Sec. 1. 22 MRSA §303, sub-§12-C is enacted to read:

12-C.__Nursing facility flex bed.__"Nursing facility flex bed" means any bed defined under section 1812-I.

Sec. 2. 22 MRSA §304-A, sub-§8-A, as enacted by PL 1997, c. 689, Pt. B, §10 and affected by Pt. C, §2, is amended to read:

8-A. Nursing facilities. The obligation by a nursing facility, when related to nursing services provided by the nursing facility, of any capital expenditures of $500,000 or more, as adjusted pursuant to section 305-A.

A certificate of need is not required for a nursing facility to convert beds used for the provision of nursing services to beds to be used for the provision of residential care services. If such a conversion occurs, public funds are not obligated for payment of services provided in the converted beds; and.

A certificate of need is not required for a nursing facility to use nursing facility flex beds; and

Sec. 3. 22 MRSA §1708, sub-§3, ¶C, as amended by PL 1995, c. 696, Pt. A, §32, is further amended to read:

C. Are consistent with federal requirements relative to limits on reimbursement under the federal Social Security Act, Title XIX; and

Sec. 4. 22 MRSA §1708, sub-§3, ¶D, as enacted by PL 1995, c. 696, Pt. A, §33, is amended to read:

D. Ensure that any calculation of an occupancy percentage or other basis for adjusting the rate of reimbursement for nursing facility services to reduce the amount paid in response to a decrease in the number of residents in the facility or the percentage of the facility's occupied beds excludes all beds that the facility has removed from service for all or part of the relevant fiscal period in accordance with section 304-F. If the excluded beds are converted to residential care beds or another program for which the department provides reimbursement, nothing in this paragraph precludes the department from including those beds for purposes of any occupancy standard applicable to the residential care or other program pursuant to duly adopted rules of the department.; and

Sec. 5. 22 MRSA §1708, sub-§3, ¶E is enacted to read: