MaineCare Notice of Agency Rule-making Adoption, MaineCare Benefits Manual, Chapter III, Section 45

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The Division of Policy posts all proposed and recently adopted rules on MaineCare’s Policy and Rules webpage.  This website keeps the proposed rules on file until they are finalized and until the Secretary of State website is updated to reflect the changes.  The MaineCare Benefits Manual is available on-line at the Secretary of State’s website

Below, please find a MaineCare Notice of Agency Rule-making Adoption. You can access the complete rule at

Notice of Agency Rule-making Adoption

AGENCY:  Department of Health and Human Services, MaineCare Services

CHAPTER NUMBER AND TITLE:  10-144 C.M.R., Chapter 101, MaineCare Benefits Manual (MBM), Chapter III, Section 45, Principles of Reimbursement for Hospital Services



The principal change the Department made in this rulemaking was to eliminate the current provider-specific rates for reimbursing distinct psychiatric units and distinct substance use disorder (SUD) units in hospitals, and to establish a new reimbursement methodology. In compliance with 22 M.R.S. Sec. 3173-J(2), the Department conducted a rate determination process:  a Rate Determination Initiation Notice was issued on October 7, 2022; MaineCare presented the draft rate methodology and definitions to providers and interested stakeholders in January 2023; accepted public comments until February 3, 2023; and will respond in writing to comments with an explanation of whether and how feedback was incorporated into the final rate determination. The Department’s resulting reimbursement methodology generally aligns with Medicare’s payment method for distinct psychiatric units. In compliance with P.L. 2023, ch. 3, Sec. S-1, the initial per diem base rates were set so the methodology will provide, in aggregate, one hundred percent (100%) cost reimbursement across all hospitals with these distinct units based upon 2022 data.

The adopted rule makes the following specific changes:

  • Section 45.01- Definitions:

Change the definition of “Discharge” to add that a discharge occurs if a patient is transferred to a distinct psychiatric Unit or a distinct SUD unit. The Department proposes a retroactive application of July 1, 2023, for this change, as authorized by 22 M.R.S. Sec. 42(8), as this change benefits, and does not harm MaineCare members or providers.

Added definitions for “From Date” and Medicare Severity Diagnosis-Related Group (MS-DRG), terms utilized in Section 45.03-1(B), the new reimbursement methodology for distinct psychiatric Units and SUD units.

  • Section 45.02-1- Inflation: 

Change the name of the entity producing the economic trend factor used by the Department for determining inflation, from Global Insight to IHS Markit due to a change in the name of the organization that publishes the “Healthcare Cost Review”.

  • Section 45.03-1(B) New Reimbursement Methodology for Distinct Psychiatric Units and Distinct Substance Use Disorder (SUD) Units: 

The Department eliminated the methodology for reimbursing distinct psychiatric units and distinct SUD units and established a new reimbursement methodology that the Department determined in accordance with 22 M.R.S. Sec. 3173-J(2). Under the new methodology, the Department calculates reimbursement for covered in-person stays in these units using the following formula: multiplying the per diem base rate (determined by whether the MS-DRG is a psychiatric or SUD MS-DRG) by the applicable MS-DRG relative weight and multiplying that figure by the applicable Length of Stay factor.

  • Section 45.03-1(B)(1)(a):

The Department calculated per diem base rates to result in total reimbursement equal to one hundred percent (100%) of the costs of such discharges in the aggregate across all hospitals with distinct psychiatric units and distinct SUD units, utilizing 2022 data when adjusted for MS-DRG relative weights and Length of Stay factor. 

  • Section 45.03-1(B)(1):

The Department proposes to adopt the Medicare MS-DRG and Length of Stay factors for the new reimbursement methodology.  The Medicare Length of Stay factor is a cumulative factor that takes into account how many days the patient stays in the distinct unit.

  • Section 45.03-1(B)(1)(d):

The Department adopted the updated per diem base rate annually based on the inflation provision in this rule (Section 45.02-1): the economic trend factor from the most recent addition of the “Healthcare Cost Review” from IHS Markit. In accordance with 22 M.R.S. Sec. 3173-J(3), the per diem base rates are posted on the MaineCare Provider Fee Schedule, and the Department is not required to do rulemaking to make the annual inflation adjustments to the per diem base rate.

The new reimbursement methodology has a retroactive application date of July 1, 2023, as authorized by 22 M.R.S. 42(8), as the changes benefit, and do not harm MaineCare members or providers. 

  • Section 45.03-1(B)(2):

In order to prevent any adverse financial impact to any hospital with a distinct psychiatric unit, the Department adopted a time limited supplemental payment for hospitals with distinct psychiatric units that are located in zip codes that CMS designates as “super rural” and that also have a High Geographic Need Health Professional Shortage Area for mental health designation by the Health Resources and Services Administration.

  • In response to public comments:

In the adopted rule, the Department expanded the eligibility of hospitals who can claim for the distinct psychiatric units and distinct substance use disorder units to include acute care critical access hospitals.

    • The adopted rule adds a new provision – Section 45.04-1(C)(Distinct Psychiatric and Substance Use Disorder Units) to the acute care critical access 45.04 provision.
    • Section 45.04-2 (Prospective Interim Payment) was also amended to exclude distinct psychiatric units and distinct substance use disorder units from the departmental prospective interim payment obligation.
    • Additionally, the definition of Distinct Psychiatric Unit (Section 45.01-9) was amended to include acute care critical access hospitals.
  • Appendix A(VIII): 

The Department includes distinct psychiatric units and SUD units in this provision, so that hospitals can claim for two episodes of care if patients are transferred to distinct rehabilitation, psychiatric or SUD units. The Department adopted a retroactive application of July 1, 2023, for this change, as authorized by 22 M.R.S. Sec. 42(8), as this change benefits, and does not harm MaineCare members or providers.

  • Remove website addresses and embed links to those websites in their place.
  • Make minor technical edits and format corrections.

See  for rules and related rulemaking documents.

EFFECTIVE DATE:              December 18, 2023

STATUTORY AUTHORITY: 22 M.R.S. §§ 42(8), 3173; 22 M.R.S. 3173-J; P.L. 2021, ch 635; P.L. 2023, ch 3, Sec. S-1

AGENCY CONTACT PERSON: Catherine Coolidge, Comprehensive Health Planner II

AGENCY NAME:                        MaineCare Services

ADDRESS:                                   109 Capitol Street, 11 State House Station

                                                      Augusta, Maine 04333-0011


TELEPHONE:(207)-624-4082 FAX: (207)-287-6106

                                                      TTY users call Maine relay 711


Office: MaineCare Services

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