Sec. 1. 22 MRSA §§1720 and 1721 are enacted to read:

§1720.__Return on equity for nursing facilities and private

nonmedical institutions

A nursing facility, as defined in section 1812-A or any portion of a hospital or institution operating as a nursing facility, is entitled to reimbursement through the MaineCare program to provide a return on equity capital.__A private nonmedical institution also is entitled to reimbursement through the MaineCare program to provide a return on equity capital.__For proprietary providers, this return on equity must provide a reasonable return on equity capital invested and used in the provision of resident care and is entitled to be reimbursed as a fixed cost.__The amount on an annual basis for proprietary providers must be a rate equal to the one-year United States Treasury bill rate plus 1%.__For nonprofit providers, the return on equity must be 1/2 of the rate applicable to proprietary nursing facilities.__The department may adopt rules to implement this section.__Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2- A.__These rules must restore pertinent provisions of former MaineCare rules regarding return on equity, modified to reflect the rates set forth in this section.

§1721.__Nursing facility medical director reimbursement

The department shall include in its calculation of reimbursement for services provided by a nursing facility under section 1720 an allowance for the cost of a medical director in a base year amount not to exceed $10,000, with such amount being subject to an annual cost-of-living adjustment.

Sec. 2. 22 MRSA §1826, sub-§2, ¶¶G and I, as enacted by PL 1985, c. 291, §1, are amended to read:

G. No contract or agreement may require the resident to authorize the facility or its staff to manage, hold or otherwise control the income or other assets of a resident, except that a facility may require a resident or the resident's legal representative, including, but not limited to, a guardian, conservator, power of attorney, responsible party or agent, to enter into and comply with contracts or agreements that reasonably ensure timely payment of the resident's financial obligations to the facility. These provisions may establish a duty to apply the resident's financial resources in a reasonable and financially prudent manner, giving highest priority to paying for the nursing