Previous PageTable Of ContentsNext Page

PUBLIC LAWS
Second Regular Session of the 122nd

CHAPTER 588
H.P. 1368 - L.D. 1951

An Act To Establish Guidelines and Criteria for Audits Conducted by the Department of Health and Human Services

     Emergency preamble. Whereas, acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and

     Whereas, the Department of Health and Human Services' auditing practices affect the dollar amount returned to the State by providers of health care and other community services; and

     Whereas, this legislation must take effect before the expiration of the 90-day period so that its benefits are realized as soon as possible; and

     Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 5 MRSA §1660-I, sub-§2, ¶A, as enacted by PL 1995, c. 402, Pt. C, §2, is amended to read:

     Sec. 2. 22 MRSA §41-B is enacted to read:

§41-B.     Auditing and adjusting of health care and community service provider costs

     This section governs the rules of the department and the practices of its auditors in interpreting and applying those rules with respect to payments for providers under the MaineCare program and payments by the department under grants and agreements audited pursuant to the Maine Uniform Accounting and Auditing Practices Act for Community Agencies.

     1. Revised audit interpretations to be applied prospectively. Whenever the department's auditors revise an interpretation of a rule, agreement, circular or guideline in a manner that would result in a negative adjustment of a provider's or agency's allowable costs, the revised interpretation may be applied only to provider or agency fiscal years beginning after the date of the examination report, audit report or other written notification in which the provider or agency receives direct notice of the revised interpretation. For the fiscal year to which the report containing the revised interpretation applies, and any subsequent fiscal year ending prior to the issuance of the revised interpretation, the cost that is the subject of the revised interpretation must be considered allowable to the extent that it was allowable under the interpretation previously applied by the Office of Audit for MaineCare and Social Services, referred to in this section as "the office of audit." This subsection does not prohibit the office of audit from applying an adjustment to a fiscal year solely because that cost was not disallowed in a prior year.

     2. Determination of "ordinary," "necessary" and "reasonable" costs. In making findings concerning whether a cost is "ordinary," "necessary" and "reasonable," the office of audit shall consider the following criteria in conjunction with applicable state and federal rules, regulations, guidelines and agreements:

     3. Employee compensation and benefit costs. In evaluating whether employee wages, salaries and benefits are reasonable and allowable, the department may not disallow the costs of any employee benefits, wages or salaries if the total of those costs is reasonable under the criteria set forth in subsection 2.

     4. Other expenses. The department shall modify its rules governing MaineCare reimbursement and other reimbursements pursuant to grants, contracts or agreements for health care providers and other agencies providing community services to allow, to the extent permitted by applicable federal law, the costs of employee information publications, health or first-aid clinics or infirmaries, recreational activities, employee counseling services and any other expenses incurred in accordance with the health care provider or other agency's established practice or custom for the improvement of working conditions, employer-employee relations, employee morale and employee performance.

     Sec. 3. 22 MRSA §42, sub-§7, ¶A, as enacted by PL 2001, c. 666, Pt. C, §1, is amended to read:

     Sec. 4. 22 MRSA §42, sub-§7, ¶F, as enacted by PL 2003, c. 419, §2, is amended to read:

     Sec. 5. Rules; effective date. The Department of Health and Human Services shall amend its rules governing reimbursement, contracting, grants, payments, cost reports and audits with respect to providers of health and community services to ensure that all of the requirements of this Act are applied to all audits completed on or after the effective date of this Act. Unless the law requiring the department to adopt or amend these rules indicates otherwise, rules adopted pursuant to this section are routine technical rules as defined in the Maine Revised Statutes, Title 5, chapter 375, subchapter 2-A. The department shall complete its rulemaking pursuant to this section no later than December 15, 2006. From the effective date of this Act until the date the rule amendments adopted pursuant to this section take effect, the department shall apply the requirements and principles established in this Act to all audits conducted under its existing rules. In the event of any conflict between those rules and this Act, the provisions of this Act supersede the rules.

     Sec. 6. Studies and reports; timing of audits; technical assistance; cost reimbursement. The Department of Health and Human Services, Office of Audit for MaineCare and Social Services shall complete the following studies and reports.

     1. Timing of audits. The Department of Health and Human Services, Office of Audit for MaineCare and Social Services shall review its procedures and criteria for audit activity for the purpose of identifying means of improving the timeliness of its audit determinations, with the goals of issuing an audit report or examination report within 12 months of the filing of a cost report or financial statement with supporting schedules, as the case may be, and achieving this improvement in timeliness within existing personnel and other resources.

By January 15, 2008, the department shall report to the joint standing committee of the Legislature having jurisdiction over health and human services matters on the department's findings concerning the feasibility of meeting the goals set forth in this subsection. If the department finds that these goals cannot be met, the department shall further report on the period of time within which audits can regularly be completed using existing resources and the estimated additional resources required to achieve the goal of issuing all audit or examination reports within 12 months.

     2. Training and technical assistance for providers. The Department of Health and Human Services, Office of Audit for MaineCare and Social Services shall review, in consultation with representatives of mental health, mental retardation, substance abuse and long-term care providers, its existing programs of training for providers to determine whether those programs are sufficient to provide complete and current information, on an ongoing basis, regarding the process of auditing cost reports and agreement settlements and the substantive standards and interpretations to be applied in conducting such audits. The office shall identify, with reasonable frequency, the programmatic changes needed to ensure that sufficient training is available to all categories of care providers and to independent public accountants providing services to such providers and that a system is in place to make available to providers, on request, knowledgeable members of its staff to provide such technical assistance as providers may require in order to achieve compliance with the standards applied by the office. By January 15, 2008, the department shall report to the joint standing committee of the Legislature having jurisdiction over health and human services matters on its findings and on the dates by which the necessary programmatic changes will be implemented.

     3. Consistency in cost reimbursement. The Department of Health and Human Services shall review its rules governing cost reimbursement of health care providers to identify the substantial inconsistencies among those rules in the definitions of "ordinary," "necessary" and "reasonable" costs that are allowable and the criteria concerning and the limitations on reimbursement thereof, including the assignment of costs to various rate components. The department shall consult with providers and report to the joint standing committee of the Legislature having jurisdiction over health and human services matters regarding methods and procedures that the department may adopt and follow to ensure that consistency among these rules is achieved and maintained as policy changes occur. The department shall complete its review and report by January 1, 2007.

     4. Implementing legislation. Following its receipt and review of each report described in this section, the joint standing committee of the Legislature having jurisdiction over health and human services matters may report to the Legislature such recommended legislation as may be necessary to accomplish the objectives addressed in the reports.

     Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.

Effective April 14, 2006.

Revisor of Statutes Homepage Subject Index Search 122nd Laws of Maine Maine Legislature

About the 2nd Regular & 2nd Special Session Laws Of Maine

Previous PageTop Of PageTable Of ContentsNext Page

Office of the Revisor of Statutes
State House, Room 108
Augusta, Maine 04333

Contact the Office of the Revisor of Statutes