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
			FY 2019-20	FY 2020-21	Projections  FY 2021-22	Projections  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.