An Act To Implement the Recommendations of the Commission To Study Long-term Care Facilities
Maine Legislature, Session 126, LD 1776
Committee Amendment CA_A-SA_B_S559 (Senate)
Amends: 22 MRSA §1714-A

SENATE AMENDMENT" !?:> " to COMMITTEE AMENDMENT "A" to S.P. 704, 
L.D. 1776, Bill, "An Act To Implement the Recommendations of the Commission To 
Study Long-term Care Facilities" 
Amend the amendment by striking out everything after the title and before the 
summary and inserting the following: 
'Amend the bill by striking out everything after the title and before the summary and 
inserting the following: 
'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 
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SENATE AMENDMENT" b" to COMMITTEE AMENDMENT "A" to S.P. 704, L.D. 1776 
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 orthe department; ami 
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 COStS7; and 
R~les adopted purSllaBt 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 every 2 years and increase the rate of 
reimbursement beginning July 1, 2014 and every year thereafter. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. 2. 22 MRSA §1714-A, sub-§9 is enacted to read: 
9. Cost-of-care overpayments. On or before June 30, 2015, the department shall 
collect the total amount of debt arising from cost-of-care overpayments that exceeds by 
$4,000,000 the amount of that debt that had been budgeted for fiscal year 2014-15 as of 
April 15, 2014. To the extent necessary to meet this requirement, the department may 
establish payment terms, modify as otherwise permitted by law existing payment 
agreements to accelerate payment terms and offset current payments in accordance with 
subsection 5. If 7 days' notice and opportunity to comment are provided, the department 
may adopt rules on an emergency basis to modify its implementation of subsection 5 on 
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SENATE AMENDMENT" E)" to COMMITTEE AMENDMENT "A" to S.P. 704, L.D. 1776 
an. emergency basis for purposes of collecting cost-of-care overpayments without making 
the emergency findings otherwise required by Title 5, section 8054, subsection 2. 
Sec. 3. 
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 every 
years and to increase the rate of reimbursement beginning July 1, 2014 and every year 
thereafter as follows: 
lOA. 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 8004 and all other applicable divisions of 
Section 8004 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 80.504, 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 in Sections 91 and 91.1 to provide for ongoing, annual 
rate changes beginning July 1, 2014 to adjust for inflation and to set the inflation 
adjustment cost-of-living percentage change in nursing facility reimbursement each year 
in accordance with the United States Department of Labor, Bureau of Labor Statistics 
Consumer Price Index medical care services index. 
5. 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 
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SENATE AMENDMENT" is'' to COMMITTEE AMENDMENT "An to S.P. 704, L.D. 1776 
supplemental payment must provide an additional reimbursement of 40¢ per resident per 
day for each 1 % this percentage of MaineCare residents is above 70%, except that the 
total supplemental payment must be calculated to avoid to the extent possible paying an 
amount in excess of allowable costs that would be an overpayment upon settlement of the 
facility's cost report. 
6. 
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. 
The rate of reimbursement for nursing facilities that results from amending the rules 
to reflect rebasing the nursing facility's base year pursuant to this section may not result 
for any nursing facility in a rate of reimbursement that is lower than the rate in effect on 
April 1,2014. The department may implement this section by adopting emergency rules. 
If the department provides at least 7 days' notice and opportunity to comment before 
adopting these rules, it is not required to make the findings otherwise required by the 
Maine Revised Statutes, Title 5, section 8054, subsection 2. 
Sec. 4. 
Savings arising from recoveries in excess of projections; 
transitional cap on rate increases. 
1. The Department of Health and Human Services shall continue its best efforts to 
collect all remaining 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. Cost-
of-care overpayments collected in excess of amounts projected in developing and 
reporting budget information to the Legislature or the Governor must be used to fund the 
implementation of section 3 to the extent of funding provided in this Act. 
2. 
If the total amount of debt arising from cost-of-care overpayments that the 
department collects in fiscal year 2014-15 exceeds $13,000,000, the excess must be 
carried over to fiscal year 2015-16 to be expended to provide· additional funding for 
implementation of section 3. 
In fiscal years 2014-15, 2015-16 and 2016-17, the 
Department of Health and Human Services, subject to state plan approval by the United 
States Department of Health and Human Services, Centers for Medicare and Medicaid 
Services, shall limit the actual rate increase provided to the total amount available as a. 
result of the state funds appropriated for nursing home rate increases, including without 
limitation the dollar amount specified in any appropriation provision plus any net amount 
available as a result of increased nursing facility provider tax revenue and available 
. federal funds, minus the amount necessary to fund the supplemental payment provided in 
section 3, subsection 5. In establishing this limit in any year in which it applies, the 
department first shall calculate and publish the rate increases that would result from 
increasing rates pursuant to all of section 3 except for subsection 5 and then grant to all 
facilities a pro rata portion of that increase that does not exceed the limit established in 
this subsection and also grant supplemental payments pursuant to section 3, subsection 5. 
The pro rata methodology must be applied uniformly to all facilities so that each facility 
receives the same percentage of the initially published rate 
increa~es, plus the 
supplemental payment if applicable. 
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SENATE AMENDMENT"~" to COMMITTEE AMENDMENT "A" to S.P. 704, L.D. 1776 
Sec. 5. 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. 6. 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 II-C; 
(2) The director of a statewide association representing long-tenn care facilities 
and one representative of a 2nd association of owners of long-tenn care facilities; 
(3) A person who serves as a city manager of a mUJlicipality 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 subcOlmnittees 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 adj oumment 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 
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SENATE AMENDMENT" 'e)' to COMMITTEE AMENDMENT "A" to S.P. 704, L.D. 1776 
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 infonnation and assistance to the cOlmnission 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 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. 7. Bimonthly report. Beginning in July 2014 and ending in June 2016, the 
Department of Health and Human Services shall report bimonthly to the joint standing 
committee of the Legislature having jurisdiction over appropriations and financial affairs 
on the department's efforts to establish and collect the debt arising from cost-of-care 
overpayments pursuant to the Maine Revised Statutes, Title 22, section 1714-A, 
subsection 9. 
Sec. 8. 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 that are in 
excess of the amounts currently budgeted for in the MaineCare program for fiscal year 
2014-15. 
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GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
Nursing Facilities 0148 
2013-14 
$0 
$0 
2014-15 
($4,000,000) 
($4,000,000) 
Initiative: Provides one-time funding for increased reimbursements under the MaineCare 
program for nursing facilities. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
Nursing Facilities 0148 
2013-14 
$0 
$0 
2013-14 
$0 
$0 
Initiative: Provides one-time funds for increased nursing home costs. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
Nursing Facilities 0148 
2013-14 
$0 
$0 
2013-14 
$0 
$0 
2014-15 
$4,520,000 
$4,520,000 
2014-15 
$7,311,686 
$7,311,686 
2014-15 
$189,840 
$189,840 
2014-15 
$307,091 
$307,091 
Initiative: Adjusts funds to reflect additional nursing home provider tax revenue. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
2013-14 
$0 
$0 
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2014-15 
($709,901 ) 
($709,901) 
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SENATE AMENDMENT "6" to COMMITTEE AMENDMENT "A" to S.P. 704, L.D. 1776 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
HEALTH AND HUMAN SERVICES, 
DEPARTMENT OF (FORMERLY DHS) 
DEPARTMENT TOTALS 
GENERAL FUND 
FEDERAL EXPENDITURES FUND 
OTHER SPECIAL REVENUE FUNDS 
DEPARTMENTTOTAL-ALLFUNDS 
2013-14 
$0 
$0 
2013-14 
$0 
$0 
$0 
$0 
2014-15 
$709,901 
$709,901 
2014-15 
($61) 
$7,618,777 
$709,901 
$8,328,617 
Emergency clause. 
In view of the emergency cited in the preamble, this 
legislation takes effect when approved.' , 
SU~ARY 
This amendment strikes the committee amendment. 
This amendment incorporates the substance of the bill as amended by Committee 
Amendment" A," but this amendment removes the provisions that require the Department 
of Health and Human Services to amend rules governing principles of reimbursement for 
nursing facilities as they relate to the inclusion of the costs of health insurance for nursing 
facility personnel. It provides funding for the first year of the rate provisions of the bill 
based on collections of cost-of-care overpayments in excess of amounts projected to be 
saved in developing and reporting budget information to the Legislature or the Governor. 
It caps the actual rate increases to be provided in each of the next 3 fiscal years based on 
the amount appropriated by the Legislature to fund those increases. These savings are 
expected to provide $4,000,000 in General Fund savings in fiscal year 2014-15. This 
amendment removes the Blue Ribbon Commission on Long-term Care established in the 
bill. 
This amendment replaces the appropriations and allocations section in the 
committee amendment. 
This amendment also requires the department to carry over any debts collected in 
fiscal year 2014-15 in excess of $13,000,000 to fiscal year 2015-16 to provide additional 
funding. 
Finally, this amendment requires the department to report bimonthly to the joint 
standing committee of the Legislature having jurisdiction over appropriations and 
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financial affairs on the department's efforts to collect the debt arising from cost-of-care 
overpayments. 
FISCAL NOTE RE~QU1RED 
~(:eh~ / 
SPONSO~ 
_______________ 
~~~~~~!~~~~~~-= __ 
(Senator HILL) 
COUNTY: York 
SENATE AMENDMENT 
Approved: 04117 114 
~ac. 
LD 1776 
LR 2744(10) 
An Act To Implement the Recommendations of the Commission To Study Long-term Care Facilities 
Fiscal Note for Senate Amendment "5' to Committee Amendment "A" 
Sponsor: Sen. Hill of York 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Federal Expenditures Fund 
Other Special Revenue Funds 
Revenue 
Other Special Revenue Funds 
Legislative Cost/Study 
Fiscal Note Required: Yes 
Fiscal Note 
Legislative Cost/Study 
FY 2013-14 
$0 
$0 
$0 
$0 
$0 
FY 2014-15 
($12,056,918) 
($12,056,918) 
($15,677,903) 
($1,460,833) 
($1,460,833) 
Projections 
FY 2015-16 
($12,056,857) 
($12,056,857) 
($23,296,680) 
($2,170,734) 
($2,170,734) 
Projections 
FY 2016-17 
($12,053,857) 
($12,053,857) 
($23,296,680) 
($2,170,734) 
($2,170,734) 
This amendment removes the Blue Ribbon Commission on Long-term Care from the bill. The Blue Ribbon 
Commission had projected costs of $1,250 in fiscal year 2013-14 and $2,000 in fiscal year 2014-15. The Blue Ribbon 
Commission was authorized to seek outside funding for staffing and expert consultant services and could not meet 
unless these funds are raised and approved by the Legislative Council. 
Fiscal Detail and Notes 
This fiscal note reflects the incremental impact of this amendment compared to the Committee Amendment. The 
amended bill provides one-time appropriations totaling $4,709,840 in fiscal year 2014-15 in the Nursing Facilities 
program in the Department of Health and Human Services (DHHS) for increased MaineCare payments to nursing 
facilities and for adjustments to funding to reflect increased nursing home tax collections. The additional $709,901 in 
nursing home provider taxes that would be collected as a result of the increased payments are reflected in adjustments 
to appropriations and allocations. 
LR2744(10) - Fiscal Note - Page 1 of2 
The amended bill also includes a one-time deappropriation of $4 million in fiscal year 2014-15 in the Medical Care-
Payments to Providers program for recovery of overpayments to providers due to errors in calculating cost-of-care and 
for continued proper application of cost-of-care rules. DHHS has indicated it had cost-of-care collections of $1 0.4 
million in fiscal year 2012-13 and expects to recover $13.9 million in fiscal year 2013-14 and $9.0 million in fiscal 
year 2014-15. DHHS has also indicated these recoveries have been included in their MaineCare shortfall forecast 
used to prepare the 2014-2015 supplemental budget request. Accordingly, additional recoveries or savings above 
these amounts would be necessary to meet the $4 million deappropriation. 
LR2744(lO) - Fiscal Note - Page 2 of 2