has demonstrated that it is 
financially responsible and shall may reasonably be expected to meet its obligations 
to subscribers or prospective subscribers; 
D.    The superintendent has determined that the provider's continuing care agreement 
meets the requirements of section 6206, subsection 3, and the rules promulgated 
adopted in this chapter; and 
G.  The provider certifies to the superintendent either: 
(1) That preliminary continuing care agreements have been entered and deposits 
of not less than 10% of the entrance fee have been received either: 
(a)  From subscribers with respect to 70% of the residential units, including 
names and addresses of the subscribers, for which entrance fees will be 
charged; or 
(b) From subscribers with respect to 70% of the total entrance fees due or 
expected at full occupancy of the community; or 
(2) That preliminary continuing care agreements have been entered and deposits 
of not less than 25% of the entrance fee received from either: 
(a) Subscribers with respect to 60% of the residential units, including names 
and addresses of the subscribers, for which entrance fees will be charged; or 
(b) Subscribers with respect to 60% of the total entrance fees due or expected 
at full occupancy of the community. 
Within 120 days after determining that the application to the superintendent and the 
department is complete, the superintendent shall issue or deny a final certificate of 
authority to the provider, unless a certificate of need is required, in which case the final 
certificate of authority shall be issued or denied in accordance with the certificate of need 
schedule. 
Sec. 14.  24-A MRSA §6203, sub-§6, as amended by PL 2003, c. 155, §1, is 
further amended to read: 
6.  Provision of services to nonresidents.  The final certificate of authority must 
state whether any skilled nursing facility that is part of a life-care community or a 
continuing care retirement community may provide services to persons who have not 
been bona fide residents of the community prior to admission to the skilled nursing 
facility.  If the life-care community or the continuing care retirement community admits 
to its skilled nursing facility only persons who have been bona fide residents of the 
community prior to admission to the skilled nursing facility, then the community is 
exempt from the provisions of Title 22, chapter 103-A, but is subject to the licensing 
provisions of Title 22, chapter 405, and is entitled to only one skilled nursing facility bed 
for every 4 residential units in the community.  Any community exempted under Title 22, 
chapter 103-A rules adopted by the department may admit nonresidents of the community 
to its skilled nursing facility only during the first 3 years of operation.  For purposes of 
this subsection, a "bona fide resident" means a person who has been a resident of the 
community for a period of not less than 180 consecutive days immediately preceding 
admission to the nursing facility or has been a resident of the community for less than 180 
consecutive days but who has been medically admitted to the nursing facility resulting 
from an illness or accident that occurred subsequent to residence in the community.  Any 
community exempted under Title 22, chapter 103-A rules adopted by the department is 
not entitled to and may not seek any reimbursement or financial assistance under the 
MaineCare program from any state or federal agency and, as a consequence, that 
community must continue to provide nursing facility services to any person who has been 
admitted to the facility. 
Notwithstanding this subsection, a life-care community that holds a final certificate of 
authority from the superintendent and that was operational on November 18, 2002 and 
that is barred from seeking reimbursement or financial assistance under the MaineCare 
program from a state or federal agency may continue to admit nonresidents of the 
community to its skilled nursing facility after its first 3 years of operation with the 
approval of the superintendent.  A life-care community that admits nonresidents to its 
skilled nursing facility as permitted under this subsection may continue to admit 
nonresidents after its first 3 years of operation only for such period as approved by the 
superintendent after the superintendent's consideration of the financial impact on the 
life-care community and the impact on the contractual rights of subscribers of the 
community. 
Sec. 15.  24-A MRSA §6226, as amended by PL 2003, c. 510, Pt. A, §23, is 
repealed. 
Sec. 16.  24-A MRSA §6951, sub-§6, as enacted by PL 2003, c. 469, Pt. A, §8, is 
amended to read: 
6.  Technology assessment.  The forum shall conduct technology assessment reviews 
to guide the use and distribution of new technologies in this State. The forum shall make 
recommendations to the certificate of need program under Title 22, chapter 103-A. 
Sec. 17.  35-A MRSA §10122, as enacted by PL 2011, c. 424, Pt. A, §6 and 
affected by Pt. E, §1, is amended to read: 
§10122.  Health care facility program 
The trust shall develop and implement a process to review projects undertaken by 
health care facilities that are directed solely at reducing energy costs through energy 
efficiency, renewable energy technology or smart grid technology and to certify those 
projects that are likely to be cost-effective.  If a project is certified as likely to be 
cost-effective by the trust, the review process serves as an alternative to the certificate of 
need process established pursuant to Title 22, section 329, subsection 3. 
Sec. 18.  38 MRSA §1310-X, sub-§4, ¶A, as amended by PL 2003, c. 551, §17, 
is further amended to read: 
A.  A commercial biomedical waste disposal or treatment facility, if at least 51% of 
the facility is owned by a licensed hospital or hospitals as defined in Title 22, section 
328, subsection 14 or a group of hospitals that are licensed under Title 22 acting 
through a statewide association of Maine hospitals or a wholly owned affiliate of the 
association; and 
SUMMARY 
Under current law, before introducing additional health care services and procedures 
in a market area, a person must apply for and receive a certificate of need from the 
Department of Health and Human Services.  This bill eliminates that requirement.