Payments will help facilities address rising costs and workforce challenges
AUGUSTA – The Maine Department of Health and Human Services (DHHS) announced today that it has issued $30 million in one-time Medicaid (MaineCare) payments to Maine nursing facilities to help them address unforeseen increases in staffing and other operating expenses in the wake of the pandemic.
The State and Federal matching funding, provided through the supplemental budget passed by the Legislature and signed by Governor Mills in April, was distributed to eligible nursing facilities last week, based on each facility's Medicaid (MaineCare) costs and direct care hours in 2023.
"This $30 million 'extraordinary circumstance allowance' payment means Maine's nursing facilities can use this funding to offset both past and expected costs, including for direct care staff, capital costs, and other expenses," said Sara Gagné-Holmes, Acting Commissioner of the Department of Health and Human Services. "As with prior supplemental payments the Department has issued to nursing facilities, the funding is intended to help stabilize the industry and support care for MaineCare members."
"The Maine Health Care Association is very grateful to the Mills Administration and the legislature for providing this necessary support to nursing homes that are continuing to struggle with inflation and a historic labor shortage," said Angela Westhoff, President and CEO of the Maine Health Care Association. "We're hopeful that next year's reformed reimbursement model will provide the sustained resources needed to ensure that Maine's older adults continue to have access to the care they deserve."
The payment issued last week is part of the Mills Administration's substantial investment in nursing facilities, culminating in a reform of nursing facility reimbursement rates through MaineCare that takes effect January 1, 2025. These rate reforms look beyond the immediate term to support the direct care workforce, incentivize permanent staff, and promote quality care and positive health outcomes for Maine residents who live in nursing facilities.
The reforms disincentivize the long-term use of temporary staff and promote permanent employment and salaries of nurses and nursing assistants. This builds on other efforts to support direct care staff in residential and home- and community-based settings such as a law that ensures rates support at least 125 percent of minimum wage for such workers, and an investment in training and workforce development. These efforts contributed to Maine being in the top five of states on direct care worker policies and supports.
The reforms are funded through the supplemental budget, which includes a new Nursing Facility Reform Transition Fund to support nursing facilities as MaineCare phases in these comprehensive rate changes. Funded with $72.8 million ($27.6 million state share) from the supplemental budget, the Fund spans three years from 2025 to 2027, to support time-limited payment policies to all eligible facilities that reward quality or assist with the transition to permanent staffing targets, for example. This investment is in addition to $29 million provided previously for rate reform efforts as well as $10 million ($3.2 million general fund) that was additionally provided in the supplemental budget earlier this year.
This builds on the more than 50 percent increase in average MaineCare rates for nursing facilities from 2019 to 2024. Additionally, a 4.9 percent cost of living increase was provided to facilities starting on July 1, 2024. In addition to rate increases, nursing facilities have received substantial supplemental payments over the years to support operations, including $19 million in December 2023 to support direct care workers.