Improving how MaineCare sets reimbursement rates for providers

Update: January 21, 2020

Maine's Medicaid program, MaineCare, reimburses health providers for care and treatment they provide to MaineCare members. This includes a wide range of providers, from hospitals and primary care clinics to therapists, behavioral health and substance use disorder treatment facilities, and nursing facilities, among many others.

Over the years, MaineCare has used varying methods to determine reimbursement rates to providers. This has included paying providers based on a percentage of Medicare's rates, industry standards, or other states' rates; updating rates due to legislative mandates or rate studies; and basing rates on actuarial assessments or provider input. While some rate reviews occur quarterly or annually, many do not have a set schedule, leaving some reimbursement rates without regular updates: 40% of policies have not been updated since 2015. These factors have contributed to a rate system that is fragmented and outdated.

The Department is committed to supporting MaineCare members' access to high value-services by creating a more comprehensive, streamlined and coherent system. As a first step toward this goal, on January 4, 2020, the Department issued an RFP seeking proposals to perform a comprehensive evaluation of MaineCare's rate-setting system and make recommendations for improvement.

Once a vendor is selected, the work will begin by cataloging all of MaineCare's current payment rates and methodologies and comparing them to other state Medicaid programs, Medicare, and private insurance. The evaluation will identify areas where MaineCare is an outlier and suggest ways that MaineCare can simplify, streamline, and rationalize its rate-setting approaches. While this work will not include establishing new rates for any specific services, the vendor will propose a plan that includes a prioritized list of services to guide MaineCare when updating rates over the short and long term. As part of the prioritization process, we will seek input from stakeholders across the state. There may be exceptional circumstances in which the Department proceeds with a limited number of rate adjustments prior to the completion of the system evaluation and work plan. These targeted efforts will be designed to integrate with the larger plan once it is complete.

We will also look for opportunities to introduce additional value-based Alternative Payment Models, which use financial incentives to encourage high-quality and efficient services. Examples of MaineCare's existing value-based purchasing programs include our Accountable Communities and three Health Home programs.

Proposals are due January 31, and the Department anticipates that the evaluation process will occur from April through November 2020.