An Act To Preserve Access to Nursing Home Care by Correcting Chronic Shortfalls in MaineCare Reimbursement
Maine Legislature, Session 126, LD 1595
Committee: Health and Human Services
Sponsors: FARNSWORTH, PATRICK, CHIPMAN, GRAHAM, GRANT, KUSIAK, MORIARTY, PRINGLE, VEROW, CRAVEN
Amends: 22 MRSA §1708

Legislative Document 
No. 1595 
H.P. 1166 
House of Representatives, December 30, 2013 
An Act To Preserve Access to Nursing Home Care by Correcting 
Chronic Shortfalls in MaineCare Reimbursement 
(EMERGENCY) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Clerk of the House on December 23, 2013.  Referred to the Committee on 
Health and Human Services pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint 
Rule 401. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative FARNSWORTH of Portland. 
Cosponsored by Senator PATRICK of Oxford and 
Representatives: CHIPMAN of Portland, GRAHAM of North Yarmouth, GRANT of Gardiner, 
KUSIAK of Fairfield, MORIARTY of Cumberland, PRINGLE of Windham, VEROW of 
Brewer, Senator: CRAVEN of Androscoggin. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, nursing homes rely primarily on reimbursement by the MaineCare 
program to cover their costs of operation, because most nursing home residents are 
MaineCare recipients; and 
Whereas, for many years, the allowable operating costs of services provided to 
MaineCare recipients by nursing homes as determined by the Department of Health and 
Human Services through the review of cost reports have greatly exceeded the amount 
paid by the MaineCare program for the services provided by those nursing homes, 
resulting in massive, cumulative shortfalls in funding; and 
Whereas, these funding shortfalls are having a severe impact on the ability of 
nursing homes to continue delivering services, especially in rural areas where MaineCare 
utilization is especially high; and 
Whereas, it is essential to remedy immediately the continued annual shortfall of 
MaineCare payments below MaineCare allowable costs in order to preserve access to 
high-quality nursing home care for those extremely frail, vulnerable individuals who need 
such care; 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.; 
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 or after July 1, 2014, provide for an 
increase in rates of reimbursement sufficient to ensure that statewide payments for 
MaineCare-covered nursing home services are equal to the MaineCare portion of 
aggregate allowable costs of all nursing homes enrolled as MaineCare providers, as 
determined in audited cost reports for each nursing home's fiscal year ending in 2012; 
G.  For nursing home fiscal years beginning on or after July 1, 2014, implement a 
pay-for-performance program, developed in accordance with this paragraph, to 
encourage and reward strong performance by nursing homes. 
(1)  Criteria for incentive payments 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 in excess of $1,000,000 annually must 
be in addition to the aggregate amount specified in paragraph F as adjusted for 
annual inflation pursuant to paragraph E, and the program must be implemented 
in a manner that does not result in any reduction of the amount that would have 
been paid to any nursing home in the absence of a pay-for-performance program, 
prior to implementation of the increase provided in paragraph F. 
(3)  Payments pursuant to this paragraph are not subject to cost report audit and 
may not be recouped by the MaineCare program on the ground that such 
payments, when added to other MaineCare payments, cause total MaineCare 
reimbursement to exceed MaineCare allowable costs; and 
H.  For nursing home fiscal years beginning on or after July 1, 2014, provide for a 
supplemental payment under the MaineCare program in the amount of 20¢ per 
MaineCare patient day to a nursing home for each 1% increment that the nursing 
home's annual MaineCare patient days exceed 70% of its total patient days. 
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, paragraphs F and H 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 to apply retroactively 
to July 1, 2014. 
Sec. 3.  Appropriations and allocations.  The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF (FORMERLY DHS) 
Nursing Facilities 0148 
Initiative:  Appropriates state funds and allocates matching federal funds for an increase 
for MaineCare reimbursement to nursing facilities sufficient to cause statewide 
reimbursement to equal aggregate MaineCare allowable costs of all nursing facilities as 
determined by the cost reports of those facilities for their fiscal years ending in 2012. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill provides for an increase in MaineCare payments to nursing homes to address 
a chronic shortfall between audited MaineCare allowable costs and payments for those 
costs; implements a pay-for-performance program to reward strong performance by 
nursing homes; and provides for a supplemental payment for facilities at which a high 
percentage of patients are MaineCare patients.  
FEDERAL EXPENDITURES FUND 
2013-14
2014-15
All Other 
$0
$20,000,000
FEDERAL EXPENDITURES FUND TOTAL 
$0
$20,000,000
GENERAL FUND 
2013-14
2014-15
All Other 
$0
$10,000,000
GENERAL FUND TOTAL 
$0
$10,000,000
This bill authorizes the Department of Health and Human Services to adopt 
emergency rules to take effect retroactively to July 1, 2014 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 this 
increase in MaineCare reimbursement to nursing facilities in the 2014-2015 biennium.