An Act To Amend Principles of Reimbursement for Nursing Facilities and for Residential Care Facilities
Maine Legislature, Session 128, LD 0517
Committee: Health and Human Services
Sponsors: MAKER, TUELL, CYRWAY, DIAMOND, LANGLEY, ROSEN, HAMANN, HICKMAN, PIERCE, TURNER
Amends: 22 MRSA §1720, 22 MRSA §7863

Legislative Document
No. 517
S.P. 178
In Senate, February 9, 2017
An Act To Amend Principles of Reimbursement for Nursing 
Facilities and for Residential Care Facilities
Reference to the Committee on Health and Human Services suggested and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator MAKER of Washington.
Cosponsored by Representative TUELL of East Machias and
Senators: CYRWAY of Kennebec, DIAMOND of Cumberland, LANGLEY of Hancock, 
ROSEN of Hancock, Representatives: HAMANN of South Portland, HICKMAN of Winthrop, 
PIERCE of Falmouth, TURNER of Burlington.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA §1720, as enacted by PL 2005, c. 242, §1, is amended to read: 
§1720.  Nursing facility medical director reimbursement 
The department shall include in its calculation of reimbursement for services 
provided by a nursing facility an allowance for the cost of incurred by the facility for a 
medical director in a base year amount not to exceed $10,000, with that amount being 
subject to an annual cost-of-living adjustment. 
Sec. 2.  22 MRSA §7863 is enacted to read: 
§7863.  Reimbursement for residential care facilities; room and board costs 
1.  New construction, acquisitions and renovations.  Notwithstanding any other 
law to the contrary, the department shall permit a capital expenditure by a residential care 
facility for new construction, an acquisition or a renovation that is less than $2,000,000 
and shall provide reimbursement to the facility for the capital expenditure without prior 
approval.  The department shall permit a residential care facility to seek and obtain 
approval for a capital expenditure that exceeds $2,000,000.  The department shall require 
that capital expenditures for energy efficiency improvements, for replacement equipment, 
for information systems, for communications systems and for parking lots and garages be 
permitted without prior approval and not be counted toward the determination of the 
$2,000,000 threshold. 
2.  Extraordinary circumstance allowance.  A residential care facility that 
experiences an unforeseen and uncontrollable event during a year that results in 
unforeseen or uncontrollable increases in expenses may request an adjustment to a 
prospective rate in the form of an extraordinary circumstance allowance.  As used in this 
subsection, "extraordinary circumstance" includes, but is not limited to, an event of a 
catastrophic nature, an increase in minimum wage or social security expenses or 
employee retirement contribution expenses in lieu of social security expenses, a change in 
the number of licensed beds and a change in licensure or accreditation requirements.  If 
the department concludes that an extraordinary circumstance existed, the department shall 
make an adjustment in the form of a supplemental allowance.  The department shall 
determine from the nature of the extraordinary circumstance whether the extraordinary 
circumstance will have a continuing impact and whether the allowance should be 
included in the computation of the base rate for the succeeding year.  Reimbursement to a 
residential care facility for additional costs arising from an extraordinary circumstance 
must be paid via a supplemental payment that is added to the per diem reimbursement 
rate until the department adjusts the direct care price, the routine limit and the personal 
care services limit, as applicable, to fairly and properly reimburse a facility for these 
costs. 
3.  Regulatory compliance costs.  Costs incurred by a residential care facility to 
comply with changes in federal or state laws, regulations and rules and not otherwise 
specified in rules adopted by the department are considered reasonable and necessary 
costs.  Reimbursement for these additional regulatory costs must be paid via a 
supplemental payment that is added to the per diem rate until the department adjusts the 
direct care price, the routine limit and the personal care services limit, as applicable, to 
fairly and properly reimburse facilities for these costs. 
4.  Rulemaking.  The department shall adopt rules to implement this section.  Rules 
adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
SUMMARY 
This bill requires the Department of Health and Human Services to permit capital 
expenditures by residential care facilities for new construction, acquisitions and 
renovations that are less than $2,000,000 and to provide reimbursement without prior 
approval.  It requires the department to provide an extraordinary circumstance allowance 
in permitted reimbursement to residential care facilities.  It provides that costs incurred by 
a residential care facility to comply with federal or state laws, regulations and rules are 
considered reasonable and necessary costs.  It removes from current law on 
reimbursement for services provided by a nursing facility the $10,000 cap for the cost of 
a medical director and instead requires the department to provide in its calculation of 
reimbursement for services the cost incurred by the nursing facility for the cost of a 
medical director.