MaineCare implements new rate reforms supported by current services budget

June 27, 2023

While the Legislature considers budget proposals for future MaineCare reforms, the Department of Health and Human Services (DHHS) Office of MaineCare Services continues its implementation of payment rates already developed under the landmark law (P.L. 2022, Ch. 639 (PDF)). Specifically, the Office of MaineCare Services implemented reformed payment for Federally Qualified Health Centers effective March 1 and will implement an array of cost-of-living adjustments effective July 1. These changes are partly funded by the FY24-25 current services budget (P.L. 2023, Ch.17 or L.D. 424 (PDF)) which includes $34 million for FQHC rates and $152 million for cost-of-living adjustments for the SFY 2024-25 biennium.

In 2019, DHHS launched a Comprehensive Rate System Evaluation to understand how MaineCare rates compare to rates for similar services under Medicare, Maine commercial payers, and other state Medicaid programs. It also examined different models for state rate setting and gathered public input on a system to promote shared goals.

Today, just over one year from the enactment of the MaineCare Rate System Reform Law that enshrined this new system into law, MaineCare continues to advance rate reform initiatives that further MaineCare’s mission to provide adequate, equitable and data-driven reimbursement, and reward quality, cost-effective care.

FQHC Rate Changes

The Department and rate setting vendor Guidehouse collaborated with interested stakeholders to perform a rebasing of rates for Federally Qualified Health Centers (FQHCs) pursuant to rate reform and P.L. 2021 Ch. 747 (PDF). FQHCs are nonprofit health centers or clinics that provide primary care services to medically underserved areas and populations regardless of individuals’ ability to pay. Maine has around 20 centers with 70 locations across the state. The rebasing produced new rates that are retroactive to March 1, 2023and have been available for billing since May 10, 2023. On average, rates for FQHCs increased 45 percent.

MaineCare initiated this rate determination on September 27, 2022. To inform the methodology, MaineCare held a series of stakeholder meetings from October 2022, through March 2023. Subsequently, it developed a reimbursement methodology to rebase rates consistent with statutory intent and compliant with federal guidance. As part of this process, MaineCare trained providers on how to bill for certain services to allow for easier adjustment of claims by providers and the Department after implementation.

Next, MaineCare will update the MaineCare Benefits Manual to incorporate these proposed changes. Providers will have the opportunity to provide any additional feedback and/or comment on these changes at that time.

Cost-of-Living Adjustments (COLA)

MaineCare is increasing reimbursement rates for certain services listed below, through a cost-of-living adjustment (COLA) as directed by the rate reform law. The COLA will be effective July 1, 2023 and is equal to an increase of 8.24 percent above the currently established rate(s). Certain other services received an 8.24 percent COLA increase on January 1, 2023. This COLA increase mirrors the percentage increase in the Maine minimum wage as determined by the Maine Department of Labor.

July 1, 2023, COLA Rate Adjustments: MaineCare Benefits Manual Section/Title
Section 23 Developmental and Behavioral Evaluation Clinic Services
Section 25 Dental Services
Section 30 Family Planning Services (select codes)
Section 40 Home Health Services
Section 89 MaineMOM
Section 91 Health Home Services – Community Care Teams
Section 93 Opioid Health Home Services
Section 97 Children’s Residential Care Facilities (Appendix D) and Substance Use Disorder Residential Treatment Facilities (Appendix B)
Section 102 Rehabilitative Services

The FY24-25 current-services budget provided funding for cost-of-living adjustments for changes that will take place on January 1, 2024 and 2025 and July 1, 2024.

Overall Progress

MaineCare continues to make great strides in ensuring equitable, accessible, and sustainable health coverage for low-income people, including its nationally recognized transformation of Maine’s rate-setting system. As of early spring 2023, rate reform efforts have impacted 29 sections of policy, representing 55 percent of MaineCare’s claims-based spending. For example, in January 2023, historic rate reforms for behavioral health services were implemented, many of which had gone for years without a substantial rate update. MaineCare has also exceeded its goal to have at least 40 percent of MaineCare reimbursements tied to value by the end of calendar year 2022, achieving more than 50 percent of reimbursements now tied to purchasing initiatives that reward high-quality care.

For more information on MaineCare’s Comprehensive Rate System Evaluation and to stay updated on Rate System Reform, visit