Maine DHHS Announces MaineCare Rate Increases to Accelerate Cost of Living Adjustments and Raise Direct Support Worker Wages in January

December 30, 2021

Today, the Maine Department of Health and Human Services (DHHS) announced its proposal to raise MaineCare rates in January for many home- and community-based services (HCBS), accelerating higher rates initially planned for July 1, 2022 and supporting providers in increasing pay for direct care workers to at least 125 percent of the state’s minimum wage.

The accelerated rates beginning on January 1, 2022 include “cost-of-living adjustments” to help certain HCBS providers (under MaineCare Sections 12, 18, 19, 20, 21, 29, and 96) to address rising costs. The Governor included these cost-of-living adjustments in the current biennial budget, among others, as a component of comprehensive MaineCare reforms. The budget also includes January rate increases added by the Legislature to enable MaineCare providers to pay direct support workers at least 125 percent of minimum wage. 

DHHS proposes to align the cost-of-living adjustment with the minimum wage provision in January to help providers address increased labor and other costs associated with the pandemic, and to avoid the administrative burden and confusion of changing the same rates twice within six months. In addition, due to factors such as higher than expected inflation, the Department has determined that additional funding is needed beyond the originally appropriated amounts to ensure that MaineCare payment rates support at least 125 percent of minimum wage and that cost-of-living adjustments reflect actual cost increases. As such, the Governor will submit as part of her FY22 supplemental budget proposal a request for $27.9 million from the General Fund, which, when taken with Federal funding, would amount to an additional $82.2 million in this biennium.

This is in addition to the historic MaineCare investments made by Governor Mills and the Maine State Legislature, including for the providers of long-term services and supports for older Mainers, people with behavioral health challenges, and adults with intellectual or physical disabilities. Altogether, the biennial budget increases MaineCare payment rates across these and other services by over $500 million, including Federal matching payments.

One set of MaineCare providers that will especially benefit from the changes announced today are Section 21 home- and community-based care waiver providers. These providers serve people with intellectual disabilities or autism who require comprehensive services. 

  • The new supplemental budget initiative the Department is now proposing would result in an increase for Section 21 providers of $46.4 million, out of the $82.2 million total, as a result of the acceleration of the cost-of-living increase, and the full funding of the 125 percent of minimum wage provision. 
  • This would supplement the $15.6 million that is already in the biennial budget for Section 21 for these adjustments.
  • In addition to these rate increases, under both the 129th and the 130th Legislative sessions, the Department advanced other Section 21 rate increases that went into effect January 1, 2021 and July 1, 2021, at a total cost in this biennium of $73.2 million. 

In total across all these rate adjustments, Section 21 providers will receive $135.2 million more in fiscal years 2022 and 2023 as a result of these actions. 

Numerous other providers of behavioral health and long-term services and supports will also receive additional support.  

  • Cost-of-living adjustments for Sections 2, 13, 17, 23, 26, 28, 30, 65, 91, 92, 93, 97 Appendix D Therapeutic Foster Care services, 97 Appendix F, and 102 are scheduled for July 1, 2022. 
  • Calendar year 2022 monthly supplemental payments for Section 17, 28, and 65 will be effective January 1, 2022, using amounts as appropriated by the Legislature under Part AAAA of the budget. The Department will conduct rate studies for Sections 17, 28, and 65 during calendar year 2022 to determine appropriate ongoing rate adjustments to be effective January 1, 2023 to support wages of at least 125 percent of minimum wage.

Furthermore, these ongoing payment increases will be supplemented by one-time bonus payments DHHS expects to provide early in 2022 as part of Maine’s Home- and Community-Based Care Plan under the American Rescue Plan.These bonus payments, estimated to total up to $126 million, aim to address COVID-related, short-term health care worker shortages.

These short-run bonus payments closely align with the health care workforce priorities included in Governor Janet Mills’ Maine Jobs and Recovery Plan. The Plan advances career pathway development, on-the-job training opportunities, and “stackable” credits for workers entering the fields of long-term services and supports among others. The Plan includes a $500,000 multimedia campaign that promotes direct support worker jobs as a career choice and targets younger and older workers to join the field.