Sec. 1. 22 MRSA §1708, sub-§3-A is enacted to read:

3-A.__Increases in nursing home compensation.__In addition to rules established under subsection 3, the department shall establish rules concerning reimbursement that:

A.__Ensure that the following increases in nursing home reimbursement are provided for all services rendered on or after July 1, 2002:

(1)__The amount necessary to reimburse nursing home facilities, in the fixed cost component of the Medicaid rate, for the portion of the costs of the health care provider tax imposed by Title 36, chapter 373 allocable to Medicaid-covered services; and

(2)__A statewide increase in per diem reimbursement rates for patient care costs, in an amount that represents an increase relative to reimbursement in effect on June 30, 2002 of not less than $16,300,000 annually in the aggregate, consisting of:

(a)__An increase in the direct care component of the rate to address a portion of the current shortfall in direct care Medicaid revenues relative to the direct care staffing costs of providing care to Medicaid recipients; and

(b)__A supplemental rate component that assists nursing facilities in recruiting and retaining patient care staff and meeting other patient care costs.

"Patient care costs," as used in this subparagraph, means all direct care costs and all routine costs.__ In setting rates to implement this subparagraph, the department shall provide relief for facility losses as equitably as possible and seek to minimize the need for substantial price increases to consumers not covered by Medicaid; and

B.__Ensure that the supplemental rate component of the reimbursement rate provided in paragraph A, subparagraph (2), division (b) is determined and paid on a prospective basis and is not subject to retrospective adjustment.

Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.