DHHS Implements $54 Million Investment in New MaineCare Rates

August 16, 2022

The Maine Department of Health and Human Services (DHHS) has implemented a slate of MaineCare rate changes that improve the health and well-being of patients but have been historically underfunded. These changes, which took effect July 1, 2022, include a $54 million investment into cost-effective services tied to Medicare reimbursement and cut across nine MaineCare service areas from physical and occupational therapy to primary care. These rate adjustments will be updated annually, maintaining alignment of MaineCare rates with federal Medicare rates. This complements other July 1 rate changes, such as the $22 million for cost of living adjustments. The goal of these changes, which are part of DHHS’ comprehensive rate system reform effort, is to ensure MaineCare members have access to high-quality care, and sustain the financial health of providers serving MaineCare members.

The new rate changes result from the 2021 MaineCare Comprehensive Rate System Evaluation, which identified that reimbursement for many of these services paled in comparison to rates paid by commercial health plans in Maine and by other states’ Medicaid agencies. In addition, MaineCare’s historical practice of setting some provider payment rates as a percentage of Medicare rates for years as far back as 2007 meant that these rates did not keep pace with costs and put these providers at a disadvantage to those offering newer services paid based on more recent Medicare rates.

With the MaineCare rate system reform law taking effect last Monday, August 8, 2022, MaineCare will review and adjust its rates for all services on a regular cycle to determine if they remain current and competitive. Competitive rates ensure providers are incentivized to accept MaineCare as an insurance option, which in turn helps MaineCare members find providers close to home.

The estimated $54 million in rate investments for services with an updated Medicare benchmark are detailed in the table below.

Investment in Services Benchmarked to Medicare
Section of Policy Service Estimated Impact Projected % Increase Over 2021 Spending
Section 14 Advanced Practice Registered Nursing Services $607,648 3.2%
Section 15 Chiropractic Services $334,583 27.3%
Section 30 Family Planning Services $113,167 8.2%
Section 68 Occupational Therapy Services $3,992,626 89.4%
Section 75 Vision Services $1,262,569 31.1%
Section 85 Physical Therapy Services $1,537,368 56.8%
Section 90 Physician Services $45,035,592 37.8%
Section 95 Podiatric Services $411,603 35.1%
Section 109 Speech and Hearing Services $754,087 10.5%
Total: $53,936,076  

Based on evidence, the Department anticipates these investments will both improve outcomes and prevent the need for higher cost interventions down the line for people served by MaineCare.

Improved Member Outcomes and Lower Costs:

  • Greater use of primary care is associated with lower costs, higher patient satisfaction, lower rates of hospitalization, fewer emergency department (ED) visits, and lower mortality.
  • Physical therapy decreases rates of opioid prescribing for low back pain. Referrals to and use of physical therapy after ED visits reduce care costs, even 12 months later.
  • Occupational therapy improves patient problem solving and use in inpatient settings is associated with lower hospital readmission rates.
  • Speech therapy significantly improves expressive abilities for children with delayed language development.
  • Vision services are linked to quality of life, independence, mobility, and educational attainment. Undiagnosed or untreated visual disorders across all age groups are the root of significant health care costs.
  • Podiatry services result in significant reductions in fall rates among older adults; lower incidence and severity of diabetic foot ulcers; and reduced risk of infection, amputation, mortality, and healthcare utilization rates.

In addition to this investment in services, MaineCare invested an additional estimated $22.1 million to provide the first of annual cost of living adjustments (COLA) to services that had not otherwise received a rate investment in the past year. This investment functioned as a down payment in anticipation of the MaineCare rate system reform law.

4.9% Cost of Living Adjustments (COLA- for services not otherwise receiving a COLA or other rate adjustment in the past year)
Section of Policy Service Estimated Impact
Section 13 Targeted Case Management Services $1,867,683
Section 17 Community Support Services $2,096,590
Section 23 Developmental and Behavioral Evaluation Clinic Services $46,978
Section 28 Rehabilitative and Community Support Services for Children with Cognitive Impairments and Function Limitations $3,892,308
Section 40 Home Health Services $234,696
Section 65 Behavioral Health Services $8,494,832
Section 91 Health Home Services - Community Care Teams $141,203
Section 92 Behavioral Health Home Services $3,288,555
Section 93 Opioid Health Home Services $1,239,382
Section 97-D Therapeutic Foster Care $430,303
Section 102 Rehabilitative Services $410,951
Total $22,143,481

Further, the Department has updated rates and expanded coverage for dental services, and is making ongoing investments in nursing facilities and residential care facilities, to be effective July 1, 2022.

Taken together, these updates represent a monumental investment in the health of Maine people and in the health care system that supports them.