An Act to Update the Alternative Base Year Payment Method for Federally Qualified Health Centers
Maine Legislature, Session 131, LD 1768
Committee: Health and Human Services
Sponsors: GATTINE, DUCHARME, PERRY, PRINGLE
Amends: 22 MRSA §3174-V

Legislative Document
No. 1768
H.P. 1132
House of Representatives, April 25, 2023
An Act to Update the Alternative Base Year Payment Method for 
Federally Qualified Health Centers
(EMERGENCY)
Reference to the Committee on Health and Human Services suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative GATTINE of Westbrook.
Cosponsored by Representatives: DUCHARME of Madison, PERRY of Calais, PRINGLE of 
Windham.
Emergency preamble.  Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, Public Law 2021, chapter 747 provides that an alternative payment method 
may be used for MaineCare reimbursement of services delivered by federally qualified 
health centers, which is based on 2018 and 2019 costs of providing services, instead of the 
federal system, which is based on 1999 and 2000 costs; and
Whereas, the rebased alternative payment rates described above will not continue to 
fairly reflect the costs of services paid for under this method unless the base year for the 
rates is updated regularly; and
Whereas, federally qualified health centers in the State have identified potential 
inadequacies in the extent to which rebased rates will fully recognize increased costs 
associated with workforce shortages and prevailing wage rates; and
Whereas, the inadequacy of MaineCare reimbursement rates for services delivered 
by federally qualified health centers will not be fully addressed unless the Department of 
Health and Human Services is directed to address them and any contrary provisions of 
existing law are revised accordingly; and
Whereas, to preserve and improve the advanced primary care model pioneered by 
federally qualified health centers in Maine, MaineCare payments for those services must 
be increased in order to reflect the current costs of providing services, as a foundation for 
developing a value-based payment model for federally qualified health centers; 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 §3174-V, sub-§3, as enacted by PL 2021, c. 747, §2, is amended 
to read:
3.  Updated base year option.  No later than March 1, 2023, the department shall 
provide an alternative, updated prospective payment method for each federally qualified 
health center that is the same as the prospective payment system set forth in 42 United 
States Code, Section 1396a(bb)(3), except that the base year for determining the costs of 
providing services must be the average of the reasonable costs incurred in the center's fiscal 
years ending in 2018 and 2019, adjusted for any change changes in scope adjustments 
approved since the base year and for inflation measured by the federally qualified health 
center market basket percentage published by the United States Department of Health and 
Human Services, Centers for Medicare and Medicaid Services.  Each federally qualified 
health center must be given the option to be reimbursed under the method provided by this 
subsection or under the method provided by federal law. After December 31, 2023 No later 
than June 30, 2026, and no less frequently than every 3 years thereafter, the department 
may shall update the base year described in this subsection to a more recent base year. In 
selecting the fiscal years to be averaged to update the base year, the department shall 
exclude years affected by a declared public health emergency or shall adjust the actual costs 
and volume in a year affected by a public health emergency to correct for the impact of the 
emergency on cost and volume of services.
Sec. 2.  22 MRSA §3174-V, sub-§3-A is enacted to read:
3-A.  Wage costs and workforce conditions.  The department may increase rates 
established in accordance with subsection 3 to reflect prevailing wage rates to the extent 
that prevailing wage rates are not adequately included in rates established in accordance 
with subsection 3, through inflation adjustments or updated base years or both, and to 
reflect additional expenditures needed to address workforce shortages.
Emergency clause.  In view of the emergency cited in the preamble, this legislation 
takes effect when approved.
SUMMARY
This bill provides that:
1.  After implementing the alternative payment method for federally qualified health 
centers similar to the prospective payment system required by federal law but using an 
updated base year, the Department of Health and Human Services must further update the 
base year of that alternative system no later than June 30, 2026, and no less frequently than 
every 3 years thereafter; and
2.  The department may also adjust rates determined under the alternative payment 
method as needed to reflect prevailing wage rates and workforce shortages.