Bill Summary – FastDemocracy

                                                                                        Approved: 04/26/19


                                129th MAINE LEGISLATURE
                                         LD 1126                          LR 1962(01)
     Resolve, To Classify Employee Health Insurance as a Fixed Cost for MaineCare Reimbursement in
                                             Nursing Homes
                               Preliminary Fiscal Impact Statement for Original Bill
                                    Sponsor: Sen. Timberlake of Androscoggin
                                     Committee: Health and Human Services
                                            Fiscal Note Required: Yes


                                   Preliminary Fiscal Impact Statement

                                                                                             Projections     Projections
                                                           FY 2019-20        FY 2020-21      FY 2021-22      FY 2022-23
Net Cost (Savings)
    General Fund                                            $2,798,184        $5,642,972      $5,646,701      $5,646,701

Appropriations/Allocations
   General Fund                                             $2,798,184       $5,642,972      $5,646,701       $5,646,701
   Federal Expenditures Fund                                $5,963,617      $11,880,629     $11,876,900      $11,876,900
   Other Special Revenue Funds                                $559,264       $1,118,528      $1,118,528       $1,118,528

Revenue
   Federal Expenditures Fund                                $5,963,617      $11,880,629     $11,876,900      $11,876,900
   Other Special Revenue Funds                                $559,264       $1,118,528      $1,118,528       $1,118,528

Fiscal Detail and Notes
    The Department of Health and Human Services (DHHS) will require General Fund appropriations of $2,798,184 in
    fiscal year 2019-20 and $5,642,972 in fiscal year 2020-21 to amend its rule Chapter 101: MaineCare Benefits Manual,
    Chapter III, Section 67, Principles of Reimbursement for Nursing Facilities no later than January 1, 2020 to include
    the costs of health insurance in the fixed costs component of reimbursement. Federal Expenditures Fund allocations
    will also be required for the FMAP match.

    The Upper Payment Limit (UPL) analysis for Nursing Facilities (NF) indicates that currently the NF payments in
    MaineCare are lower than Medicare by $12.5 million. The annual cost of living adjustments (COLA) for the NF's will
    go into effect on July 1, 2019 and are estimated to increase the payments by $10.6 million. The impact of this change
    on the UPL will be limited by an increase to the Medicare rates to which the MaineCare rates are compared, but
    between the COLA and the cost from this bill, the NF costs will likely go over the UPL threshold. However, based on
    the language in statute (Title 22 §1708 sub-§3, ¶C) the DHHS must establish reimbursement rates that "are consistent
    with federal requirements relative to limits on reimbursement under the federal Social Security Act, Title XIX." Thus,
    the estimate of costs above includes all increases associated with the health insurance moving to fixed costs, with a
    federal match. If this does create a UPL issue, the DHHS will limit the payments to NF's to remain below the federally
    required limits.


                                               LR1962(01) - Fiscal Note - Page 1 of 1
