An Act To Clarify and Amend MaineCare Reimbursement Provisions for Nursing and Residential Care Facilities
Maine Legislature, Session 129, LD 1758
Committee: Health and Human Services
Sponsors: JACKSON
Amends: 22 MRSA §1708

Legislative Document
No. 1758
S.P. 588
In Senate, May 21, 2019
An Act To Clarify and Amend MaineCare Reimbursement 
Provisions for Nursing and Residential Care Facilities
(EMERGENCY)
Reference to the Committee on Health and Human Services suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by President JACKSON of Aroostook.
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 90-day period may not terminate until after the beginning of the next 
fiscal year; and
Whereas, certain expenditures and modifications of policy set forth in this 
legislation affect obligations and expenses incident to the operation of state departments 
and institutions during the course of the current fiscal year and require immediate 
attention; 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, ¶F, as amended by PL 2017, c. 460, Pt. B, §1, 
is further amended to read:
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 until June 30, 2018.  
For the state fiscal year beginning July 1, 2018, the base year for each facility is its 
fiscal year that ended in the calendar year 2016.  For state fiscal years beginning on 
or after July 1, 2019, subsequent rebasing must be based on the most recent cost 
report filings available as of April 30th of that respective year.  The department may 
provide a mechanism for subsequent adjustments to base year costs to reflect any 
material difference between as-filed cost reports used in rebasing and subsequent 
determinations of audited, allowable costs for the same fiscal period.  The 
department's rules must provide that, beginning in the state fiscal year beginning July 
1, 2018, the rates set for each rebasing year must include an inflation adjustment for a 
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. and, beginning in the state fiscal 
year beginning July 1, 2019, the inflation adjustment must be further modified by:
(1)  An adjustment of the projected inflation from the beginning to the end of the 
payment year based upon the costs paid by nursing facilities for goods and 
services required to provide patient care;
(2)  An adjustment using the forecasted increase in the skilled nursing facility 
market basket index for the coming federal fiscal year, as published in the 
Federal Register, when the United States Department of Health and Human 
Services, Centers for Medicare and Medicaid Services publishes the Medicare 
program's skilled nursing facility prospective payment system rates for the 
coming federal fiscal year; and
(3)  When carrying out cost report audits and determining final prospective 
payment system rates pursuant to department rules regarding costs related to 
resident care under the principles of reimbursement for nursing facilities, an 
adjustment to reflect the actual inflation and take into account any further 
changes to the medical care services index or market basket index projections 
over the payment year.
Any rebasing done pursuant to this paragraph may not result in a nursing facility 
receiving a reimbursement rate that is lower than the rate in effect on June 30, 2018, 
inclusive of casemix adjustment.
Sec. 2.  PL 2017, c. 460, Pt. B, §§3 and 4 are amended to read:
Sec. B-3.  Rate increases for nursing facilities.  The Department of Health and 
Human Services shall amend its rule in 10-144, Chapter 101: MaineCare Benefits 
Manual, Chapter III, Section 67, Principles of Reimbursement for Nursing Facilities to 
provide for the following.
1. Special wage allowance for fiscal year 2018-19 and subsequent fiscal years.  
For the state fiscal year ending June 30, 2019, a special supplemental allowance must be 
made to provide for increases in contract labor, wages and wage-related allowable 
benefits and taxes in both the direct care cost component and routine care cost component 
as follows.  An amount equal to 10% of allowable contract labor, wages and associated 
allowable benefits and taxes as reported on each facility's as-filed cost report for its fiscal 
year ending in calendar year 2016 must be added to the cost per resident day in 
calculating each facility's prospective rate, notwithstanding any otherwise applicable caps 
or limits on reimbursement to the contrary. This The supplemental allowance must also 
be allocated to the routine care cost component of the rate for settlement purposes and be 
allowed and paid at final audit to the full extent that it does not cause reimbursement to 
exceed the facility's allowable direct care and routine care costs in that fiscal year.  The 
supplemental allowance for fiscal years ending in calendar year 2019 must be paid at 
100% of the calculated per diem rate for state fiscal year 2018-19 and paid in each 
successive fiscal year until the fiscal year in which a rebasing under the Maine Revised 
Statutes, Title 22, section 1708, subsection 3, paragraph F has incorporated the costs of 
contract labor, wages and allowable benefits and taxes of a facility. For purposes of this 
subsection, "contract labor" includes nursing, housekeeping, dietary, laundry and related 
services.
1-A.  Additional special wage allowance for fiscal year 2019-20 and subsequent 
fiscal years.  For the state fiscal year ending June 30, 2020, an additional special 
supplemental allowance must be made to provide for increases in contract labor, wages 
and allowable benefits and taxes in both the direct care cost component and routine care 
cost component as follows. An amount equal to 10% of allowable contract labor, wages 
and allowable benefits and taxes as reported on each facility's as-filed cost report for its 
fiscal year ending in calendar year 2017 must be added to the cost per resident day in 
calculating each facility's prospective rate, notwithstanding any otherwise applicable caps 
or limits on reimbursement to the contrary.  The additional supplemental allowance must 
be allocated to the routine care cost component of the rate for settlement purposes and be 
allowed and paid at final audit to the full extent that it does not cause reimbursement to 
exceed the facility's allowable direct care and routine care costs in that fiscal year. The 
additional supplemental allowance for fiscal years ending in calendar year 2020 must be 
paid in each successive state fiscal year until the fiscal year in which a rebasing under the 
Maine Revised Statutes, Title 22, section 1708, subsection 3, paragraph F has 
incorporated the costs of contract labor, wages and allowable benefits and taxes of a 
facility. For purposes of this subsection, "contract labor" includes nursing, housekeeping, 
dietary, laundry and related services.
1-B. No requirement to show that increased rates are applied exclusively to 
wages and benefits.  The department may not require a nursing facility to ensure or 
otherwise demonstrate, including requiring a nursing facility to document in the nursing 
facility's financial records or to the department, that an increase in reimbursement rates 
that results from implementation of this Act is applied in full to wages and benefits for 
employees who provide direct care services.
2. Changes in occupancy penalty.  For the state fiscal years ending June 30, 2019, 
June 30, 2020 and June 30, 2021, the reduction in allowable cost per day in the fixed 
costs component based on minimum occupancy standards applies only for an annual level 
of occupancy less than 70%.  For fiscal years ending June 30, 2022 and thereafter, the 
reduction in allowable cost applies only for an annual level of occupancy less than 85% 
for facilities with 61 or more beds and 80% for facilities with 60 or fewer beds.
3. High Medicaid nursing facilities.  Beginning July 1, 2019 2018, the supplemental 
payment established by Public Law 2013, chapter 594, section 3, subsection 5 must be 
revised to provide that for each 1% over 70% MaineCare occupancy the supplemental 
payment increases to 60¢ per resident day, is not subject to cost settlement and must be 
retained by the facility in its entirety for any nursing facility whose MaineCare residents 
constitute more than 80% of the nursing facility's total number of residents and whose 
base year direct and routine aggregate costs per day are less than the median aggregate 
direct and routine allowable costs for the facility's peer group.  The supplemental 
payment must continue to apply as provided in Public Law 2013, chapter 594, section 3, 
subsection 5 for facilities that do not meet the standard set forth in this subsection.
3-A. Supplemental allowance to nursing facilities with specialty medical-
psychiatric beds or units.  Beginning July 1, 2019, an additional payment of 60¢ per 
reimbursed MaineCare resident day for each 1% over 70% MaineCare occupancy must 
be made to a nursing facility with specialty medical-psychiatric beds or units that are 
subject to the department's rules regarding community-based specialty nursing facility 
units under the principles of reimbursement for nursing facilities. The allowance must be 
provided for each resident day of specialty medical-psychiatric service and retained by 
the facility in its entirety and is not subject to cost settlement.
3-B.  Supplemental allowance to nursing facilities that provide intensive 
acquired brain injury rehabilitation services.  Beginning July 1, 2019, an additional 
payment of 60¢ per reimbursed MaineCare resident day for each 1% over 70% 
MaineCare occupancy must be made to a nursing facility that provides intensive 
rehabilitation services for individuals with acquired brain injury.  The allowance must be 
provided for each resident day of intensive acquired brain injury rehabilitation services 
and retained by the facility in its entirety and is not subject to cost settlement.
4. Hold harmless.  The rate of reimbursement for nursing facilities for direct care 
and routine care costs that results from amending the law or the rules to reflect the revised 
method of 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 
June 30, 2018. 
Sec. B-4.  Rate increases for residential care facilities.  The Department of 
Health and Human Services shall amend its rules in 10-144, Chapter 101: MaineCare 
Benefits Manual, Chapter III, Section 97, Appendix C, Principles of Reimbursement for 
Medical and Remedial Service Facilities; and 10-144, Chapter 115: Principles of 
Reimbursement for Residential Care Facilities - Room and Board Costs to provide for the 
following rate changes.
1.  Special wage allowance for fiscal year 2018-19 and subsequent fiscal years.  
For the state fiscal year ending June 30, 2019, a special supplemental allowance must be 
made to provide for increases in contract labor, wages and wage-related allowable 
benefits and taxes in the direct care, personal care services and routine care cost 
components as follows.  An amount equal to 10% of allowable contract labor, wages and 
associated allowable benefits and taxes as reported on each facility's as-filed cost report 
for its fiscal year ending in calendar year 2016 must be added to the cost per resident day 
in calculating each facility's prospective rate, notwithstanding any otherwise applicable 
caps or limits on reimbursement to the contrary.  This The supplemental allowance must 
also be allowed and paid at final audit to the full extent that it does not cause 
reimbursement to exceed the facility's allowable costs in each component that is cost 
settled in that fiscal year.  The supplemental allowance must be paid in each fiscal year 
after state fiscal year 2018-19 until the fiscal year in which rates have been rebased using 
2019 or a later calendar year as a base year and the rebased rates have incorporated the 
costs of contract labor, wages and allowable benefits and taxes that were reported on each 
facility's as-filed cost report for its fiscal year ending in calendar year 2019. For purposes 
of this subsection, "contract labor" includes nursing, housekeeping, dietary, laundry and 
related services.
1-A. Additional special wage allowance for fiscal year 2019-20 and subsequent 
fiscal years.  For the state fiscal year ending June 30, 2020, an additional special 
supplemental allowance must be made to provide for increases in contract labor, wages 
and allowable benefits and taxes in the direct care, personal care services and routine care 
cost components as follows.  An amount equal to 10% of allowable contract labor, wages 
and allowable benefits and taxes as reported on each facility's as-filed cost report for its 
fiscal year ending in calendar year 2017 must be added to the cost per resident day in 
calculating each facility's prospective rate, notwithstanding any otherwise applicable caps 
or limits on reimbursement to the contrary.  The additional supplemental allowance must 
be allocated to the routine care cost component of the rate for settlement purposes and be 
allowed and paid at final audit to the full extent that it does not cause reimbursement to 
exceed the facility's allowable costs for each component that is cost settled in that fiscal 
year.  The supplemental allowance must be paid in each fiscal year after state fiscal year 
2019-20 until the fiscal year in which rates have been rebased using 2020 or a later 
calendar year as a base year and the rebased rates have incorporated the costs of contract 
labor, wages and allowable benefits and taxes that were reported on each facility's as-filed 
cost report for its fiscal year ending in calendar year 2020. For purposes of this 
subsection, "contract labor" includes nursing, housekeeping, dietary, laundry and related 
services.
1-B.  No requirement to show that increased rates are applied exclusively to 
wages and benefits.  The department may not require a residential care facility to ensure 
or otherwise demonstrate, including requiring a residential care facility to document in 
the residential care facility's financial records or to the department, that an increase in 
reimbursement rates that results from implementation of this Act is applied in full to 
wages and benefits for employees who provide direct care services.
2. Adjustment for inflation for rates for fiscal year 2019-20 and thereafter. For 
the state fiscal year ending June 30, 2020 and each year thereafter, the MaineCare 
payment rates attributable to wages and salaries in each cost component specified in 
subsection 1 for allowable direct care, personal care services and routine care costs must 
be increased by an inflation factor in accordance with the United States Department of 
Labor, Bureau of Labor Statistics Consumer Price Index medical care services index, 
published as of April 1st of each year. 
Sec. 3.  Retroactivity.  That section of this Act that amends Public Law 2017, 
chapter 460, Part B, section 3, subsection 3 applies retroactively to July 1, 2018.
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved.
SUMMARY
This bill is emergency legislation amending statutory and unallocated provisions to 
require the Department of Health and Human Services to amend the department's rules 
regarding MaineCare reimbursement of nursing facility and residential care facility costs, 
including:
1. Clarifying and requiring additional cost-of-living adjustments to reimbursed costs 
based upon:
A. The costs paid by nursing facilities for goods and services required to provide 
patient care;
B. The forecasted increase in the skilled nursing facility market basket index for the 
coming federal fiscal year published by the United States Department of Health and 
Human Services, Centers for Medicare and Medicaid Services; and
C. Any further changes to the United States Department of Labor, Bureau of Labor 
Statistics Consumer Price Index medical care services index or market basket index 
projections over the payment year when the department is carrying out cost report 
audits and determining final prospective rates pursuant to department rules regarding 
costs related to resident care under principles of reimbursement for nursing facilities 
during the payment year;
2. Clarifying and amending nursing facility reimbursement provisions enacted in 
Public Law 2017, chapter 460 regarding a 10% special supplemental wage allowance by:
A. Requiring the allowance to include contract labor and requiring an additional 10% 
wage allowance in state fiscal year 2019-20 and incorporating both requirements into 
a rebasing of the reimbursement rates in future years;
B.  Prohibiting department rules that require a nursing facility to ensure or otherwise 
demonstrate that the increase in rates applies only to wages and benefits; 
C. Changing the low-cost, high Medicaid facility supplemental payment by removing 
the low-cost requirement; and
D. Providing a supplemental allowance of 60¢ per reimbursed MaineCare resident 
day for each 1% over 70% MaineCare occupancy to nursing facilities with specialty 
medical-psychiatric beds or units and to nursing facilities that provide intensive 
acquired brain injury rehabilitation services; and
3. Clarifying and amending residential care facility reimbursement provisions enacted 
in Public Law 2017, chapter 460 regarding a 10% special supplemental wage allowance 
by:
A. Requiring the allowance to include contract labor and requiring an additional 10% 
wage allowance in state fiscal year 2019-20 and incorporating both requirements into 
a rebasing of the reimbursement rates in future years;
B.  Prohibiting department rules that require a residential care facility to ensure or 
otherwise demonstrate that the increase in rate applies only to wages and benefits; 
and
C. Requiring reimbursement rates for allowable direct care, personal care services 
and routine care costs to be adjusted yearly for inflation.