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General Assembly Substitute Bill No. 6678
January Session, 2023
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
Internet web site of the Department of Social Services a link to (1) the 15
annual cost reports and the summaries provided by each nursing home 16
facility, (2) comparisons between individual nursing homes by 17
expenditures, and (3) a summary of the average reported expenditures 18
by facility for each category. Any cost report forms utilized by the 19 Substitute Bill No. 6678
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department shall include a glossary and explanation of the terms used 20
and a description of the categories being reported on, including, but not 21
limited to, plain language explanation of formulas used to determine 22
maximum costs for the five allowable cost components described in 23
section 17b-340d of the general statutes. 24
(c) Any nursing home facility that violates or fails to comply with the 25
provisions of this section shall be fined not more than ten thousand 26
dollars for each incident of noncompliance. The Commissioner of Social 27
Services may offset payments due a facility to collect the penalty. Prior 28
to imposing any penalty pursuant to this subsection, the commissioner 29
shall notify the nursing home facility of the alleged violation and the 30
accompanying penalty and shall permit such facility to request that the 31
department review its findings. A facility shall request such review not 32
later than fifteen days after receipt of the notice of violation from the 33
department. The department shall stay the imposition of any penalty 34
pending the outcome of the review. The commissioner may impose a 35
penalty upon a facility pursuant to this subsection regardless of whether 36
a change in ownership of the facility has taken place since the time of 37
the violation, provided the department issued notice of the alleged 38
violation and the accompanying penalty prior to the effective date of the 39
change in ownership and record of such notice is readily available in a 40
central registry maintained by the department. Payments of fines 41
received pursuant to this subsection shall be deposited in the General 42
Fund and credited to the Medicaid account. 43
Sec. 2. Section 19a-491a of the general statutes is repealed and the 44
following is substituted in lieu thereof (Effective July 1, 2023): 45
(a) A person seeking a license to establish, conduct, operate or 46
maintain a nursing home shall provide the Department of Public Health 47
with the following information: 48
(1) (A) The name and business address of the owner and a statement 49
of whether the owner is an individual, partnership, corporation or other 50
legal entity; (B) the names of the officers, directors, trustees, or 51 Substitute Bill No. 6678
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managing and general partners of the owner, the names of persons 52
having a ten per cent or greater ownership interest in the owner, and a 53
description of each such person's occupation with the owner; [and] (C) 54
if the owner is a corporation which is incorporated in another state, a 55
certificate of good standing from the secretary of state of the state of 56
incorporation; and (D) if a private equity fund owns any portion of the 57
business, the name of the fund's investment advisor and a copy of the 58
most recent quarterly statement provided to the private fund's 59
investors, including information regarding fees, expenses and 60
performance of the fund; 61
(2) A description of the relevant business experience of the owner and 62
of the administrator of the nursing home and evidence that the 63
administrator has a license issued pursuant to section 19a-514; 64
(3) Affidavits signed by the owner, any of the persons described in 65
subdivision (1) of this subsection, the administrator, assistant 66
administrator, the medical director, the director of nursing and assistant 67
director of nursing disclosing any matter in which such person has been 68
convicted of a felony, as defined in section 53a-25, or has pleaded nolo 69
contendere to a felony charge, or has been held liable or enjoined in a 70
civil action by final judgment, if the felony or civil action involved fraud, 71
embezzlement, fraudulent conversion or misappropriation of property; 72
or is subject to an injunction or restrictive or remedial order of a court of 73
record at the time of application, within the past five years has had any 74
state or federal license or permit suspended or revoked as a result of an 75
action brought by a governmental agency or department, arising out of 76
or relating to health care business activity, including, but not limited to, 77
actions affecting the operation of a nursing home, retirement home, 78
residential care home or any facility subject to sections 17b-520 to 17b-79
535, inclusive, or a similar statute in another state or country; 80
(4) (A) A statement as to whether or not the owner is, or is affiliated 81
with, a religious, charitable or other nonprofit organization; (B) the 82
extent of the affiliation, if any; (C) the extent to which the affiliate 83
organization will be responsible for the financial obligations of the 84 Substitute Bill No. 6678
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owner; and (D) the provision of the Internal Revenue Code of 1986, or 85
any subsequent corresponding internal revenue code of the United 86
States, as from time to time amended, if any, under which the owner or 87
affiliate is exempt from the payment of income tax; 88
(5) The location and a description of other health care facilities of the 89
owner, existing or proposed, and, if proposed, the estimated completion 90
date or dates and whether or not construction has begun; [and] 91
(6) Audited and certified financial statements of the owner, including 92
(A) a balance sheet as of the end of the most recent fiscal year, and (B) 93
income statements for the most recent fiscal year of the owner or such 94
shorter period of time as the owner shall have been in existence; and 95
[(6)] (7) If the operation of the nursing home has not yet commenced, 96
a statement of the anticipated source and application of the funds used 97
or to be used in the purchase or construction of the home, including: 98
(A) An estimate of such costs as financing expense, legal expense, 99
land costs, marketing costs and other similar costs which the owner 100
expects to incur or become obligated for prior to the commencement of 101
operations; and 102
(B) A description of any mortgage loan or any other financing 103
intended to be used for the financing of the nursing home, including the 104
anticipated terms and costs of such financing. 105
[(b) In addition to the information provided pursuant to subsection 106
(a) of this section, the commissioner may reasonably require an 107
applicant for a nursing home license or renewal of a nursing home 108
license to submit additional information. Such information may include 109
audited and certified financial statements of the owner, including, (1) a 110
balance sheet as of the end of the most recent fiscal year, and (2) income 111
statements for the most recent fiscal year of the owner or such shorter 112
period of time as the owner shall have been in existence.] 113
[(c)] (b) No person acting individually or jointly with any other 114 Substitute Bill No. 6678
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person shall establish, conduct, operate or maintain a nursing home 115
without maintaining professional liability insurance or other indemnity 116
against liability for professional malpractice. The amount of insurance 117
which such person shall maintain as insurance or indemnity against 118
claims for injury or death for professional malpractice shall be not less 119
than one million dollars for one person, per occurrence, with an 120
aggregate of not less than three million dollars. The requirements of this 121
subsection shall not apply to any person who establishes, conducts, 122
operates or maintains a residential care home. 123
[(d)] (c) A person seeking to renew a nursing home license shall 124
furnish the department with any information required under this 125
section that was not previously submitted and with satisfactory written 126
proof that the owner of the nursing home consents to such renewal, if 127
the owner is different from the person seeking renewal, and shall 128
provide data on any change in the information submitted. The 129
commissioner shall refuse to issue or renew a nursing home license if 130
the person seeking renewal fails to provide the information required 131
under this section. Upon such refusal, the commissioner shall grant such 132
license to the holder of the certificate of need, provided such holder 133
meets all requirements for such licensure. If such holder does not meet 134
such requirements, the commissioner shall proceed in accordance with 135
sections 19a-541 to 19a-549, inclusive. If the commissioner is considering 136
a license renewal application pursuant to an order of the commissioner, 137
the procedures in this subsection shall apply to such consideration. 138
Sec. 3. Subsection (a) of section 17b-340 of the general statutes is 139
repealed and the following is substituted in lieu thereof (Effective July 1, 140
2023): 141
(a) For purposes of this subsection, (1) a "related party" includes, but 142
is not limited to, any company related to a chronic and convalescent 143
nursing home through family association, common ownership, control 144
or business association with any of the owners, operators or officials of 145
such nursing home; (2) "company" means any person, partnership, 146
association, holding company, limited liability company or corporation; 147 Substitute Bill No. 6678
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(3) "family association" means a relationship by birth, marriage or 148
domestic partnership; and (4) "profit and loss statement" means the 149
most recent annual statement on profits and losses finalized by a related 150
party before the annual report mandated under this subsection. The 151
rates to be paid by or for persons aided or cared for by the state or any 152
town in this state to licensed chronic and convalescent nursing homes, 153
to chronic disease hospitals associated with chronic and convalescent 154
nursing homes, to rest homes with nursing supervision, to licensed 155
residential care homes, as defined by section 19a-490, and to residential 156
facilities for persons with intellectual disability that are licensed 157
pursuant to section 17a-227 and certified to participate in the Title XIX 158
Medicaid program as intermediate care facilities for individuals with 159
intellectual disabilities, for room, board and services specified in 160
licensing regulations issued by the licensing agency shall be determined 161
annually, except as otherwise provided in this subsection by the 162
Commissioner of Social Services, to be effective July first of each year 163
except as otherwise provided in this subsection. Such rates shall be 164
determined on a basis of a reasonable payment for such necessary 165
services, which basis shall take into account as a factor the costs of such 166
services. Cost of such services shall include reasonable costs mandated 167
by collective bargaining agreements with certified collective bargaining 168
agents or other agreements between the employer and employees, 169
provided "employees" shall not include persons employed as managers 170
or chief administrators or required to be licensed as nursing home 171
administrators, and compensation for services rendered by proprietors 172
at prevailing wage rates, as determined by application of principles of 173
accounting as prescribed by said commissioner. Cost of such services 174
shall not include amounts paid by the facilities to employees as salary, 175
or to attorneys or consultants as fees, where the responsibility of the 176
employees, attorneys, or consultants is to persuade or seek to persuade 177
the other employees of the facility to support or oppose unionization. 178
Nothing in this subsection shall prohibit inclusion of amounts paid for 179
legal counsel related to the negotiation of collective bargaining 180
agreements, the settlement of grievances or normal administration of 181
labor relations. The commissioner may, in the commissioner's 182 Substitute Bill No. 6678
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discretion, allow the inclusion of extraordinary and unanticipated costs 183
of providing services that were incurred to avoid an immediate negative 184
impact on the health and safety of patients. The commissioner may, in 185
the commissioner's discretion, based upon review of a facility's costs, 186
direct care staff to patient ratio and any other related information, revise 187
a facility's rate for any increases or decreases to total licensed capacity 188
of more than ten beds or changes to its number of licensed rest home 189
with nursing supervision beds and chronic and convalescent nursing 190
home beds. The commissioner may, in the commissioner's discretion, 191
revise the rate of a facility that is closing. An interim rate issued for the 192
period during which a facility is closing shall be based on a review of 193
facility costs, the expected duration of the close-down period, the 194
anticipated impact on Medicaid costs, available appropriations and the 195
relationship of the rate requested by the facility to the average Medicaid 196
rate for a close-down period. The commissioner may so revise a facility's 197
rate established for the fiscal year ending June 30, 1993, and thereafter 198
for any bed increases, decreases or changes in licensure effective after 199
October 1, 1989. Effective July 1, 1991, in facilities that have both a 200
chronic and convalescent nursing home and a rest home with nursing 201
supervision, the rate for the rest home with nursing supervision shall 202
not exceed such facility's rate for its chronic and convalescent nursing 203
home. All such facilities for which rates are determined under this 204
subsection shall report on a fiscal year basis ending on September 205
thirtieth. Such report shall be submitted to the commissioner by 206
February fifteenth. Each [for-profit] chronic and convalescent nursing 207
home that receives state funding pursuant to this section shall include 208
in such annual report a profit and loss statement from each related party 209
that receives from such chronic and convalescent nursing home [fifty 210
thousand dollars or more per year] any amount of income for goods, 211
fees and services. No cause of action or liability shall arise against the 212
state, the Department of Social Services, any state official or agent for 213
failure to take action based on the information required to be reported 214
under this subsection. The commissioner may reduce the rate in effect 215
for a facility that fails to submit a complete and accurate report on or 216
before February fifteenth by an amount not to exceed ten per cent of 217 Substitute Bill No. 6678
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such rate. If a licensed residential care home fails to submit a complete 218
and accurate report, the department shall notify such home of the failure 219
and the home shall have thirty days from the date the notice was issued 220
to submit a complete and accurate report. If a licensed residential care 221
home fails to submit a complete and accurate report not later than thirty 222
days after the date of notice, such home may not receive a retroactive 223
rate increase, in the commissioner's discretion. The commissioner shall, 224
annually, on or before April first, report the data contained in the reports 225
of such facilities on the department's Internet web site. For the cost 226
reporting year commencing October 1, 1985, and for subsequent cost 227
reporting years, facilities shall report the cost of using the services of any 228
nursing personnel supplied by a temporary nursing services agency by 229
separating said cost into two categories, the portion of the cost equal to 230
the salary of the employee for whom the nursing personnel supplied by 231
a temporary nursing services agency is substituting shall be considered 232
a nursing cost and any cost in excess of such salary shall be further 233
divided so that seventy-five per cent of the excess cost shall be 234
considered an administrative or general cost and twenty-five per cent of 235
the excess cost shall be considered a nursing cost, provided if the total 236
costs of a facility for nursing personnel supplied by a temporary nursing 237
services agency in any cost year are equal to or exceed fifteen per cent 238
of the total nursing expenditures of the facility for such cost year, no 239
portion of such costs in excess of fifteen per cent shall be classified as 240
administrative or general costs. The commissioner, in determining such 241
rates, shall also take into account the classification of patients or 242
boarders according to special care requirements or classification of the 243
facility according to such factors as facilities and services and such other 244
factors as the commissioner deems reasonable, including anticipated 245
fluctuations in the cost of providing such services. The commissioner 246
may establish a separate rate for a facility or a portion of a facility for 247
traumatic brain injury patients who require extensive care but not acute 248
general hospital care. Such separate rate shall reflect the special care 249
requirements of such patients. If changes in federal or state laws, 250
regulations or standards adopted subsequent to June 30, 1985, result in 251
increased costs or expenditures in an amount exceeding one-half of one 252 Substitute Bill No. 6678
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per cent of allowable costs for the most recent cost reporting year, the 253
commissioner shall adjust rates and provide payment for any such 254
increased reasonable costs or expenditures within a reasonable period 255
of time retroactive to the date of enforcement. Nothing in this section 256
shall be construed to require the Department of Social Services to adjust 257
rates and provide payment for any increases in costs resulting from an 258
inspection of a facility by the Department of Public Health. Such 259
assistance as the commissioner requires from other state agencies or 260
departments in determining rates shall be made available to the 261
commissioner at the commissioner's request. Payment of the rates 262
established pursuant to this section shall be conditioned on the 263
establishment by such facilities of admissions procedures that conform 264
with this section, section 19a-533 and all other applicable provisions of 265
the law and the provision of equality of treatment to all persons in such 266
facilities. The established rates shall be the maximum amount 267
chargeable by such facilities for care of such beneficiaries, and the 268
acceptance by or on behalf of any such facility of any additional 269
compensation for care of any such beneficiary from any other person or 270
source shall constitute the offense of aiding a beneficiary to obtain aid 271
to which the beneficiary is not entitled and shall be punishable in the 272
same manner as is provided in subsection (b) of section 17b-97. 273
Notwithstanding any provision of this section, the Commissioner of 274
Social Services may, within available appropriations, provide an interim 275
rate increase for a licensed chronic and convalescent nursing home or a 276
rest home with nursing supervision for rate periods no earlier than April 277
1, 2004, only if the commissioner determines that the increase is 278
necessary to avoid the filing of a petition for relief under Title 11 of the 279
United States Code; imposition of receivership pursuant to sections 19a-280
542 and 19a-543; or substantial deterioration of the facility's financial 281
condition that may be expected to adversely affect resident care and the 282
continued operation of the facility, and the commissioner determines 283
that the continued operation of the facility is in the best interest of the 284
state. The commissioner shall consider any requests for interim rate 285
increases on file with the department from March 30, 2004, and those 286
submitted subsequently for rate periods no earlier than April 1, 2004. 287 Substitute Bill No. 6678
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When reviewing an interim rate increase request the commissioner 288
shall, at a minimum, consider: (A) Existing chronic and convalescent 289
nursing home or rest home with nursing supervision utilization in the 290
area and projected bed need; (B) physical plant long-term viability and 291
the ability of the owner or purchaser to implement any necessary 292
property improvements; (C) licensure and certification compliance 293
history; (D) reasonableness of actual and projected expenses; and (E) the 294
ability of the facility to meet wage and benefit costs. No interim rate 295
shall be increased pursuant to this subsection in excess of one hundred 296
fifteen per cent of the median rate for the facility's peer grouping, 297
established pursuant to subdivision (2) of subsection (f) of this section, 298
unless recommended by the commissioner and approved by the 299
Secretary of the Office of Policy and Management after consultation 300
with the commissioner. Such median rates shall be published by the 301
Department of Social Services not later than April first of each year. In 302
the event that a facility granted an interim rate increase pursuant to this 303
section is sold or otherwise conveyed for value to an unrelated entity 304
less than five years after the effective date of such rate increase, the rate 305
increase shall be deemed rescinded and the department shall recover an 306
amount equal to the difference between payments made for all affected 307
rate periods and payments that would have been made if the interim 308
rate increase was not granted. The commissioner may seek recovery of 309
such payments from any facility with common ownership. With the 310
approval of the Secretary of the Office of Policy and Management, the 311
commissioner may waive recovery and rescission of the interim rate for 312
good cause shown that is not inconsistent with this section, including, 313
but not limited to, transfers to family members that were made for no 314
value. The commissioner shall provide written quarterly reports to the 315
joint standing committees of the General Assembly having cognizance 316
of matters relating to aging, human services and appropriations and the 317
budgets of state agencies, that identify each facility requesting an 318
interim rate increase, the amount of the requested rate increase for each 319
facility, the action taken by the commissioner and the secretary pursuant 320
to this subsection, and estimates of the additional cost to the state for 321
each approved interim rate increase. Nothing in this subsection shall 322 Substitute Bill No. 6678
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prohibit the commissioner from increasing the rate of a licensed chronic 323
and convalescent nursing home or a rest home with nursing supervision 324
for allowable costs associated with facility capital improvements or 325
increasing the rate in case of a sale of a licensed chronic and convalescent 326
nursing home or a rest home with nursing supervision if receivership 327
has been imposed on such home. For purposes of this section, 328
"temporary nursing services agency" and "nursing personnel" have the 329
same meaning as provided in section 19a-118. 330
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 Legislative Commissioners:
In Section 1(b), "department's Internet web site" was changed to
"Internet web site of the Department of Social Services" for clarity.
AGE Joint Favorable Subst.