MaineCare Benefits Manual, Chapter III, Section 67, Principles of Reimbursement for Nursing Facilities

Date posted:

Attachment(s):

Notice of Agency Rule-making Adoption

AGENCY:  Department of Health and Human Services, MaineCare Services, Division of Policy

CHAPTER NUMBER AND TITLE:  10-144 C.M.R. Ch. 101, MaineCare Benefits Manual, Chapter III, Section 67, Principles of Reimbursement for Nursing Facilities

ADOPTED RULE NUMBER:

CONCISE SUMMARY:

The Department adopts the following changes to 10-144 C.M.R. Chapter 101, Ch. III, Section 67, Principles of Reimbursement for Nursing Facilities:

On January 31, 2025, the Department adopted an emergency Ch. III, Section 67 rule, which had a legal effective date of February 1, 2025. The purpose of this rulemaking is to make permanent those February 1, 2025 emergency changes. These changes establish a new reimbursement methodology for Nursing Facilities.

In compliance with 22 M.R.S. Sec. 3173-J(2), the Department conducted a rate determination process prior to the February 1, 2025 emergency rule. 

These changes include moving toward creating a prospective payment system that incorporates acuity measures that capture the range of need associated with caring for all residents, reduces reliance on cost settlements, decreasing administrative burden and providing more predictability in reimbursement amounts.

Regional variations for labor costs, as required by 22 M.R.S. Sec. 1708(3)(E), have been revised so that the four regions all have a factor of 1.0 for the four regions, to reflect the fact that analysis does not show any meaningful regional variation in labor costs.  Regional variations were analyzed during the 3173-J rate determination process. The Department analyzed regional differences, based on 2022 cost reports, and repeated the analysis with the updated model based on 2023 cost reports. No clear pattern emerged. Rural nursing facilities show higher costs than urban facilities, but super-rural facilities show lower costs than both rural and urban. Accordingly, the Department determined that there were no meaningful regional variations for labor costs, and revised the four regions to each have a factor of 1.0.  

Occupancy adjustments have also been removed, at the request of providers in the Rate Reform process and to the benefit of providers.

The Department shall submit to the Centers for Medicare & Medicaid Services, and anticipates approval, for State Plan Amendments related to these provisions. 

This rulemaking makes the following changes: 

  1. 1.4 Definitions:
  • Changes Allowable Costs so that it aligns with the Daily Rate.
  • Changes Ancillary Services from a charge made in addition to the per diem charge to a charge made in addition to the Daily Rate.
  • Definition of Base Year: Substitutes “Daily Rate” for “case mix prospective rate.” 
  • Adds a definition of Capital Cost Rate, Direct Care Rate, Hours Per Day, Maine Veterans’ Home 70% Program, and Routine Care Price.
  • Removes the definition of Experience Modifier, Fixed Cost Component, Free Standing Facility, Hospital-affiliated Nursing Facility, Per Diem Rate, Prospective Case Mix Reimbursement System, Reasonable Costs, and Total Allowable Inflated Direct Care Rate Per Day.
  1. Principle 7 – Cost Allocation Plans and Changes in Accounting Methods
  • Removes references to allowable costs that are no longer applicable.
  1. Principle 9 – Cost Related to Resident Care
  • Removes reference to bonuses based on the availability of any anticipated savings in the MaineCare Direct Care Component.
  • Changes the date at which costs must be incurred to become consistent with the effective date of the rule.
  1. Principle 10 – Upper Payment Limit
  • Removes reference to exceeding 112% of the State mean.
  1. Principle 13 – Financial Reporting
  • Changes “fiscal year” to “calendar year” under Cost Reports for facilities’ submission of the annual cost report and under Adequacy and Timeliness of Filing for cost report and financial statements.
  1. Principle 15 – Cost Components
  • Changes the prospective case mix system model of reimbursement to a prospective payment system with two statewide rates for Direct Care and Routine, and specifies that capital costs will be based on as-filed costs.
  1. Principle 16 – Direct Care Cost Components
  • Changes the title from Direct Care Cost Components to Direct Care Costs.
  • Updates Resident Assessments to reflect current CMS protocols, utilizing Care Area Assessments with the Care Area Trigger, and updates when the Admissions Assessment must be completed.
  • Uses 25 (rather than 44) case mix classification groups.
  • Updates the Assessment Review Process to remove reference to CMS documents that no longer exist.
  • Updates how sanctions will be applied so it is applicable to the Direct Care Rate.
  • Updates how Direct Care Cost allowable costs are determined.
  1. Principle 17 – Routine Cost Component
  • Changes the title from Routine Costs Components to Routine Costs.
  • Updates how routine costs are determined.
  • Adds workers compensation to the list of routine costs.
  1. Principle 18 – Capital Cost Component
  • Changes the title from Fixed Costs Components to Capital Costs.
  • Changes the definition of base year costs from the audited fiscal year to the as-filed MaineCare cost report.
  • Removes workers compensation from being a Capital Cost – Workers’ compensation has been moved to the Routine Cost principle as a cost. 
  • Deletes   payment for High MaineCare Utilization as capital costs.
  • Removes workers compensation insurance premiums, the costs of loss-prevention and safety services, and wages and fringes paid to workers engaged in formal return-to-work programs as components of Insurance.
  • Removes Occupancy Adjustment.
  • Removes Payment for high MaineCare Utilization.
  • Removes Aggregate Hold Harmless.
  • Corrects instances of “principle” that should be “principal.”
  1. Principle 22 – Establishment of Daily Rate
  • Changes the title to Establishment of Daily Rate.
  • Creates a new rate methodology that includes a Direct Care Rate, Routine Care Rate, Capital Cost Rate, Bariatric Add-on, and Ventilator Add-on.
  • Moves the Direct Care Regional Index so that it applicable to the Direct Care Rate and changes the index for all four regions to 1.0, indicating there are no regional variations for labor costs.
  • Adopts the Direct Care Patient-Driven Payment Model (PDPM) – Nursing component to determine the case mix index for each Member, utilizing specific Maine weights.
  • Establishes a Bariatric Add-on payment, if the standards are met and if it is prior authorized by the Department.
  • Establishes “Guardrails” for a period of three years to help nursing facilities transition fully to single daily rates under the new reimbursement methodology.
  • Removes portions of the prior methodology that are no longer applicable.
  1. Principle 23 – Interim, Subsequent, and Prospective Rates
  • Changes the title to Capital Costs, Interim, Subsequent, and Prospective Rates
  • Changes the Interim Rate and Subsequent Year Rates to align with the new methodology.
  • Removes the Prospective Rate portion as it is no longer applicable.
  1. Principle 24 – Final Prospective Rate
  • Removes this section entirely. It is no longer needed because there is no final prospective rate for Direct and Routine components. This Principle 24 provides for audits of capital costs.
  1. Principle 25 – Final Audit of First and Subsequent Prospective Years
  • Removes references to direct care and routine costs.
  • Removes the section on transfers of cost centers.
  • Removes the section on final audit adjustments.
  • Changes “fiscal year” to “calendar year.”

14. Principle 26 – Settlement of Fixed Expenses

  • Removes outdated Nursing Home Reform Act of 1987 requirements and OBRA costs.
  • Changes “fiscal year” to “calendar year.”

15. Principle 27 – Establishment of Peer Group

  • Removes this section entirely.

16. Principle 28 – Calculation of Overpayment or Underpayments

  • Updates the title to clarify the section only applies to Capital Costs.

17. Principle 29 – Bedbanking of Nursing Facility Beds

  • Removes Routine and Direct Care Cost Components.

18. Principle 31 – Inflation Adjustment

  • Revises the section to make it consistent with new methodology while complying with Maine statute, 22 M.R.S. Sec. 1708.

19. Principle 32 – Regions

  • Removes this section entirely and moves the Regions provision to Establishment of the Daily Rate (Principle 22).

20. Principle 32 (formerly Principle 35)– Adjustments

  • Changes the title to Adjustments to Capital Costs.
  • Makes changes to the section so that it only applies to Capital Costs.

21. Principle 41 – Remote Island Nursing Facilities

  • Removes this section entirely.

In addition to the above changes, the Department changed all references of “fixed” costs, charges, or rates to “capital.” The Department also corrected “principle” to “principal” in § 18.2.3.3 and 18.5.4.3.

See http://www.maine.gov/dhhs/oms/rules/index.shtml  for rules and related rulemaking documents.

EFFECTIVE DATE:                             April 21, 2025

AGENCY CONTACT PERSON:        Derrick Grant, Special Projects

AGENCY NAME:                               Division of Policy

ADDRESS:                                         109 Capitol Street, 11 State House Station

                                                            Augusta, Maine 04333-0011

EMAIL:                                              derrick.grant@maine.gov

TELEPHONE:                                    (207)-423-5569 FAX: (207) 287-6106

                                                            TTY Users call Maine relay 711

 

Office: MaineCare Services

Comment deadline:

Effective date:

Comments for this rule have been closed.