An Act to Establish a Managed Care Program for MaineCare Services
Maine Legislature, Session 131, LD 1334
Committee: Health and Human Services
Sponsors: MILLETT, STOVER
Amends: 22 MRSA §3174-K

Legislative Document
No. 1334
H.P. 848
House of Representatives, March 28, 2023
An Act to Establish a Managed Care Program for MaineCare 
Services
Reference to the Committee on Health and Human Services suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MILLETT of Waterford.
Cosponsored by Representative: STOVER of Boothbay.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §3174-KKK is enacted to read:
§3174-KKK.  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 
capitation payment.
B.  "Managed care program" means a program of integrated managed care for all 
covered MaineCare services implemented in accordance with this section.
C.  "Social determinants of health" means the conditions in which individuals  are born, 
grow, live, work and age, as well as the social structures and economic systems that 
shape these conditions, including the social environment, physical environment and 
health services that influence health outcomes.
2.  Managed care program.  The department shall implement a managed care program 
for categorically eligible recipients of the Temporary Assistance for Needy Families 
program and the children's health insurance program as defined in section 3174-X, 
subsection 1, paragraph A and members eligible for the MaineCare program pursuant to 
section 3174-G, subsection 1, paragraph H.  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.  By July 1, 2025, categorically eligible recipients of the Temporary Assistance for 
Needy Families program and the children's health insurance program as defined in 
section 3174-X, subsection 1, paragraph A and members eligible for the MaineCare 
program pursuant to section 3174-G, subsection 1, paragraph H must be enrolled in the 
managed care program and capitation payments to managed care organizations must 
begin.
B.  Categorically eligible recipients of the Temporary Assistance for Needy Families 
program and the children's health insurance program as defined in section 3174-X, 
subsection 1, paragraph A and members eligible for the MaineCare program pursuant 
to section 3174-G, subsection 1, paragraph H may not be required to enroll in the 
managed care program until the department identifies and enters into contracts with at 
least 3 managed care organizations that it determines capable of meeting 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 facilitating access 
to all covered MaineCare services, including, but not limited to, physical health 
services, prescription services, dental services, services provided under waiver 
programs and behavioral health services, on a statewide basis to all MaineCare 
members.
The department shall pursue federal waivers as applicable and necessary to address 
social determinants of health under the MaineCare program.
B.  The department shall select managed care organizations using requests for 
proposals.  The department shall design the requests for proposals to ensure the 
selection of proposals that will improve MaineCare member outcomes, ensure access 
to all covered MaineCare services and support the improvement of social determinants 
of health.
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)  Quality factors provided by a national organization that collects health care 
effectiveness data and information and sets measures and standards to ensure 
MaineCare members receive high-quality care;
(3)  Documented policies and procedures for preventing fraud and abuse;
(4)  Experience in serving MaineCare members and achieving quality standards;
(5)  Availability and accessibility of primary care and specialty care providers in a 
relevant network;
(6)  Provision of nonmandatory benefits, particularly dental care and disease 
management, and other initiatives that improve health outcomes;
(7)  Capability to address social determinants of health or connect to programs that 
address education, food insecurity and housing instability; and
(8)  An office or a commitment to establishing an office for the managed care 
organization in the State.
D.  The department shall use a procurement method that results in at least 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.
E.  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.
F.  All contracts with managed care organizations entered into under this section 
include the responsibility for all administrative services for MaineCare 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;
(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 MaineCare members and 
disenrollment surveys;
(4)  An internal process for reviewing and responding to grievances from 
MaineCare members and for submitting quarterly reports including the number, 
description and outcome of grievances filed by MaineCare 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 MaineCare 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)  Requirements for maintaining and submitting encounter and claims data for all 
services provided to MaineCare 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)  Requirements that the managed care organization 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)  An appeals process within the department to review and reverse any denial of 
care by the managed care organization on the basis of medical necessity in 
accordance with federal requirements;
(9)  Financial consequences imposed by the department on the managed care 
organization for failure to meet requirements of law or rule or of the contract 
between the department and the managed care organization;
(10)  Requirements that the managed care organization must be licensed by the 
Department of Professional and Financial Regulation, Bureau of Insurance and is 
subject to oversight by the bureau on matters of financial solvency;
(11)  Providing written communications, including, but not limited to, notices, 
decisions and explanations of benefits, in a manner that is readable at or near a 6th-
grade reading level and offering translated versions of communications, as required 
by the department;
(12)  Cost sharing in accordance with the provisions of 42 United States Code, 
Section 1396o; and
(13)  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 MaineCare 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 MaineCare 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 the managed care 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.  Ratesetting.  The department shall establish rates in the contracts in accordance 
with this section 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 the 
contracts are not met, including value-based payments;
B.  Appropriate rate floors for in-network primary care and specialty care providers 
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, 2024 to 
select managed care organizations pursuant to the Maine Revised Statutes, Title 22, section 
3174-KKK.  No later than July 1, 2025, the managed care organizations shall enroll the 
populations required in Title 22, section 3174-KKK, subsection 2, paragraph A and 
capitation payments must begin.  No later than July 1, 2027, 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, and capitation payments must begin.
Sec. 3.  State plan amendment and waivers.  By January 1, 2024, 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 in accordance with the United States Social Security Act, Section 1932(a) and 
for all necessary waivers to implement the provisions of this Act and to maximize federal 
funding for programs addressing social determinants of health as defined in the Maine 
Revised Statutes, Title 22, section 3174-KKK, subsection 1, paragraph C.
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 to the managed care program, as defined in the Maine Revised 
Statutes, Title 22, section 3174-KKK, subsection 1, paragraph B, 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 
at least 3 managed care organizations that are able to operate the managed care program on 
a statewide basis.  By July 1, 2025, the Medicaid expansion population, those covered by 
the children's health insurance program and members categorically eligible for the 
Temporary Assistance for Needy Families program must be enrolled in the managed care 
program.  By July 1, 2027, all eligible MaineCare members must be enrolled in the 
managed care program.  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 January 1, 2024.  It requires the 
department to explore options to create a plan that integrates Medicaid and Medicare 
benefits for individuals into a managed care program.