Questions & Answers
September 9, 2024
Question: Why is the Department planning to reduce certain rates?
Answer: Effective January 1, 2025, per P.L. 2023, Chapter 412, Part XXX, Private Non-Medical Institution (PNMI) and certain home-and community-based services will no longer be subject to the Service Provider Tax (SPT). Historically, the Department’s general practice has been to incorporate the cost of the SPT into reimbursement rates for these services to reimburse providers the cost of paying for the tax. With the repeal of the tax on revenue from these services, it will no longer be appropriate or necessary for the Department to reimburse for the tax. The Centers for Medicare & Medicaid Services (CMS) considers removal of the tax from the rate a matter of compliance. For more information, see the previous DHHS blog on this subject.
Question: What services will receive rate reductions and why aren’t all services subject to a SPT rate reduction?
Answer: The Department will reduce rates where it has documentation that the SPT was built into the rate. CMS expects documentation of the incorporation of SPT into a rate in order for the Department to proceed with a rate reduction.
The Department has compiled and posted a list of procedure codes (PDF) for which it has documentation that the rates incorporate SPT.
Question: When will the rates be reduced?
Answer: Rates will be reduced to coincide with the removal of health providers from the SPT, effective January 1, 2025.
Question: When can I stop submitting SPT payments to Maine Revenue Services?
Answer: The last Service Provider Tax return for all providers will be due January 15, 2025. This is the same whether you are an annual, semi-annual, quarterly, or monthly filer. For additional information about making your SPT payment, you can contact Maine Revenue Services at 207-624-9693 or sales.tax@maine.gov.
Question: Some of the services in question are undergoing a rate determination. Will this reduction wait until any resulting rate adjustments are implemented?
Answer: SPT will be removed from all existing rates where it is documented on January 1, 2025.
Question: How does the Lifespan waiver play into SPT? Will Lifespan services never be subject to SPT?
Answer: Reimbursement for any services implemented on or after January 1, 2025, will not include SPT.
Question: Will I need to reprocess any claims?
Answer: Providers will be expected to submit claims with the new rates that will be effective on January 1, 2025. If the claims are not submitted with the new rates, providers will need to adjust their claims to reflect the updated rates.
Question: Will we bill school health related services differently when this change goes into effect?
Answer: Beginning on January 1, 2025, providers will be expected to submit claims with the codes and new rates that will not include the SPT. We are eliminating the modifiers for the school health related services provided and billed by schools. Schools are exempt from paying the SPT, so section 28 services delivered by schools have modifiers to ensure the rate does not add-on the SPT. Since the tax is not required beginning in January 2025, we will remove the modifiers and will no longer have separate tax-exempt rates. Schools will bill the same codes for section 28 services starting on January 1, 2025, as other providers of section 28 services.
Question: Are these rate reductions subject to the Maintenance of Effort (MoE) requirements for Home and Community Based Services under Section 9817 of the American Rescue Plan (ARP)?
Answer: No. CMS has confirmed that, because these adjustments are necessary for federal compliance, they are not subject to the MoE requirements under Section 9817 of the ARP.
Question: What will my new rate be, after the reduction?
Answer: Effective January 1, 2025, the rate will be reduced to reflect the removal of SPT from the reimbursement model. For those services that receive a Cost of Living Adjustment (COLA) on January 1, 2025, the new rate will reflect both the decrease due to SPT removal (applied first) and the increase due to the COLA (applied second). We will provide all new rate amounts 30 days prior to the implementation of the adjusted rates.
For additional questions, please contact your Provider Relations Specialist.
