An Act To Improve MaineCare Nursing Home Reimbursement To Preserve Access and Promote Quality
Maine Legislature, Session 126, LD 0928
Committee: Health and Human Services
Sponsors: MALABY, DUNPHY, SANDERSON, SIROCKI, STUCKEY
Amends: 22 MRSA §1708

Legislative Document 
No. 928 
H.P. 652 
House of Representatives, March 7, 2013 
An Act To Improve MaineCare Nursing Home Reimbursement To 
Preserve Access and Promote Quality 
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 Representatives: DUNPHY of Embden, SANDERSON of Chelsea, SIROCKI 
of Scarborough, STUCKEY of Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA §1708, sub-§3, as corrected by PL 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.; 
Rules adopted pursuant to this paragraph are routine technical rules as defined in 
Title 5, chapter 375, subchapter II-A. 
F.  For nursing home fiscal years beginning on and after July 1, 2013, provide for a 
supplemental payment under the MaineCare program to nursing homes that provide 
services to a high percentage of MaineCare residents as follows: 
(1)  Nursing homes whose MaineCare patient days exceed 70% of total patient 
days, determined on an annual basis, must receive this supplemental MaineCare 
payment; and 
(2)  For each one percent increment above 70%, eligible nursing homes must 
receive a supplemental MaineCare payment of $0.20 per MaineCare patient day; 
and 
G.  For nursing home fiscal years beginning on and after July 1, 2014, implement a 
pay-for-performance program to encourage and reward strong performance by 
nursing homes. 
(1)  Criteria for incentive payment must include both improvement in 
performance and high levels of performance in specified areas, including, but not 
limited to, resident and family satisfaction, resident choices available, clinical 
measures and staffing levels. 
(2)  Payments pursuant to this paragraph must be in addition to amounts 
otherwise provided in accordance with applicable principles of reimbursement, 
and the program must be implemented in a manner that does not result in any 
reduction of the amount that would be paid to any home in the absence of a 
pay-for-performance program. 
(3)  Payments pursuant to this paragraph may not be required to be returned to 
the State if they remain in the possession of a nursing home at the time of a state 
audit. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. 2.  Emergency rules.  Notwithstanding the Maine Revised Statutes, Title 5, 
section 8054, the Department of Health and Human Services may adopt emergency rules 
to implement Title 22, section 1708, subsection 3, paragraph F without the necessity of 
demonstrating that immediate adoption is necessary to avoid a threat to public health or 
safety or the general welfare, if notice is given through a MaineCare provider list and 5 
days or more are allowed for comment prior to adoption of the rules.  The emergency 
rules and subsequent permanent rules must be made effective retroactively to July 1, 
2013. 
Sec. 3.  Appropriations and allocations.  The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF 
Nursing Facilities 0148 
Initiative:  Appropriates state funds and allocates matching federal funds for cost-of-
living increases for MaineCare reimbursement to nursing facilities in the 2014-2015 
biennium. 
FEDERAL EXPENDITURES FUND 
2013-14
2014-15
All Other 
$2,835,000
$2,948,400
FEDERAL EXPENDITURES FUND TOTAL 
$2,835,000
$2,948,400
SUMMARY 
This bill provides supplemental MaineCare payments to nursing homes that serve a 
high percentage of MaineCare residents and establishes a pay-for-performance program 
in nursing homes. 
The Department of Health and Human Services is authorized to adopt emergency 
rules to take effect retroactively to July 1, 2013 for the establishment of the supplemental 
MaineCare payments to nursing homes that serve a high percentage of MaineCare 
residents. 
The bill also appropriates state funds and allocates matching federal funds for cost-
of-living increases for MaineCare reimbursement to nursing facilities in the 2014-2015 
biennium. 
GENERAL FUND 
2013-14
2014-15
All Other 
$1,665,000
$1,731,600
GENERAL FUND TOTAL 
$1,665,000
$1,731,600