An Act to Establish a Managed Care Program for MaineCare
Maine Legislature, Session 132, LD 1878
Sponsors: STOVER, STEWART
Amends: 22 MRSA §3188-A

Legislative Document
No. 1878
H.P. 1249
House of Representatives, May 5, 2025
An Act to Establish a Managed Care Program for MaineCare 
Services
Received by the Clerk of the House on May 1, 2025.  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 STOVER of Boothbay.
Cosponsored by Senator STEWART of Aroostook and
Representatives: BRENNAN of Portland, DUCHARME of Madison, GRAHAM of North 
Yarmouth, GRAMLICH of Old Orchard Beach, JAVNER of Chester, SHAGOURY of 
Hallowell, Senators: MOORE of Washington, RENY of Lincoln.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §3188-A is enacted to read:
§3188-A.  Department to establish managed care program for MaineCare services
1.  Definitions.  For the purposes of this section, unless the context otherwise indicates, 
the following terms have the following meanings. 
A. "Capitation payment" means a monthly payment, paid per enrollee, by the 
department to a managed care organization under contract with the department at a 
negotiated rate included in the contract. 
B. "Children's health insurance program" has the same meaning as in section 3174-X, 
subsection 1, paragraph A. 
C. "Managed care" means the provision of financing or delivery of health care services 
to a patient through: 
(1) Arrangements with selected providers to furnish health care services; and
(2) Financial incentives for patients to use the participating providers pursuant to 
subparagraph (1) and procedures included in the managed care program. 
D. "Managed care organization" or "MCO" means an entity that contracts with the 
department that manages and controls health care services covered under the 
MaineCare program, including a health insurer or a health maintenance organization, 
authorized to operate in this State and that bears the full risk in an agreement for a 
capitation payment. 
E. "Managed care program" means a program of integrated managed care for all 
covered MaineCare services implemented in accordance with this section. 
F. "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. 
G. "TANF" has the same meaning as in section 3762, subsection 1, paragraph E. 
2.  Managed care program; administration.  The department shall develop a 
managed care program.  The department shall contract with managed care organizations as 
provided under this section to deliver MaineCare services through the managed care 
program statewide.  The department shall require that managed care organizations 
operating the managed care program pursuant to subsection 5 provide coverage for 
services, including, but not limited to, physical health, behavioral health, pharmacy and 
dental services.  The department may require coverage of additional services if it chooses 
and shall pursue federal waivers as applicable and necessary to address social determinants 
of health under the MaineCare program.  The department has full authority to manage the 
managed care program, except that the department may not change eligibility categories, 
including income thresholds, as provided in this section.
3.  Covered individuals.  The following categories of Medicaid enrollees must be 
enrolled in the managed care program established pursuant to this section according to the 
time frame established in subsection 9: 
A. Individuals covered under the TANF program; 
B. Individuals participating in the children's health insurance program; 
C. Individuals enrolled in Medicaid who have not attained 65 years of age and have a 
family income up to 138% of the federal poverty level who are eligible for enrollment 
only under provisions of the federal Patient Protection and Affordable Care Act 
establishing Medicaid expansion; and 
D. Individuals who are dually eligible for Medicaid and Medicare. 
4.  Requests for proposals; selection.  The department shall issue a request for 
proposals to select 3 MCOs to operate the managed care program according to this 
subsection. 
A. The department shall select MCOs 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, nonemergency medical transit services, 
services provided under waiver programs and behavioral health services on a statewide 
basis to all MaineCare members described in subsection 3. 
B. The department shall design the requests for proposals to ensure the selection of 
MCOs most likely to improve MaineCare member outcomes, ensure access to all 
covered MaineCare services and support the mitigation of social determinants of 
health. 
C. The department shall include in the request for proposals the requirement that a 
bidding MCO must be able to meet the time frames for implementation of the managed 
care program as established in subsection 9. 
D. The department shall include in the request for proposals a copy of the initial rates 
established pursuant to subsection 7. 
E. In developing the selection process, the department shall develop a set of factors that 
the department must consider during the selection process to ensure the quality of an 
MCO.  The department shall consider at least the following factors with respect to an 
MCO: 
(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 that 
MaineCare members receive high-quality care; 
(3) Documented policies and procedures for preventing fraud and abuse; 
(4) Experience in serving Medicaid 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) Whether the MCO has an office, or a commitment to establishing an office, in 
this State. 
F. The department may contract with a consultant to assist with the selection process. 
5.  Contracts with selected managed care organizations.  The department shall 
establish a 5-year contract with each managed care organization selected through the 
selection process described in subsection 4.  A managed care organization contract may be 
renewed in one-year increments for up to an additional 3 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.  The department shall establish basic requirements 
concerning the content of contract terms.  Contracts entered into by the department under 
this subsection must include terms that: 
A. Authorize the managed care organization to enroll MaineCare members upon 
negotiation of rates consistent with subsection 7 and applicable requirements of the 
United States Department of Health and Human Services, Centers for Medicare and 
Medicaid Services; 
B. Include the negotiated capitation payment rates and any agreed upon fee-for-service 
rates; 
C. Require that the managed care organization is responsible 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; 
D. Require the managed care organization to complete enrollment consistent with the 
requirements of subsection 9; 
E. Define measures and goals for risk-adjusted health outcomes, quality of care, patient 
satisfaction and cost; 
F. Establish 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; 
G. Establish measures for managed care program enrollee satisfaction developed from 
disenrollment surveys and other sources of feedback from MaineCare enrollees; 
H. Establish 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; 
I. Address 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 organizations 
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; 
J. Include 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 paragraph must include the amount paid by the managed care 
organization to all providers of services attributable to the encounter; 
K. Require that the managed care organization establish managed care 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 managed 
care program integrity compliance officer; 
L. Require the managed care organization to make a reasonable contribution to pay for 
the funding of the managed care program integrity compliance officer required under 
paragraph K; 
M. Allow the department, through an appeal process developed by 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; 
N. Establish and give notice of financial consequences the department may impose on 
the managed care organization for failure to meet requirements of law or rule or for 
breach of contract between the department and the managed care organization; 
O. Require the managed care organization to be licensed by the Department of 
Professional and Financial Regulation, Bureau of Insurance and give notice that the 
MCO is subject to oversight by the Bureau of Insurance on matters of financial 
solvency; 
P. Require the managed care organization to provide all written communications to 
managed care program enrollees, 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; and 
Q. Require cost sharing in accordance with the provisions of 42 United States Code, 
Section 1396o. 
6.  Payments to managed care organizations.  The department shall pay managed 
care organizations on the basis of per enrollee, per month payments negotiated pursuant to 
subsection 7.  The department shall also establish rates for services in the remaining fee-
for-service programs. 
7.  Ratesetting; capitation payments.  The department shall establish rates for 
capitation payments to managed care organizations, to be included in the department's 
contract with the managed care organization, according to the following: 
A. Rates must be adjusted for risk 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 in the managed care program and encounter data when 
available; 
B. Rates must be actuarially sound, including utilization assumptions that are 
consistent with industry and local standards; 
C. Rates must be designed as value-based payments such that a portion of the payment 
to the MCO may be withheld if quality and outcome measures established in the 
contract are not met; and
D. Rates must be designed with appropriate minimum rates for in-network primary 
care and specialty care providers and pharmacy dispensing fees to ensure the 
achievement of goals. 
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 of managed care program enrollees with complex or 
high-cost needs.
8.  Regulation by Bureau of Insurance.  A managed care organization contracted 
with the department pursuant to this section is subject to regulations under Title 24-A 
related to financial solvency of health insurers or health maintenance organizations, as 
applicable to the composition of that MCO. 
9.  Implementation; enrollment time frame.  MaineCare enrollees must be enrolled 
in the managed care program according to the following time frame. 
A. MaineCare enrollees described in subsection 3, paragraphs A, B and C must be 
enrolled in the managed care program by February 1, 2029. 
B. MaineCare enrollees described in subsection 3, paragraph D must be enrolled in the 
managed care program, operated by the same 3 managed care organizations under 
contract to provide services to the populations described in paragraph A, by July 1, 
2030. 
Capitation payments to the contracted managed care organizations must begin by February 
1, 2029 or whenever enrollment under paragraph A begins, whichever occurs earlier. 
10.  Implementation; waivers and state Medicaid plan amendments.  By April 1, 
2026, the department shall submit all waivers and state Medicaid plan amendments to the 
United States Department of Health and Human Services, Centers for Medicare and 
Medicaid Services necessary to implement this section. 
11.  Report.  By December 3, 2025, the department shall submit a report to the 
Legislature concerning the department's plans for completing the transition of services to 
the managed care program within the time frame established in subsection 9, including any 
anticipated need to amend existing state law to establish the managed care program and 
complete the transfer of services consistent with this section. 
12.  Rulemaking.  The department shall adopt rules as necessary to implement this 
section.  Rules adopted pursuant to this subsection must include, but are not limited to: 
A. The establishment of an appeal process by which the department may review and 
reverse any denial of care by the managed care organization on the basis of medical 
necessity in accordance with federal requirements; and
B. The establishment of penalties that may be enforced against a managed care 
organization for violating any law or rule. 
Rules adopted pursuant to this subsection are major substantive rules as defined in Title 5, 
chapter 375, subchapter 2-A.
SUMMARY
This bill establishes a managed care program for MaineCare services. 
The bill requires the Department of Health and Human Services to issue a request for 
proposals to contract with 3 managed care organizations to provide MaineCare services.  
Managed care refers to a system of delivering services through arrangements with selected 
providers to furnish health care services and financial incentives for patients to use the 
participating providers and procedures included in the managed care program.  The model 
also requires that the department reimburse the managed care organizations primarily using 
negotiated monthly rate per enrollee, rather than a fee-for-service model. 
The bill establishes a number of requirements for developing the procurement process 
and essential contract terms.  The bill establishes deadlines by which specific categories of 
eligible enrollees must be enrolled in the managed care program, beginning February 1, 
2029.  The department must submit a report to the Legislature by December 3, 2025 
detailing its plan for implementing the program within the timeline established by this 
legislation.  The bill also includes a deadline of April 1, 2026, by which time the department 
must submit all waivers and amendments for the state Medicaid plan that are necessary to 
implement this legislation.  The department is authorized to adopt rules.  Rules adopted are 
considered major substantive rules under the Maine Administrative Procedure Act.