Rule Adoption: 10-144 C.M.R. Chapter 115, Principles of Reimbursement for Residential Care Facilities – Room and Board Costs 

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 notice of Agency Rule-making Adoption. You can access the complete rule at http://www.maine.gov/dhhs/oms/rules/index.shtml 

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Notice of Agency Rule-making Adoption 

CHAPTER NUMBER AND TITLE: State of Maine Department of Health and Human Services 10-144 C.M.R. Chapter 115, Principles of Reimbursement for Residential Care Facilities – Room and Board Costs 

ADOPTED RULE NUMBER: 

CONCISE SUMMARY: The Department of Health and Human Services adopts changes in 10-144 C.M.R. Chapter 115, Principles of Reimbursement for Residential Care Facilities – Room and Board Costs (“Chapter 115”), in conformance with Public Law 2017, ch. 304, An Act to Amend Principles of Reimbursement for Residential Care Facilities (“The First Act”)(now enacted as 22 M.R.S. § 7863), to, effectuate the following changes: 

• A residential care facility that experiences an unforeseen and uncontrollable event during a year which results in unforeseen or uncontrollable increases in expenses may request an adjustment to a prospective rate in the form of an extraordinary circumstance allowance.
• Section 20.5 - New Construction, Acquisitions, and Renovations involving capital expenditures is updated to $500,000 from $350,000.
• Costs incurred by residential care facilities to comply with changes in federal or state laws, regulations and rules, or local ordinances and not otherwise specified in rules adopted by the Department are considered reasonable and necessary. Reimbursement for additional regulatory costs shall be paid via a supplemental payment that is added to the per diem rate until the Department adjusts the routine limit, as applicable, to fairly and properly reimburse facilities for these costs. 

These changes were initially implemented via emergency rulemaking (on November 20, 2018) and shall have a retroactive effective date of November 1, 2017. 

In addition, this adopted rule complies with Public Law 2017, ch. 460, An Act Making Certain Appropriations and Allocations and Changing Certain Provisions of the Law Necessary to the Proper Operations of State Government (“The Second Act”), and effectuates the following changes: 

• For the state fiscal year ending June 30, 2020 and each year thereafter, the MaineCare payment rates attributable to wages and salaries in routine services costs for Section 97, Private Non-Medical Institution Appendix C providers must be increased by an inflation factor in accordance with the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index – medical care services index from the prior December for professional services, nursing home, and adult day care services. 

• Effective August 1, 2018, for the state fiscal year ending June 30, 2019, a special supplemental allowance shall be made to Appendix C PNMIs to provide for increases in wages and wage-related benefits in the routine cost component. An amount equal to ten percent (10%) of wages and associated benefits and taxes in the routine cost component as reported on each facility’s as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day in calculating each facility’s prospective rate, notwithstanding any otherwise applicable caps or limits on reimbursement. This supplemental allowance must also be allowed and paid at final audit to the full extent that it does not cause reimbursement to exceed the facility’s allowable cost per day in the routine cost component in that fiscal year. 

These changes were initially implemented via emergency rulemaking (on November 20, 2018) and shall have a retroactive effective date of August 1, 2018. 

The First and Second Acts required the Department to amend Chapter 115 to include ECA, regulatory compliance costs, inflation factor, and the special wage allowance changes for Residential Care Facilities and MaineCare Section 97, Private Non-Medical Institution (PNMI) Services-Appendix C providers. Separately, and in addition to the changes required in Chapter 115, the Department made changes in 10-144 C.M.R. Ch. 101, MaineCare Benefits Manual, Chapter III, Section 97 (“Section 97”), and the Section 97 changes are major substantive. Pursuant to 5 M.R.S. § 8072, “regular” major substantive rule changes are not legally effective until they are approved by the Legislature and finally adopted by an agency, which can take over a year. As such, because the Department sought to implement the Section 97 changes simultaneously with these State Rule changes (in order to treat similar providers equitably), on November 20, 2018, it made changes to both rules through emergency rulemaking. 

This rulemaking makes permanent the emergency rule changes. 

In addition to the changes required by the First and Second Acts, pursuant to its general broad rulemaking authority set forth in, inter alia, 22 M.R.S. §§ 42 and 3173, the Department also revised the rule requirements regarding when providers may be approved for refinancing (Principle 20.4.3(d)). As a result of comments and legal review by the Office of Attorney General, the Department finds that these changes should have been made solely through “regular” (not emergency) routine technical rulemaking. The changes in Principle 20.4.3(d) shall be applied prospectively only, effective upon final adoption of this rule. The Department shall work with providers to equitably adjust reimbursement if necessary in the event that the Department utilized the language starting on November 20, 2018 through February 18, 2019 (date of final rule). 

Other changes to Chapter 115 include, but are not limited to: 

• Calculating depreciation recapture for residential care facilities that have been sold, the calculation of the credits for buildings and fixed equipment will be from the date the owner began operating the facility with the original license.
• For sales of residential care facilities, moveable equipment will accumulate credits as follows: for the first four years, the asset is placed into service, all but ten percent (10%) per year will be recaptured, and from the fifth (5th) and sixth (6th) years, all but thirty percent (30%) per year will be recaptured, not to exceed one hundred percent (100%). The calculation of the credits for moveable equipment will be from the date the asset is placed into service by the provider.
• Defines moveable equipment credit accumulation and calculation for residential care facilities that have been sold.
• The following definitions have been added or clarified: Licensed Capacity, Proper Interest, Swap Investments, and Remote Island Facility.
• Computer hardware may be considered a capital cost; the Department will not consider software purchase or upgrades as an allowable capital expenditure. Computer software and associated ongoing support costs fall under Routine Costs, 30.1.3.
• Office names have been updated and/or inserted to provide clarity. 

Changes were made to the final rule as a result of comments and legal review, as set forth in detail in the Summary of Comments and List of Changes to the Final Rule, including: 

• The Occupancy Level definition has reverted back to its pre-proposed language.
• Remote island facility supplemental payment has been added to Principle 14, Reimbursement Method in conformance s.
• Principle 20.1 language has been reinstated and amended to clarify routine and fixed costs.
• 4.3(c)(ii) has been removed as the proposed language was contradictory to Principle 20.2.2.
• Principle 34.7 has been amended to include Extraordinary Circumstance Allowance and Regulatory Compliance Costs administrative hearing and informal review process.
• Principle 34.7.3 has been amended to expand informal review request timeframe to sixty (60) days from thirty (30) days. 

See http://www.maine.gov/dhhs/oms/rules/index.shtml for rules and related rulemaking documents. 

EFFECTIVE DATE:                          February 18, 2019 

AGENCY CONTACT PERSON:       Heidi Bechard, Comprehensive Health Planner II

AGENCY NAME:                                 Office of MaineCare Services, Division of Policy

ADDRESS:                                             242 State St.

                  11 State House Station

                                                                 Augusta, Maine 04333-0011

EMAIL:                                                  Heidi.bechard@maine.gov

TELEPHONE:                                       207-624-4074, FAX: (207) 287-1864

                                                                 TTY: 711 (Deaf or Hard of Hearing)