LCO No. 4114 1 of 11
General Assembly Raised Bill No. 6678
January Session, 2023
LCO No. 4114
Referred to Committee on AGING
Introduced by:
(AGE)
AN ACT CONCERNING NURSING HOME TRANSPARENCY.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2023) (a) Beginning with the cost 1
report year ending on September 30, 2023, and annually thereafter, each 2
nursing home facility, as defined in section 19a-490 of the general 3
statutes, shall submit to the Commissioner of Social Services narrative 4
summaries of expenditures in addition to the cost reports required 5
pursuant to section 17b-340 of the general statutes, as amended by this 6
act. The summaries shall include the percentage of Medicaid funding 7
allocated to the five cost components of allowable costs described in 8
section 17b-340d of the general statutes and include expenditures for 9
each allowable cost component by the nursing home and any related 10
party, as defined in section 17b-340 of the general statutes, as amended 11
by this act. 12
(b) Not later than January 1, 2024, and annually thereafter, the 13
Commissioner of Social Services shall post in a conspicuous area on the 14
department's Internet web site a link to (1) the annual cost reports and 15
the summaries provided by each nursing home facility, (2) comparisons 16 Raised Bill No. 6678
LCO No. 4114 2 of 11
between individual nursing homes by expenditures, and (3) a summary 17
of the average reported expenditures by facility for each category. Any 18
cost report forms utilized by the department shall include a glossary and 19
explanation of the terms used and a description of the categories being 20
reported on, including, but not limited to, plain language explanation of 21
formulas used to determine maximum costs for the five allowable cost 22
components described in section 17b-340d of the general statutes. 23
(c) Any nursing home facility that violates or fails to comply with the 24
provisions of this section shall be fined not more than ten thousand 25
dollars for each incident of noncompliance. The Commissioner of Social 26
Services may offset payments due a facility to collect the penalty. Prior 27
to imposing any penalty pursuant to this subsection, the commissioner 28
shall notify the nursing home facility of the alleged violation and the 29
accompanying penalty and shall permit such facility to request that the 30
department review its findings. A facility shall request such review not 31
later than fifteen days after receipt of the notice of violation from the 32
department. The department shall stay the imposition of any penalty 33
pending the outcome of the review. The commissioner may impose a 34
penalty upon a facility pursuant to this subsection regardless of whether 35
a change in ownership of the facility has taken place since the time of 36
the violation, provided the department issued notice of the alleged 37
violation and the accompanying penalty prior to the effective date of the 38
change in ownership and record of such notice is readily available in a 39
central registry maintained by the department. Payments of fines 40
received pursuant to this subsection shall be deposited in the General 41
Fund and credited to the Medicaid account. 42
Sec. 2. Section 19a-491a of the general statutes is repealed and the 43
following is substituted in lieu thereof (Effective July 1, 2023): 44
(a) A person seeking a license to establish, conduct, operate or 45
maintain a nursing home shall provide the Department of Public Health 46
with the following information: 47
(1) (A) The name and business address of the owner and a statement 48 Raised Bill No. 6678
LCO No. 4114 3 of 11
of whether the owner is an individual, partnership, corporation or other 49
legal entity; (B) the names of the officers, directors, trustees, or 50
managing and general partners of the owner, the names of persons 51
having a ten per cent or greater ownership interest in the owner, and a 52
description of each such person's occupation with the owner; [and] (C) 53
if the owner is a corporation which is incorporated in another state, a 54
certificate of good standing from the secretary of state of the state of 55
incorporation; and (D) if a private equity fund owns any portion of the 56
business, the name of the fund's investment advisor and a copy of the 57
most recent quarterly statement provided to the private fund's 58
investors, including information regarding fees, expenses and 59
performance of the fund; 60
(2) A description of the relevant business experience of the owner and 61
of the administrator of the nursing home and evidence that the 62
administrator has a license issued pursuant to section 19a-514; 63
(3) Affidavits signed by the owner, any of the persons described in 64
subdivision (1) of this subsection, the administrator, assistant 65
administrator, the medical director, the director of nursing and assistant 66
director of nursing disclosing any matter in which such person has been 67
convicted of a felony, as defined in section 53a-25, or has pleaded nolo 68
contendere to a felony charge, or has been held liable or enjoined in a 69
civil action by final judgment, if the felony or civil action involved fraud, 70
embezzlement, fraudulent conversion or misappropriation of property; 71
or is subject to an injunction or restrictive or remedial order of a court of 72
record at the time of application, within the past five years has had any 73
state or federal license or permit suspended or revoked as a result of an 74
action brought by a governmental agency or department, arising out of 75
or relating to health care business activity, including, but not limited to, 76
actions affecting the operation of a nursing home, retirement home, 77
residential care home or any facility subject to sections 17b-520 to 17b-78
535, inclusive, or a similar statute in another state or country; 79
(4) (A) A statement as to whether or not the owner is, or is affiliated 80
with, a religious, charitable or other nonprofit organization; (B) the 81 Raised Bill No. 6678
LCO No. 4114 4 of 11
extent of the affiliation, if any; (C) the extent to which the affiliate 82
organization will be responsible for the financial obligations of the 83
owner; and (D) the provision of the Internal Revenue Code of 1986, or 84
any subsequent corresponding internal revenue code of the United 85
States, as from time to time amended, if any, under which the owner or 86
affiliate is exempt from the payment of income tax; 87
(5) The location and a description of other health care facilities of the 88
owner, existing or proposed, and, if proposed, the estimated completion 89
date or dates and whether or not construction has begun; [and] 90
(6) Audited and certified financial statements of the owner, including 91
(A) a balance sheet as of the end of the most recent fiscal year, and (B) 92
income statements for the most recent fiscal year of the owner or such 93
shorter period of time as the owner shall have been in existence; and 94
[(6)] (7) If the operation of the nursing home has not yet commenced, 95
a statement of the anticipated source and application of the funds used 96
or to be used in the purchase or construction of the home, including: 97
(A) An estimate of such costs as financing expense, legal expense, 98
land costs, marketing costs and other similar costs which the owner 99
expects to incur or become obligated for prior to the commencement of 100
operations; and 101
(B) A description of any mortgage loan or any other financing 102
intended to be used for the financing of the nursing home, including the 103
anticipated terms and costs of such financing. 104
[(b) In addition to the information provided pursuant to subsection 105
(a) of this section, the commissioner may reasonably require an 106
applicant for a nursing home license or renewal of a nursing home 107
license to submit additional information. Such information may include 108
audited and certified financial statements of the owner, including, (1) a 109
balance sheet as of the end of the most recent fiscal year, and (2) income 110
statements for the most recent fiscal year of the owner or such shorter 111
period of time as the owner shall have been in existence.] 112 Raised Bill No. 6678
LCO No. 4114 5 of 11
[(c)] (b) No person acting individually or jointly with any other 113
person shall establish, conduct, operate or maintain a nursing home 114
without maintaining professional liability insurance or other indemnity 115
against liability for professional malpractice. The amount of insurance 116
which such person shall maintain as insurance or indemnity against 117
claims for injury or death for professional malpractice shall be not less 118
than one million dollars for one person, per occurrence, with an 119
aggregate of not less than three million dollars. The requirements of this 120
subsection shall not apply to any person who establishes, conducts, 121
operates or maintains a residential care home. 122
[(d)] (c) A person seeking to renew a nursing home license shall 123
furnish the department with any information required under this 124
section that was not previously submitted and with satisfactory written 125
proof that the owner of the nursing home consents to such renewal, if 126
the owner is different from the person seeking renewal, and shall 127
provide data on any change in the information submitted. The 128
commissioner shall refuse to issue or renew a nursing home license if 129
the person seeking renewal fails to provide the information required 130
under this section. Upon such refusal, the commissioner shall grant such 131
license to the holder of the certificate of need, provided such holder 132
meets all requirements for such licensure. If such holder does not meet 133
such requirements, the commissioner shall proceed in accordance with 134
sections 19a-541 to 19a-549, inclusive. If the commissioner is considering 135
a license renewal application pursuant to an order of the commissioner, 136
the procedures in this subsection shall apply to such consideration. 137
Sec. 3. Subsection (a) of section 17b-340 of the general statutes is 138
repealed and the following is substituted in lieu thereof (Effective July 1, 139
2023): 140
(a) For purposes of this subsection, (1) a "related party" includes, but 141
is not limited to, any company related to a chronic and convalescent 142
nursing home through family association, common ownership, control 143
or business association with any of the owners, operators or officials of 144
such nursing home; (2) "company" means any person, partnership, 145 Raised Bill No. 6678
LCO No. 4114 6 of 11
association, holding company, limited liability company or corporation; 146
(3) "family association" means a relationship by birth, marriage or 147
domestic partnership; and (4) "profit and loss statement" means the 148
most recent annual statement on profits and losses finalized by a related 149
party before the annual report mandated under this subsection. The 150
rates to be paid by or for persons aided or cared for by the state or any 151
town in this state to licensed chronic and convalescent nursing homes, 152
to chronic disease hospitals associated with chronic and convalescent 153
nursing homes, to rest homes with nursing supervision, to licensed 154
residential care homes, as defined by section 19a-490, and to residential 155
facilities for persons with intellectual disability that are licensed 156
pursuant to section 17a-227 and certified to participate in the Title XIX 157
Medicaid program as intermediate care facilities for individuals with 158
intellectual disabilities, for room, board and services specified in 159
licensing regulations issued by the licensing agency shall be determined 160
annually, except as otherwise provided in this subsection by the 161
Commissioner of Social Services, to be effective July first of each year 162
except as otherwise provided in this subsection. Such rates shall be 163
determined on a basis of a reasonable payment for such necessary 164
services, which basis shall take into account as a factor the costs of such 165
services. Cost of such services shall include reasonable costs mandated 166
by collective bargaining agreements with certified collective bargaining 167
agents or other agreements between the employer and employees, 168
provided "employees" shall not include persons employed as managers 169
or chief administrators or required to be licensed as nursing home 170
administrators, and compensation for services rendered by proprietors 171
at prevailing wage rates, as determined by application of principles of 172
accounting as prescribed by said commissioner. Cost of such services 173
shall not include amounts paid by the facilities to employees as salary, 174
or to attorneys or consultants as fees, where the responsibility of the 175
employees, attorneys, or consultants is to persuade or seek to persuade 176
the other employees of the facility to support or oppose unionization. 177
Nothing in this subsection shall prohibit inclusion of amounts paid for 178
legal counsel related to the negotiation of collective bargaining 179
agreements, the settlement of grievances or normal administration of 180 Raised Bill No. 6678
LCO No. 4114 7 of 11
labor relations. The commissioner may, in the commissioner's 181
discretion, allow the inclusion of extraordinary and unanticipated costs 182
of providing services that were incurred to avoid an immediate negative 183
impact on the health and safety of patients. The commissioner may, in 184
the commissioner's discretion, based upon review of a facility's costs, 185
direct care staff to patient ratio and any other related information, revise 186
a facility's rate for any increases or decreases to total licensed capacity 187
of more than ten beds or changes to its number of licensed rest home 188
with nursing supervision beds and chronic and convalescent nursing 189
home beds. The commissioner may, in the commissioner's discretion, 190
revise the rate of a facility that is closing. An interim rate issued for the 191
period during which a facility is closing shall be based on a review of 192
facility costs, the expected duration of the close-down period, the 193
anticipated impact on Medicaid costs, available appropriations and the 194
relationship of the rate requested by the facility to the average Medicaid 195
rate for a close-down period. The commissioner may so revise a facility's 196
rate established for the fiscal year ending June 30, 1993, and thereafter 197
for any bed increases, decreases or changes in licensure effective after 198
October 1, 1989. Effective July 1, 1991, in facilities that have both a 199
chronic and convalescent nursing home and a rest home with nursing 200
supervision, the rate for the rest home with nursing supervision shall 201
not exceed such facility's rate for its chronic and convalescent nursing 202
home. All such facilities for which rates are determined under this 203
subsection shall report on a fiscal year basis ending on September 204
thirtieth. Such report shall be submitted to the commissioner by 205
February fifteenth. Each for-profit chronic and convalescent nursing 206
home that receives state funding pursuant to this section shall include 207
in such annual report a profit and loss statement from each related party 208
that receives from such chronic and convalescent nursing home [fifty 209
thousand dollars or more per year] any amount of income for goods, 210
fees and services. No cause of action or liability shall arise against the 211
state, the Department of Social Services, any state official or agent for 212
failure to take action based on the information required to be reported 213
under this subsection. The commissioner may reduce the rate in effect 214
for a facility that fails to submit a complete and accurate report on or 215 Raised Bill No. 6678
LCO No. 4114 8 of 11
before February fifteenth by an amount not to exceed ten per cent of 216
such rate. If a licensed residential care home fails to submit a complete 217
and accurate report, the department shall notify such home of the failure 218
and the home shall have thirty days from the date the notice was issued 219
to submit a complete and accurate report. If a licensed residential care 220
home fails to submit a complete and accurate report not later than thirty 221
days after the date of notice, such home may not receive a retroactive 222
rate increase, in the commissioner's discretion. The commissioner shall, 223
annually, on or before April first, report the data contained in the reports 224
of such facilities on the department's Internet web site. For the cost 225
reporting year commencing October 1, 1985, and for subsequent cost 226
reporting years, facilities shall report the cost of using the services of any 227
nursing personnel supplied by a temporary nursing services agency by 228
separating said cost into two categories, the portion of the cost equal to 229
the salary of the employee for whom the nursing personnel supplied by 230
a temporary nursing services agency is substituting shall be considered 231
a nursing cost and any cost in excess of such salary shall be further 232
divided so that seventy-five per cent of the excess cost shall be 233
considered an administrative or general cost and twenty-five per cent of 234
the excess cost shall be considered a nursing cost, provided if the total 235
costs of a facility for nursing personnel supplied by a temporary nursing 236
services agency in any cost year are equal to or exceed fifteen per cent 237
of the total nursing expenditures of the facility for such cost year, no 238
portion of such costs in excess of fifteen per cent shall be classified as 239
administrative or general costs. The commissioner, in determining such 240
rates, shall also take into account the classification of patients or 241
boarders according to special care requirements or classification of the 242
facility according to such factors as facilities and services and such other 243
factors as the commissioner deems reasonable, including anticipated 244
fluctuations in the cost of providing such services. The commissioner 245
may establish a separate rate for a facility or a portion of a facility for 246
traumatic brain injury patients who require extensive care but not acute 247
general hospital care. Such separate rate shall reflect the special care 248
requirements of such patients. If changes in federal or state laws, 249
regulations or standards adopted subsequent to June 30, 1985, result in 250 Raised Bill No. 6678
LCO No. 4114 9 of 11
increased costs or expenditures in an amount exceeding one-half of one 251
per cent of allowable costs for the most recent cost reporting year, the 252
commissioner shall adjust rates and provide payment for any such 253
increased reasonable costs or expenditures within a reasonable period 254
of time retroactive to the date of enforcement. Nothing in this section 255
shall be construed to require the Department of Social Services to adjust 256
rates and provide payment for any increases in costs resulting from an 257
inspection of a facility by the Department of Public Health. Such 258
assistance as the commissioner requires from other state agencies or 259
departments in determining rates shall be made available to the 260
commissioner at the commissioner's request. Payment of the rates 261
established pursuant to this section shall be conditioned on the 262
establishment by such facilities of admissions procedures that conform 263
with this section, section 19a-533 and all other applicable provisions of 264
the law and the provision of equality of treatment to all persons in such 265
facilities. The established rates shall be the maximum amount 266
chargeable by such facilities for care of such beneficiaries, and the 267
acceptance by or on behalf of any such facility of any additional 268
compensation for care of any such beneficiary from any other person or 269
source shall constitute the offense of aiding a beneficiary to obtain aid 270
to which the beneficiary is not entitled and shall be punishable in the 271
same manner as is provided in subsection (b) of section 17b-97. 272
Notwithstanding any provision of this section, the Commissioner of 273
Social Services may, within available appropriations, provide an interim 274
rate increase for a licensed chronic and convalescent nursing home or a 275
rest home with nursing supervision for rate periods no earlier than April 276
1, 2004, only if the commissioner determines that the increase is 277
necessary to avoid the filing of a petition for relief under Title 11 of the 278
United States Code; imposition of receivership pursuant to sections 19a-279
542 and 19a-543; or substantial deterioration of the facility's financial 280
condition that may be expected to adversely affect resident care and the 281
continued operation of the facility, and the commissioner determines 282
that the continued operation of the facility is in the best interest of the 283
state. The commissioner shall consider any requests for interim rate 284
increases on file with the department from March 30, 2004, and those 285 Raised Bill No. 6678
LCO No. 4114 10 of 11
submitted subsequently for rate periods no earlier than April 1, 2004. 286
When reviewing an interim rate increase request the commissioner 287
shall, at a minimum, consider: (A) Existing chronic and convalescent 288
nursing home or rest home with nursing supervision utilization in the 289
area and projected bed need; (B) physical plant long-term viability and 290
the ability of the owner or purchaser to implement any necessary 291
property improvements; (C) licensure and certification compliance 292
history; (D) reasonableness of actual and projected expenses; and (E) the 293
ability of the facility to meet wage and benefit costs. No interim rate 294
shall be increased pursuant to this subsection in excess of one hundred 295
fifteen per cent of the median rate for the facility's peer grouping, 296
established pursuant to subdivision (2) of subsection (f) of this section, 297
unless recommended by the commissioner and approved by the 298
Secretary of the Office of Policy and Management after consultation 299
with the commissioner. Such median rates shall be published by the 300
Department of Social Services not later than April first of each year. In 301
the event that a facility granted an interim rate increase pursuant to this 302
section is sold or otherwise conveyed for value to an unrelated entity 303
less than five years after the effective date of such rate increase, the rate 304
increase shall be deemed rescinded and the department shall recover an 305
amount equal to the difference between payments made for all affected 306
rate periods and payments that would have been made if the interim 307
rate increase was not granted. The commissioner may seek recovery of 308
such payments from any facility with common ownership. With the 309
approval of the Secretary of the Office of Policy and Management, the 310
commissioner may waive recovery and rescission of the interim rate for 311
good cause shown that is not inconsistent with this section, including, 312
but not limited to, transfers to family members that were made for no 313
value. The commissioner shall provide written quarterly reports to the 314
joint standing committees of the General Assembly having cognizance 315
of matters relating to aging, human services and appropriations and the 316
budgets of state agencies, that identify each facility requesting an 317
interim rate increase, the amount of the requested rate increase for each 318
facility, the action taken by the commissioner and the secretary pursuant 319
to this subsection, and estimates of the additional cost to the state for 320 Raised Bill No. 6678
LCO No. 4114 11 of 11
each approved interim rate increase. Nothing in this subsection shall 321
prohibit the commissioner from increasing the rate of a licensed chronic 322
and convalescent nursing home or a rest home with nursing supervision 323
for allowable costs associated with facility capital improvements or 324
increasing the rate in case of a sale of a licensed chronic and convalescent 325
nursing home or a rest home with nursing supervision if receivership 326
has been imposed on such home. For purposes of this section, 327
"temporary nursing services agency" and "nursing personnel" have the 328
same meaning as provided in section 19a-118. 329
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2023 New section
Sec. 2 July 1, 2023 19a-491a
Sec. 3 July 1, 2023 17b-340(a)
Statement of Purpose:
To require (1) transparent cost reporting by nursing homes, and (2)
disclosure of private equity ownership by applicants for nursing home
licensure.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]