An Act To Establish a Managed Care Program for MaineCare Services
Maine Legislature, Session 130, LD 1701
Committee: Health and Human Services
Sponsors: MILLETT
Amends: 22 MRSA §3174-F

Legislative Document
No. 1701
H.P. 1264
House of Representatives, May 13, 2021
An Act To Establish a Managed Care Program for MaineCare 
Services
Received by the Clerk of the House on May 11, 2021.  Referred to the Committee on 
Health and Human Services pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint 
Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative MILLETT of Waterford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §3174-FFF is enacted to read:
§3174-FFF.  MaineCare reform
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Managed care organization" means an entity that contracts with the department to 
provide managed care in the MaineCare program through a health insurer or health 
maintenance organization authorized under Title 24-A that bears full risk under a 
capitated payment.
B.  "Managed care program" means a program of integrated managed care for all 
covered MaineCare services implemented in accordance with this section.
2.  Managed care program.  The department shall implement a managed care program 
for all covered MaineCare services.  The department has full authority to manage the 
program except that the department may not change eligibility categories and income 
thresholds as determined in this Title.  The department shall include in the requests for 
proposals and in the contract with each managed care organization the requirement that the 
provision of services to members of the MaineCare program must be managed on a 
phased-in schedule over 4 years as provided in this subsection.
A.  The following MaineCare members must be enrolled within 2 years of the 
implementation of a managed care program and in each year thereafter:
(1)  Persons who are eligible for MaineCare under section 3174-G, subsection 1, 
paragraphs A, E, F, G and H; and
(2)  Children who are not disabled and who are eligible for MaineCare under 
section 3174-G, subsection 1, paragraphs B and D.
B.  All of the eligibility groups under section 3174-G, subsection 1 not included in 
paragraph A must be enrolled in the managed care program after the 2nd year of 
implementation but before the end of the 4th year on a schedule as required by the 
department after the department has received approval from the federal Department of 
Health and Human Services, Centers for Medicare and Medicaid Services and after the 
department adopts rules.
C.  A MaineCare member who is not enrolled under paragraph A or B may voluntarily 
enroll in a managed care program that provides services in the region of the State in 
which the member lives.
D.  A MaineCare member may not be required to enroll in a managed care program 
unless there are 3 managed care organizations that can each meet all the requirements 
in this section.
3.  Managed care organization requirements.  The following requirements apply to 
contracts with managed care organizations.
A.  The department shall require services in the managed care program to be provided 
by managed care organizations that are capable of coordinating and delivering all 
covered MaineCare services, including, but not limited to, physical health services, 
prescription services, dental services, long-term care supports and services provided 
under waiver programs and behavioral health services, on a statewide basis to all 
members.
B.  The department shall select managed care organizations using requests for 
proposals.  The procurement method must give the department broad flexibility and 
power to negotiate value and must provide potential bidders the broad flexibility to 
innovate.
C.  The department shall include quality factors in the selection of managed care 
organizations, including, but not limited to:
(1)  Accreditation by a nationally recognized accrediting body;
(2)  Documented policies and procedures for preventing fraud and abuse;
(3)  Experience in serving members and achieving quality standards;
(4)  Availability and accessibility of primary care and specialty care physicians in 
a relevant network;
(5)  Provision of nonmandatory benefits, particularly dental care and disease 
management, and other initiatives that improve health outcomes;
(6)  Capability to address social determinants of health or connect to programs that 
address education, food insecurity and housing instability; and
(7)  An office or a commitment to establishing an office for the managed care 
organization in the State.
D.  After negotiations are conducted under paragraph B, the department shall select 
managed care organizations that the department determines to be responsive, to have 
signed contracts with providers of covered services in sufficient numbers to meet 
access standards established in this section and by rule and to provide the best value to 
the department.
E.  The department shall use a procurement method that results in 3 managed care 
organizations that the department authorizes to enroll MaineCare members upon 
negotiation of rates consistent with this section and applicable requirements of the 
federal Department of Health and Human Services, Centers for Medicare and Medicaid 
Services.
F.  All contracts with managed care organizations entered into under this section are 
contingent upon the appropriation and allocation by the Legislature of sufficient 
funding to pay for the managed care program.
G.  All contracts with managed care organizations entered into under this section are 
contingent upon the managed care organizations having signed provider contracts as 
required in paragraph D.
H.  All contracts with managed care organizations include the responsibility for all 
administrative services for members enrolled in the managed care program, including, 
but not limited to, claims processing, care and case management, grievances, appeals 
and other necessary administrative services.
4.  Managed care organization accountability.  The following provisions apply to 
managed care organizations in order to ensure standards for managed care organization 
accountability.
A.  The department shall establish a 5-year contract with each managed care 
organization selected through the procurement process described in this section.  A 
managed care organization contract may be renewed for an additional 2 years.  The 
department may extend the term of a managed care organization contract to cover any 
delays during the transition to a new managed care organization.
B.  The department shall establish contract requirements that are necessary for the 
operation of the managed care program.  Contract requirements must include the 
following:
(1)  Defined measures and goals for risk-adjusted health outcomes, quality of care, 
patient satisfaction and cost.  Each measure and goal must be subject to specific 
accountability measures and include penalties;
(2)  Access standards that are specific and that are population-based for the number, 
type and regional distribution of providers in managed care organization networks 
to ensure access to care for both adults and children.  The access standards must 
allow the managed care organizations to limit the providers in their networks based 
on credentials, quality indicators and cost;
(3)  Measures for satisfaction compiled from members and disenrollment surveys;
(4)  An internal process for reviewing and responding to grievances from members 
and for submitting quarterly reports including the number, description and outcome 
of grievances filed by members.  The grievance procedure must meet the 
requirements of the department;
(5)  Participation and coordination with departmental efforts in health care payment 
reform, including value-based purchasing; quality improvement; delivery system 
improvement; improvement in members' experience of care; and participation in 
other departmental initiatives, including participation in the patient-centered 
medical homes.  The department may require the managed care organization to 
participate in initiatives regarding compensation for providers for coordination of 
care, management of chronic disease and avoidance of the need for more costly 
services;
(6)  The managed care organization shall maintain and submit encounter and claims 
data for all services provided to members in a manner and format and in accordance 
with a time schedule specified by the department.  Claims data for each encounter 
submitted under this subparagraph must include the amount paid by the managed 
care organization to all providers of services attributable to the encounter;
(7)  The managed care organization shall establish program integrity functions and 
activities to reduce the incidence of fraud and abuse, including, at a minimum, a 
provider credentialing system and ongoing provider monitoring, procedures for 
reporting instances of fraud and abuse and designation of a program integrity 
compliance officer;
(8)  A managed care organization shall provide that the commissioner and the 
medical director of the MaineCare program have the authority to override any 
denial of care by the managed care organization on the basis of medical necessity;
(9)  A managed care organization must be subject to financial consequences, 
backed by a performance bond or similar guarantee, for failure to meet quality 
standards, access standards, member satisfaction standards or other requirements 
of law or rule or of the contract between the department and the managed care 
organization;
(10)  A managed care organization is subject to the jurisdiction and oversight of 
the Department of Professional and Financial Regulation, Bureau of Insurance and 
shall comply with provisions of Title 24-A, including chapter 56-A;
(11)  A managed care organization when providing to members and prospective 
members written communications, including, but not limited to, notices, decisions 
and explanations of benefits, shall provide those communications in a manner that 
is readable at or near a 6th-grade reading level and offer translated versions of 
materials, as required by the department;
(12)  A managed care organization may allow for cost sharing in accordance with 
the provisions of 42 United States Code, Section 1396o; and
(13)  A managed care organization shall provide a reasonable contribution to pay 
for the funding of the program integrity compliance officer under subparagraph 
(7).
5.  Payments to managed care organizations.  The department shall pay managed 
care organizations on the basis of per member, per month payments negotiated pursuant to 
this subsection.  Payments must be at risk-adjusted rates based on historical utilization and 
spending data, projected and adjusted to reflect the eligibility category, geographic area 
and clinical risk profile of the members with the provision for subsequent adjustment based 
on actual enrollments and encounter data when available.  In negotiating rates with the 
managed care organizations, the department shall consider any adjustments necessary to 
encourage organizations to use the most cost-effective means of improving outcomes and 
providing specialized management of particular subgroups of populations with complex or 
high-cost needs.
6.  Rate setting.  The department must establish rates in the contracts that include the 
following:
A.  Rates that are actuarially sound, including utilization assumptions that are 
consistent with industry and local standards.  Rates must be adjusted for risk and 
include a portion that is at risk if quality and outcome measures established in contracts 
are not met, including value-based payments;
B.  Appropriate rate floors for in-network primary care physicians and specialty care 
physicians and pharmacy dispensing fees to ensure the achievement of goals; and
C.  Rates for services in the remaining fee-for-service programs.
7.  Rulemaking.  The department shall adopt rules as necessary to implement this 
section. Rules adopted pursuant to this subsection are major substantive rules as described 
in Title 5, chapter 375, subchapter 2-A.
Sec. 2.  Selection of managed care organizations.  The Department of Health 
and Human Services shall issue a request for proposals no later than January 1, 2022 to 
select managed care organizations pursuant to the Maine Revised Statutes, Title 22, section 
3174-FFF.  No later than 2 years after the implementation of a managed care program, the 
managed care organizations shall enroll the populations required in Title 22, section 
3174-FFF, subsection 2, paragraph A.  No later than 4 years after the implementation of 
the program, the managed care organizations shall enroll all members eligible for 
MaineCare services, including members receiving long-term care supports and services 
and home-based and community-based services under a waiver.
Sec. 3.  State plan amendment and waivers; contingent effective date.  By 
November 1, 2021, the Department of Health and Human Services shall apply to the federal 
Department of Health and Human Services, Centers for Medicare and Medicaid Services 
for approval of a state plan amendment under the United States Social Security Act, Section 
1932(a) to implement the provisions of this Act and for all necessary waivers.  The 
provisions of this Act take effect upon notification from the Department of Health and 
Human Services to the Revisor of Statutes that all necessary approvals under this section 
have been granted.
Sec. 4.  Department of Health and Human Services to integrate benefits.  
The Department of Health and Human Services shall explore options to create a companion 
Medicare equivalent by managed care organizations with contracts with the department 
that will facilitate the integration of the Medicaid and Medicare benefits under a single 
provider for those individuals eligible for both programs.
SUMMARY
This bill establishes a managed care program for all covered MaineCare services.  It 
requires the Department of Health and Human Services to issue a request for proposals for 
managed care organizations that are able to operate the managed care program on a 
statewide basis.  Within 2 years of the implementation of a managed care program, the 
Medicaid expansion population, those covered by the federal Children's Health Insurance 
Program and members categorically eligible as Temporary Assistance for Needy Families 
program recipients must be enrolled in managed care organizations.  Within 4 years of 
implementation, all eligible MaineCare members must be enrolled in managed care 
programs.  The bill establishes the requirements for contracts for managed care 
organizations.  It requires the Department of Health and Human Services to apply for any 
state plan amendments or waivers required by November 1, 2021.  It requires the 
department to explore options to create a plan that integrates Medicaid and Medicare 
benefits for individuals.