An Act To Provide Access to Health Care for Maine Citizens
Maine Legislature, Session 129, LD 1591
Committee: Health Coverage, Insurance and Financial Services
Sponsors: BRENNAN
Amends: 22 MRSA §1722, 36 MRSA §2892

Legislative Document
No. 1591
H.P. 1150
House of Representatives, April 18, 2019
An Act To Provide Access to Health Care for Maine Citizens
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative BRENNAN of Portland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §1722, sub-§1, ¶¶A and B, as reallocated by RR 2007, c. 2, 
§9, are amended to read:
A.  Each hospital may voluntarily hold its consolidated operating margin to no more 
than 3%.  For purposes of this paragraph, a hospital's consolidated operating margin 
is calculated by dividing its consolidated operating income by its total consolidated 
operating revenue.  Annually, for each hospital, the department shall establish a 
recommended percentage that the hospital should hold its consolidated operating 
margin to and notify a hospital of the department's recommendation for that hospital.
B.  Each hospital may voluntarily restrain its increase in its expense per 
casemix-adjusted inpatient and volume-adjusted outpatient discharge to no more than 
110% of the forecasted increase in the hospital market basket index for the coming 
federal fiscal year, as published in the Federal Register, when the federal Centers for 
Medicare and Medicaid Services publishes the Medicare program's hospital inpatient 
prospective payment system rates for the coming federal fiscal year.  For purposes of 
this paragraph, the measure of a hospital's expense per casemix-adjusted inpatient and 
volume-adjusted outpatient discharge is calculated by:
(1)  Calculating the hospital's total hospital-only expenses;
(2)  Subtracting from the hospital's total hospital-only expenses the amount of the 
hospital's bad debt;
(3)  Subtracting from the amount reached in subparagraph (2) the hospital taxes 
paid to the State during the hospital's fiscal year; and
(4)  Dividing the amount reached in subparagraph (3) by the product of:
(a)  The number of inpatient discharges, adjusted by the all payer case mix 
index for the hospital; and
(b)  The ratio of total gross patient service revenue to gross inpatient service 
revenue.
For the purposes of this paragraph, a hospital's total hospital-only expenses include 
any item that is listed on the hospital's Medicare cost report as a subprovider, such as 
a psychiatric unit or rehabilitation unit, and does not include nonhospital cost centers 
shown on the hospital's Medicare cost report, such as home health agencies, nursing 
facilities, swing beds, skilled nursing facilities and hospital-owned physician 
practices.  For purposes of this paragraph, a hospital's bad debt is as defined and 
reported in the hospital's Medicare cost report and as submitted to the Maine Health 
Data Organization pursuant to Title 22, chapter 1683. Annually, for each hospital, the 
department shall establish a recommended limit on an increase in the hospital's 
expenses under this paragraph and notify the hospital of the department's 
recommendation for that hospital.
Sec. 2.  36 MRSA §2892, as amended by PL 2017, c. 284, Pt. IIII, §1, is further 
amended by adding at the end a new paragraph to read:
For state fiscal years beginning on or after July 1, 2020, the hospital's taxable year is 
the hospital's fiscal year that ended during calendar year 2018.
Sec. 3.  Medicare Buy-in Program and Affordable Care Act subsidies; 
plan for increased funding.  The Department of Health and Human Services shall 
develop a plan to provide increased funding for the Medicare Buy-in Program and for 
subsidies to individuals under the federal Patient Protection and Affordable Care Act 
using revenue resulting from changing, from 2014 to 2018, the base year on which the 
hospital tax is imposed under the Maine Revised Statutes, Title 36, section 2892.  By 
December 4, 2019, the department shall submit a report on the plan to the Joint Standing 
Committee on Health Coverage, Insurance and Financial Services and the committee may 
report out a bill relating to the report to the Second Regular Session of the 129th 
Legislature.
Sec. 4.  Wholesale prescription drug importation program; design.  The 
Department of Health and Human Services, in consultation with relevant other state 
agencies, federal agencies and interested parties, shall design a wholesale prescription 
drug importation program that complies with 21 United States Code, Section 384, 
including requirements regarding safety and cost savings.  By December 4, 2019, the 
department shall submit the design for a wholesale prescription drug importation program 
to the Joint Standing Committee on Health Coverage, Insurance and Financial Services 
and the committee may report out a bill to the Second Regular Session of the 129th 
Legislature.  In designing the wholesale prescription drug importation program, the 
department must ensure that the program:
1.  Designates a state agency to oversee the program and become a licensed 
wholesaler for the purpose of seeking federal certification and approval to import safe 
prescription drugs that will provide savings to consumers in the State;
2.  Uses Canadian suppliers of prescription drugs regulated under the appropriate 
Canadian or provincial laws;
3.  Includes a process to sample the purity, chemical composition and potency of 
imported prescription drugs;
4.  Ensures that only those prescription drugs expected to generate substantial savings 
for consumers in the State are imported into the State;
5.  Ensures that imported prescription drugs will not be distributed, dispensed or sold 
outside of the State;
6.  Ensures that consumers and health plans are charged only the actual acquisition 
cost of the imported, dispensed prescription drugs;
7.  Ensures that the health plan payment of the prescription drug component of 
pharmacy and health care provider billing reimburses no more than the actual acquisition 
cost of the dispensed, imported prescription drug;
8.  Ensures that participating health plans keep their formularies and claims payment 
systems up to date with the prescription drugs provided through the program;
9.  Ensures that participating health plans base consumer cost sharing on no more 
than the actual acquisition cost of the dispensed, imported prescription drug;
10.  Requires participating health plans to demonstrate to the state agency designated 
to oversee the program how savings on imported drugs are reflected in premiums;
11.  Limits the profit margin of any participating wholesaler or distributor of 
imported prescription drugs to a specified amount established by the designated state 
agency designated to oversee the program;
12.  Does not permit the import of generic prescription drugs that would violate 
United States patent laws on United States branded products;
13.  Complies with the transaction and tracing requirements of 21 United States 
Code, Sections 360eee and 360eee-1 to the extent practical and feasible prior to imported 
prescription drugs coming into the possession of the licensed wholesaler and that the 
program complies fully with those federal requirements after imported prescription drugs 
are in the possession of the licensed wholesaler;
14.  Is adequately financed through a fee on each prescription or other appropriate 
approach, as long as the fee does not jeopardize significant consumer savings; and
15.  Includes an audit function.
SUMMARY
This bill specifies that the base year for the hospital tax imposed under the Maine 
Revised Statutes, Title 36, section 2892 is 2018.  It directs the Department of Health and 
Human Services to submit a plan to the Joint Standing Committee on Health and Human 
Services regarding how the additional state revenue resulting from that change can be 
used for the Medicare Buy-in Program and for subsidies under the federal Patient 
Protection and Affordable Care Act.
Current law provides that each hospital may voluntarily hold its consolidated 
operating margin to no more than 3% and its increase in its expense per casemix-adjusted 
inpatient and volume-adjusted outpatient discharge to no more than 110% of the 
forecasted increase in the hospital market basket index for the coming federal fiscal year.  
The bill does not change those percentages but requires the Department of Health and 
Human Services to annually establish recommended percentages for each hospital.
The bill requires the Department of Health and Human Services, in consultation with 
relevant other state agencies, federal agencies and interested parties, to design a 
wholesale prescription drug importation program.  It requires the department to submit 
the design for the wholesale prescription drug importation program to the Joint Standing 
Committee on Health Coverage, Insurance and Financial Services and authorizes the 
committee to report out a bill to the Second Regular Session of the 129th Legislature.