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OLR Bill Analysis
sHB 6678 (as amended by House "A")*
AN ACT CONCERNING NURSING HOME TRANSPARENCY.
SUMMARY
This bill makes various changes related to nursing home oversight
and the information these homes must give state agencies. It requires (1)
nursing homes to submit to the Department of Social Services (DSS)
narrative summaries of certain expenditures, in addition to their
annually required cost reports, and (2) DSS to post this information on
its website. The bill subjects nursing homes that fail to do so to a fine of
up to $10,000 per incident.
The bill expands the information that nursing home licensure
applicants must give to the Department of Public Health (DPH) to
include (1) information on any private equity fund that owns any part
of the home, the name of the fund’s investment advisor, and a copy of
the most recent quarterly statement given to the private fund’s
investors, including information on fees, expenses, and the fund’s
performance, and (2) the owner’s audited and certified financial
statements. The financial statement must include a balance sheet from
the end of the most recent fiscal year and income statements from the
most recent fiscal year (or an applicable shorter period if the owner has
not existed for a full fiscal year). Existing law, unchanged by the bill,
allows the DPH commissioner to require an applicant to submit
additional information, including these statements.
The bill broadens certain reporting requirements for chronic and
convalescent nursing homes that receive Medicaid funding. Current law
requires these types of for-profit homes to include in their annual
reports a profit and loss statement from each related party (i.e., a
company related to the home through family association, common
ownership, control, or business association with the home’s owners or 2023HB-06678-R010670-BA.DOCX
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operators) that receives at least $50,000 of income from the home per
year. The bill extends the requirement to all of these types of nursing
homes, not just for-profits.
The bill also requires the DSS commissioner to develop a guidebook
that at least includes a glossary and a plain language (1) description of
the Medicaid nursing home rate setting process and (2) explanation of
terms related to it. The commissioner must post the guidebook in a
conspicuous place on the agency’s website by July 1, 2024, and may
update it as needed.
*House Amendment “A” (1) changes the information required in
nursing homes’ expenditure narrative summaries, (2) requires the
commissioner to develop a Medicaid nursing home rate setting
guidebook, and (3) removes provisions that would have (a) allowed the
DSS commissioner to collect penalties by offsetting payments due to a
facility and (b) eliminated the income threshold at which nursing homes
must report third-party expenditures.
EFFECTIVE DATE: July 1, 2023, except that the requirement for the
DSS commissioner to develop a Medicaid nursing home rate setting
guidebook is effective upon passage.
COST REPORTING REQUIREMEN TS
Beginning with the current cost reporting year, the bill requires
nursing homes to annually submit narrative summaries of cost
expenditures to the DSS commissioner, alongside their statutorily
required cost reports. The summaries must include (1) profit and loss
statements for the preceding three cost report years, (2) total revenue,
(3) total expenditures, (4) total assets, (5) total liabilities, (6) short-term
debt, (7) long-term debt, and (8) cash flows from investing, operating,
and financing activities. Starting by January 1, 2024, the DSS
commissioner must annually post these cost reports and summaries for
each nursing home in a conspicuous place on the agency’s website.
The bill requires a nursing home that fails to comply with this
reporting requirement to be fined up to $10,000. Before imposing a 2023HB-06678-R010670-BA.DOCX
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penalty, the social services commissioner must notify the nursing home
about the violation and allow it to request a review. The home must
request a review within 15 days after receiving the notice, and DSS
cannot impose the penalty while the review is pending.
Under the bill, the penalty may be imposed even if the nursing
home’s ownership changes after the violation takes place, as long as DSS
issued the notice about the violation before the change in ownership
became effective and the record of the notice is readily available in a
central registry maintained by DSS. Payments made for these penalties
must be deposited in the General Fund and credited to the Medicaid
account.
COMMITTEE ACTION
Aging Committee
Joint Favorable Substitute
Yea 15 Nay 0 (02/28/2023)