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General Assembly Substitute Bill No. 1109
January Session, 2023
AN ACT CONCERNING MEDICAID REIMBURSEMENT TO
COMMUNITY LIVING ARRANGEMENTS, INTERMEDIATE CARE
FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES,
RESIDENTIAL CARE HOMES AND NURSING FACILITIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 17b-244 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2023): 2
(a) The room and board component of the rates to be paid by the 3
state to private facilities and facilities operated by regional education 4
service centers which are licensed to provide residential care pursuant 5
to section 17a-227, but not certified to participate in the Title XIX 6
Medicaid program as intermediate care facilities for individuals with 7
intellectual disabilities, shall be determined annually by the 8
Commissioner of Social Services. [, except that rates effective April 30, 9
1989, shall remain in effect through October 31, 1989. Any facility with 10
real property other than land placed in service prior to July 1, 1991, 11
shall, for the fiscal year ending June 30, 1995, receive a rate of return on 12
real property equal to the average of the rates of return applied to real 13
property other than land placed in service for the five years preceding 14
July 1, 1993.] For the fiscal year ending June 30, 1996, and any 15
succeeding fiscal year, the rate of return on real property for property 16
items shall be revised every five years. The commissioner shall, upon 17 Substitute Bill No. 1109
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submission of a request by such facility, allow actual debt service, 18
comprised of principal and interest, on the loan or loans in lieu of 19
property costs allowed pursuant to section 17-313b-5 of the regulations 20
of Connecticut state agencies, whether actual debt service is higher or 21
lower than such allowed property costs, provided such debt service 22
terms and amounts are reasonable in relation to the useful life and the 23
base value of the property. In the case of facilities financed through the 24
Connecticut Housing Finance Authority, the commissioner shall allow 25
actual debt service, comprised of principal, interest and a reasonable 26
repair and replacement reserve on the loan or loans in lieu of property 27
costs allowed pursuant to section 17-313b-5 of the regulations of 28
Connecticut state agencies, whether actual debt service is higher or 29
lower than such allowed property costs, provided such debt service 30
terms and amounts are determined by the commissioner at the time 31
the loan is entered into to be reasonable in relation to the useful life 32
and base value of the property. The commissioner may allow fees 33
associated with mortgage refinancing provided such refinancing will 34
result in state reimbursement savings, after comparing costs over the 35
terms of the existing proposed loans. For the fiscal year ending June 30, 36
1992, the inflation factor used to determine rates shall be one-half of 37
the gross national product percentage increase for the period between 38
the midpoint of the cost year through the midpoint of the rate year. For 39
fiscal year ending June 30, 1993, the inflation factor used to determine 40
rates shall be two-thirds of the gross national product percentage 41
increase from the midpoint of the cost year to the midpoint of the rate 42
year. For the fiscal years ending June 30, 1996, and June 30, 1997, no 43
inflation factor shall be applied in determining rates. The 44
Commissioner of Social Services shall prescribe uniform forms on 45
which such facilities shall report their costs. Such rates shall be 46
determined on the basis of a reasonable payment for necessary 47
services. Any increase in grants, gifts, fund-raising or endowment 48
income used for the payment of operating costs by a private facility in 49
the fiscal year ending June 30, 1992, shall be excluded by the 50
commissioner from the income of the facility in determining the rates 51
to be paid to the facility for the fiscal year ending June 30, 1993, 52 Substitute Bill No. 1109
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provided any operating costs funded by such increase shall not 53
obligate the state to increase expenditures in subsequent fiscal years. 54
Nothing contained in this section shall authorize a payment by the 55
state to any such facility in excess of the charges made by the facility 56
for comparable services to the general public. The service component 57
of the rates to be paid by the state to private facilities and facilities 58
operated by regional education service centers which are licensed to 59
provide residential care pursuant to section 17a-227, but not certified 60
to participate in the Title XIX Medicaid programs as intermediate care 61
facilities for individuals with intellectual disabilities, shall be 62
determined annually by the Commissioner of Developmental Services 63
in accordance with section 17b-244a. For the fiscal year ending June 30, 64
2008, no facility shall receive a rate that is more than two per cent 65
greater than the rate in effect for the facility on June 30, 2007, except 66
any facility that would have been issued a lower rate effective July 1, 67
2007, due to interim rate status or agreement with the department, 68
shall be issued such lower rate effective July 1, 2007. For the fiscal year 69
ending June 30, 2009, no facility shall receive a rate that is more than 70
two per cent greater than the rate in effect for the facility on June 30, 71
2008, except any facility that would have been issued a lower rate 72
effective July 1, 2008, due to interim rate status or agreement with the 73
department, shall be issued such lower rate effective July 1, 2008. For 74
the fiscal years ending June 30, 2010, and June 30, 2011, rates in effect 75
for the period ending June 30, 2009, shall remain in effect until June 30, 76
2011, except that (1) the rate paid to a facility may be higher than the 77
rate paid to the facility for the period ending June 30, 2009, if a capital 78
improvement required by the Commissioner of Developmental 79
Services for the health or safety of the residents was made to the 80
facility during the fiscal years ending June 30, 2010, or June 30, 2011, 81
and (2) any facility that would have been issued a lower rate for the 82
fiscal year ending June 30, 2010, or June 30, 2011, due to interim rate 83
status or agreement with the department, shall be issued such lower 84
rate. For the fiscal year ending June 30, 2012, rates in effect for the 85
period ending June 30, 2011, shall remain in effect until June 30, 2012, 86
except that (A) the rate paid to a facility may be higher than the rate 87 Substitute Bill No. 1109
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paid to the facility for the period ending June 30, 2011, if a capital 88
improvement required by the Commissioner of Developmental 89
Services for the health or safety of the residents was made to the 90
facility during the fiscal year ending June 30, 2012, and (B) any facility 91
that would have been issued a lower rate for the fiscal year ending 92
June 30, 2012, due to interim rate status or agreement with the 93
department, shall be issued such lower rate. Any facility that has a 94
significant decrease in land and building costs shall receive a reduced 95
rate to reflect such decrease in land and building costs. The rate paid to 96
a facility may be increased if a capital improvement approved by the 97
Department of Developmental Services, in consultation with the 98
Department of Social Services, for the health or safety of the residents 99
was made to the facility during the fiscal year ending June 30, 2014, or 100
June 30, 2015, only to the extent such increases are within available 101
appropriations. For the fiscal years ending June 30, 2016, and June 30, 102
2017, rates shall not exceed those in effect for the period ending June 103
30, 2015, except the rate paid to a facility may be higher than the rate 104
paid to the facility for the period ending June 30, 2015, if a capital 105
improvement approved by the Department of Developmental Services, 106
in consultation with the Department of Social Services, for the health 107
or safety of the residents was made to the facility during the fiscal year 108
ending June 30, 2016, or June 30, 2017, to the extent such rate increases 109
are within available appropriations. For the fiscal years ending June 30, 110
2016, and June 30, 2017, and each succeeding fiscal year, any facility 111
that would have been issued a lower rate, due to interim rate status, a 112
change in allowable fair rent or agreement with the department, shall 113
be issued such lower rate. For the fiscal years ending June 30, 2018, and 114
June 30, 2019, rates shall not exceed those in effect for the period 115
ending June 30, 2017, except the rate paid to a facility may be higher 116
than the rate paid to the facility for the period ending June 30, 2017, if a 117
capital improvement approved by the Department of Developmental 118
Services, in consultation with the Department of Social Services, for the 119
health or safety of the residents was made to the facility during the 120
fiscal year ending June 30, 2018, or June 30, 2019, to the extent such rate 121
increases are within available appropriations. For the fiscal years 122 Substitute Bill No. 1109
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ending June 30, 2020, and June 30, 2021, rates shall not exceed those in 123
effect for the fiscal year ending June 30, 2019, except the rate paid to a 124
facility may be higher than the rate paid to the facility for the fiscal 125
year ending June 30, 2019, if a capital improvement approved by the 126
Department of Developmental Services, in consultation with the 127
Department of Social Services, for the health or safety of the residents 128
was made to the facility during the fiscal year ending June 30, 2020, or 129
June 30, 2021, to the extent such rate increases are within available 130
appropriations. For the fiscal years ending June 30, 2022, and June 30, 131
2023, rates shall be based upon rates in effect for the fiscal year ending 132
June 30, 2021, inflated by the gross domestic product deflator 133
applicable to each rate year, except the commissioner may, in the 134
commissioner's discretion and within available appropriations, 135
provide pro rata fair rent increases to facilities which have 136
documented fair rent additions placed in service in the cost report 137
years ending September 30, 2020, and September 30, 2021, that are not 138
otherwise included in rates issued, or if a rate adjustment for a capital 139
improvement approved by the Department of Developmental Services, 140
in consultation with the Department of Social Services, for the health 141
or safety of the residents was made to the facility during the fiscal year 142
ending June 30, 2022, or June 30, 2023. For the fiscal years ending June 143
30, 2024, and June 30, 2025, the rate paid to a facility may be higher 144
than the rate paid to the facility for the fiscal year ending June 30, 2023, 145
if a capital improvement approved by the Department of 146
Developmental Services, in consultation with the Department of Social 147
Services, for the health or safety of the residents was made to the 148
facility during the fiscal year ending June 30, 2024, or June 30, 2025, to 149
the extent such rate increases are within available appropriations. 150
(b) Notwithstanding the provisions of subsection (a) of this section, 151
state rates of payment for the fiscal years ending June 30, 2018, June 30, 152
2019, June 30, 2020, and June 30, 2021, for residential care homes and 153
community living arrangements that receive the flat rate for residential 154
services under section 17-311-54 of the regulations of Connecticut state 155
agencies shall be set in accordance with section 298 of public act 19-156 Substitute Bill No. 1109
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117. For the fiscal years ending June 30, 2022, and June 30, 2023, rates 157
shall be based upon rates in effect for the fiscal year ending June 30, 158
2021, inflated by the gross domestic product deflator applicable to each 159
rate year. 160
(c) For the fiscal year ending June 30, 2024, and each subsequent 161
fiscal year, the commissioner may, in the commissioner's discretion 162
and within available appropriations, provide pro rata fair rent 163
increases to facilities which have documented fair rent additions 164
placed in service in the cost report years that are not otherwise 165
included in rates issued. 166
[(c)] (d) The Commissioner of Social Services and the Commissioner 167
of Developmental Services shall adopt regulations in accordance with 168
the provisions of chapter 54 to implement the provisions of this 169
section. 170
Sec. 2. Subsection (h) of section 17b-340 of the general statutes is 171
repealed and the following is substituted in lieu thereof (Effective July 172
1, 2023): 173
(h) (1) For the fiscal year ending June 30, 1993, any intermediate care 174
facility for individuals with intellectual disabilities with an operating 175
cost component of its rate in excess of one hundred forty per cent of 176
the median of operating cost components of rates in effect January 1, 177
1992, shall not receive an operating cost component increase. For the 178
fiscal year ending June 30, 1993, any intermediate care facility for 179
individuals with intellectual disabilities with an operating cost 180
component of its rate that is less than one hundred forty per cent of the 181
median of operating cost components of rates in effect January 1, 1992, 182
shall have an allowance for real wage growth equal to thirty per cent 183
of the increase determined in accordance with subsection (q) of section 184
17-311-52 of the regulations of Connecticut state agencies, provided 185
such operating cost component shall not exceed one hundred forty per 186
cent of the median of operating cost components in effect January 1, 187
1992. Any facility with real property other than land placed in service 188 Substitute Bill No. 1109
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prior to October 1, 1991, shall, for the fiscal year ending June 30, 1995, 189
receive a rate of return on real property equal to the average of the 190
rates of return applied to real property other than land placed in 191
service for the five years preceding October 1, 1993. For the fiscal year 192
ending June 30, 1996, and any succeeding fiscal year, the rate of return 193
on real property for property items shall be revised every five years. 194
The commissioner shall, upon submission of a request, allow actual 195
debt service, comprised of principal and interest, in excess of property 196
costs allowed pursuant to section 17-311-52 of the regulations of 197
Connecticut state agencies, provided such debt service terms and 198
amounts are reasonable in relation to the useful life and the base value 199
of the property. For the fiscal year ending June 30, 1995, and any 200
succeeding fiscal year, the inflation adjustment made in accordance 201
with subsection (p) of section 17-311-52 of the regulations of 202
Connecticut state agencies shall not be applied to real property costs. 203
For the fiscal year ending June 30, 1996, and any succeeding fiscal year, 204
the allowance for real wage growth, as determined in accordance with 205
subsection (q) of section 17-311-52 of the regulations of Connecticut 206
state agencies, shall not be applied. For the fiscal year ending June 30, 207
1996, and any succeeding fiscal year, no rate shall exceed three 208
hundred seventy-five dollars per day unless the commissioner, in 209
consultation with the Commissioner of Developmental Services, 210
determines after a review of program and management costs, that a 211
rate in excess of this amount is necessary for care and treatment of 212
facility residents. For the fiscal year ending June 30, 2002, rate period, 213
the Commissioner of Social Services shall increase the inflation 214
adjustment for rates made in accordance with subsection (p) of section 215
17-311-52 of the regulations of Connecticut state agencies to update 216
allowable fiscal year 2000 costs to include a three and one-half per cent 217
inflation factor. For the fiscal year ending June 30, 2003, rate period, the 218
commissioner shall increase the inflation adjustment for rates made in 219
accordance with subsection (p) of section 17-311-52 of the regulations 220
of Connecticut state agencies to update allowable fiscal year 2001 costs 221
to include a one and one-half per cent inflation factor, except that such 222
increase shall be effective November 1, 2002, and such facility rate in 223 Substitute Bill No. 1109
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effect for the fiscal year ending June 30, 2002, shall be paid for services 224
provided until October 31, 2002, except any facility that would have 225
been issued a lower rate effective July 1, 2002, than for the fiscal year 226
ending June 30, 2002, due to interim rate status or agreement with the 227
department shall be issued such lower rate effective July 1, 2002, and 228
have such rate updated effective November 1, 2002, in accordance with 229
applicable statutes and regulations. For the fiscal year ending June 30, 230
2004, rates in effect for the period ending June 30, 2003, shall remain in 231
effect, except any facility that would have been issued a lower rate 232
effective July 1, 2003, than for the fiscal year ending June 30, 2003, due 233
to interim rate status or agreement with the department shall be issued 234
such lower rate effective July 1, 2003. For the fiscal year ending June 235
30, 2005, rates in effect for the period ending June 30, 2004, shall 236
remain in effect until September 30, 2004. Effective October 1, 2004, 237
each facility shall receive a rate that is five per cent greater than the 238
rate in effect September 30, 2004. Effective upon receipt of all the 239
necessary federal approvals to secure federal financial participation 240
matching funds associated with the rate increase provided in 241
subdivision (4) of subsection (f) of this section, but in no event earlier 242
than October 1, 2005, and provided the user fee imposed under section 243
17b-320 is required to be collected, each facility shall receive a rate that 244
is four per cent more than the rate the facility received in the prior 245
fiscal year, except any facility that would have been issued a lower rate 246
effective October 1, 2005, than for the fiscal year ending June 30, 2005, 247
due to interim rate status or agreement with the department, shall be 248
issued such lower rate effective October 1, 2005. Such rate increase 249
shall remain in effect unless: [(1)] (A) The federal financial 250
participation matching funds associated with the rate increase are no 251
longer available; or [(2)] (B) the user fee created pursuant to section 252
17b-320 is not in effect. For the fiscal year ending June 30, 2007, rates in 253
effect for the period ending June 30, 2006, shall remain in effect until 254
September 30, 2006, except any facility that would have been issued a 255
lower rate effective July 1, 2006, than for the fiscal year ending June 30, 256
2006, due to interim rate status or agreement with the department, 257
shall be issued such lower rate effective July 1, 2006. Effective October 258 Substitute Bill No. 1109
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1, 2006, no facility shall receive a rate that is more than three per cent 259
greater than the rate in effect for the facility on September 30, 2006, 260
except any facility that would have been issued a lower rate effective 261
October 1, 2006, due to interim rate status or agreement with the 262
department, shall be issued such lower rate effective October 1, 2006. 263
For the fiscal year ending June 30, 2008, each facility shall receive a rate 264
that is two and nine-tenths per cent greater than the rate in effect for 265
the period ending June 30, 2007, except any facility that would have 266
been issued a lower rate effective July 1, 2007, than for the rate period 267
ending June 30, 2007, due to interim rate status, or agreement with the 268
department, shall be issued such lower rate effective July 1, 2007. For 269
the fiscal year ending June 30, 2009, rates in effect for the period 270
ending June 30, 2008, shall remain in effect until June 30, 2009, except 271
any facility that would have been issued a lower rate for the fiscal year 272
ending June 30, 2009, due to interim rate status or agreement with the 273
department, shall be issued such lower rate. For the fiscal years ending 274
June 30, 2010, and June 30, 2011, rates in effect for the period ending 275
June 30, 2009, shall remain in effect until June 30, 2011, except any 276
facility that would have been issued a lower rate for the fiscal year 277
ending June 30, 2010, or the fiscal year ending June 30, 2011, due to 278
interim rate status or agreement with the department, shall be issued 279
such lower rate. For the fiscal year ending June 30, 2012, rates in effect 280
for the period ending June 30, 2011, shall remain in effect until June 30, 281
2012, except any facility that would have been issued a lower rate for 282
the fiscal year ending June 30, 2012, due to interim rate status or 283
agreement with the department, shall be issued such lower rate. For 284
the fiscal years ending June 30, 2014, and June 30, 2015, rates shall not 285
exceed those in effect for the period ending June 30, 2013, except the 286
rate paid to a facility may be higher than the rate paid to the facility for 287
the period ending June 30, 2013, if a capital improvement approved by 288
the Department of Developmental Services, in consultation with the 289
Department of Social Services, for the health or safety of the residents 290
was made to the facility during the fiscal year ending June 30, 2014, or 291
June 30, 2015, to the extent such rate increases are within available 292
appropriations. Any facility that would have been issued a lower rate 293 Substitute Bill No. 1109
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for the fiscal year ending June 30, 2014, or the fiscal year ending June 294
30, 2015, due to interim rate status or agreement with the department, 295
shall be issued such lower rate. For the fiscal years ending June 30, 296
2016, and June 30, 2017, rates shall not exceed those in effect for the 297
period ending June 30, 2015, except the rate paid to a facility may be 298
higher than the rate paid to the facility for the period ending June 30, 299
2015, if a capital improvement approved by the Department of 300
Developmental Services, in consultation with the Department of Social 301
Services, for the health or safety of the residents was made to the 302
facility during the fiscal year ending June 30, 2016, or June 30, 2017, to 303
the extent such rate increases are within available appropriations. For 304
the fiscal years ending June 30, 2016, and June 30, 2017, and each 305
succeeding fiscal year, any facility that would have been issued a 306
lower rate, due to interim rate status, a change in allowable fair rent or 307
agreement with the department, shall be issued such lower rate. For 308
the fiscal years ending June 30, 2018, and June 30, 2019, rates shall not 309
exceed those in effect for the period ending June 30, 2017, except the 310
rate paid to a facility may be higher than the rate paid to the facility for 311
the period ending June 30, 2017, if a capital improvement approved by 312
the Department of Developmental Services, in consultation with the 313
Department of Social Services, for the health or safety of the residents 314
was made to the facility during the fiscal year ending June 30, 2018, or 315
June 30, 2019, only to the extent such rate increases are within available 316
appropriations. For the fiscal years ending June 30, 2020, and June 30, 317
2021, rates shall not exceed those in effect for the fiscal year ending 318
June 30, 2019, except the rate paid to a facility may be higher than the 319
rate paid to the facility for the fiscal year ending June 30, 2019, if a 320
capital improvement approved by the Department of Developmental 321
Services, in consultation with the Department of Social Services, for the 322
health or safety of the residents was made to the facility during the 323
fiscal year ending June 30, 2020, or June 30, 2021, only to the extent 324
such rate increases are within available appropriations. For the fiscal 325
year ending June 30, 2022, rates shall not exceed those in effect for the 326
fiscal year ending June 30, 2021, except the commissioner may, in the 327
commissioner's discretion and within available appropriations, 328 Substitute Bill No. 1109
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provide pro rata fair rent increases to facilities that have documented 329
fair rent additions placed in service in the cost report year ending 330
September 30, 2020, that are not otherwise included in rates issued. For 331
the fiscal year ending June 30, 2023, rates shall not exceed those in 332
effect for the fiscal year ending June 30, 2022, except the commissioner 333
may, in the commissioner's discretion and within available 334
appropriations, provide pro rata fair rent increases to facilities which 335
have documented fair rent additions placed in service in the cost 336
report year ending September 30, 2021, that are not otherwise included 337
in rates issued. For the fiscal years ending June 30, 2022, and June 30, 338
2023, a facility may receive a rate increase for a capital improvement 339
approved by the Depar tment of Developmental Services, in 340
consultation with the Department of Social Services, for the health or 341
safety of the residents during the fiscal year ending June 30, 2022, or 342
June 30, 2023, only to the extent such rate increases are within available 343
appropriations. For the fiscal years ending June 30, 2024, and June 30, 344
2025, a facility may receive a rate increase for a capital improvement 345
approved by the Department of Developmental Services, in 346
consultation with the Department of Social Services, for the health or 347
safety of the residents during the fiscal year ending June 30, 2024, or 348
June 30, 2025, only to the extent such rate increases are within available 349
appropriations. Any facility that has a significant decrease in land and 350
building costs shall receive a reduced rate to reflect such decrease in 351
land and building costs. For the fiscal years ending June 30, 2012, June 352
30, 2013, June 30, 2014, June 30, 2015, June 30, 2016, June 30, 2017, June 353
30, 2018, June 30, 2019, June 30, 2020, June 30, 2021, June 30, 2022, [and] 354
June 30, 2023, June 30, 2024, and June 30, 2025, the Commissioner of 355
Social Services may provide fair rent increases to any facility that has 356
undergone a material change in circumstances related to fair rent and 357
has an approved certificate of need pursuant to section 17b-352, 17b-358
353, 17b-354 or 17b-355. Notwithstanding the provisions of this section, 359
the Commissioner of Social Services may, within available 360
appropriations, increase or decrease rates issued to intermediate care 361
facilities for individuals with intellectual disabilities to reflect a 362
reduction in available appropriations as provided in subsection (a) of 363 Substitute Bill No. 1109
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this section. For the fiscal years ending June 30, 2014, and June 30, 364
2015, the commissioner shall not consider rebasing in determining 365
rates. Notwithstanding the provisions of this subsection, effective July 366
1, 2021, and July 1, 2022, the commissioner shall, within available 367
appropriations, increase rates for the purpose of wage and benefit 368
enhancements for employees of intermediate care facilities. Facilities 369
that receive a rate adjustment for the purpose of wage and benefit 370
enhancements but do not provide increases in employee salaries as 371
described in this subsection on or before July 31, 2021, and July 31, 372
2022, respectively, may be subject to a rate decrease in the same 373
amount as the adjustment by the commissioner. The rate of inflation 374
shall be computed based on the percentage increase, if any, in the most 375
recent calendar year average in the gross domestic product deflator 376
over the average for the previous calendar year. Any increase to rates 377
based on inflation shall be applied prior to the application of any other 378
budget adjustment factors that may impact such rates. 379
(2) The Commissioner of Social Services shall determine whether 380
and to what extent a change in ownership of a facility shall occasion 381
the rebasing of the facility's costs. For the fiscal year ending June 30, 382
2024, and each subsequent fiscal year, the commissioner may, in the 383
commissioner's discretion and within available appropriations, 384
provide pro rata fair rent increases to facilities which have 385
documented fair rent additions placed in service in the cost report 386
years that are not otherwise included in rates issued. 387
Sec. 3. Subsection (i) of section 17b-340 of the general statutes is 388
repealed and the following is substituted in lieu thereof (Effective July 389
1, 2023): 390
(i) For the fiscal year ending June 30, 1993, any residential care home 391
with an operating cost component of its rate in excess of one hundred 392
thirty per cent of the median of operating cost components of rates in 393
effect January 1, 1992, shall not receive an operating cost component 394
increase. For the fiscal year ending June 30, 1993, any residential care 395
home with an operating cost component of its rate that is less than one 396 Substitute Bill No. 1109
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hundred thirty per cent of the median of operating cost components of 397
rates in effect January 1, 1992, shall have an allowance for real wage 398
growth equal to sixty-five per cent of the increase determined in 399
accordance with subsection (q) of section 17-311-52 of the regulations 400
of Connecticut state agencies, provided such operating cost component 401
shall not exceed one hundred thirty per cent of the median of 402
operating cost components in effect January 1, 1992. Beginning with 403
the fiscal year ending June 30, 1993, for the purpose of determining 404
allowable fair rent, a residential care home with allowable fair rent less 405
than the twenty-fifth percentile of the state-wide allowable fair rent 406
shall be reimbursed as having allowable fair rent equal to the twenty-407
fifth percentile of the state-wide allowable fair rent. Beginning with the 408
fiscal year ending June 30, 1997, a residential care home with allowable 409
fair rent less than three dollars and ten cents per day shall be 410
reimbursed as having allowable fair rent equal to three dollars and ten 411
cents per day. Property additions placed in service during the cost year 412
ending September 30, 1996, or any succeeding cost year shall receive a 413
fair rent allowance for such additions as an addition to three dollars 414
and ten cents per day if the fair rent for the facility for property placed 415
in service prior to September 30, 1995, is less than or equal to three 416
dollars and ten cents per day. Beginning with the fiscal year ending 417
June 30, 2016, a residential care home shall be reimbursed the greater 418
of the allowable accumulated fair rent reimbursement associated with 419
real property additions and land as calculated on a per day basis or 420
three dollars and ten cents per day if the allowable reimbursement 421
associated with real property additions and land is less than three 422
dollars and ten cents per day. For the fiscal year ending June 30, 1996, 423
and any succeeding fiscal year, the allowance for real wage growth, as 424
determined in accordance with subsection (q) of section 17-311-52 of 425
the regulations of Connecticut state agencies, shall not be applied. For 426
the fiscal year ending June 30, 1996, and any succeeding fiscal year, the 427
inflation adjustment made in accordance with subsection (p) of section 428
17-311-52 of the regulations of Connecticut state agencies shall not be 429
applied to real property costs. Beginning with the fiscal year ending 430
June 30, 1997, minimum allowable patient days for rate computation 431 Substitute Bill No. 1109
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purposes for a residential care home with twenty-five beds or less shall 432
be eighty-five per cent of licensed capacity. Beginning with the fiscal 433
year ending June 30, 2002, for the purposes of determining the 434
allowable salary of an administrator of a residential care home with 435
sixty beds or less the department shall revise the allowable base salary 436
to thirty-seven thousand dollars to be annually inflated thereafter in 437
accordance with section 17-311-52 of the regulations of Connecticut 438
state agencies. The rates for the fiscal year ending June 30, 2002, shall 439
be based upon the increased allowable salary of an administrator, 440
regardless of whether such amount was expended in the 2000 cost 441
report period upon which the rates are based. Beginning with the fiscal 442
year ending June 30, 2000, and until the fiscal year ending June 30, 443
2009, inclusive, the inflation adjustment for rates made in accordance 444
with subsection (p) of section 17-311-52 of the regulations of 445
Connecticut state agencies shall be increased by two per cent, and 446
beginning with the fiscal year ending June 30, 2002, the inflation 447
adjustment for rates made in accordance with subsection (c) of said 448
section shall be increased by one per cent. Beginning with the fiscal 449
year ending June 30, 1999, for the purpose of determining the 450
allowable salary of a related party, the department shall revise the 451
maximum salary to twenty-seven thousand eight hundred fifty-six 452
dollars to be annually inflated thereafter in accordance with section 17-453
311-52 of the regulations of Connecticut state agencies and beginning 454
with the fiscal year ending June 30, 2001, such allowable salary shall be 455
computed on an hourly basis and the maximum number of hours 456
allowed for a related party other than the proprietor shall be increased 457
from forty hours to forty-eight hours per work week. For the fiscal 458
year ending June 30, 2005, each facility shall receive a rate that is two 459
and one-quarter per cent more than the rate the facility received in the 460
prior fiscal year, except any facility that would have been issued a 461
lower rate effective July 1, 2004, than for the fiscal year ending June 30, 462
2004, due to interim rate status or agreement with the department shall 463
be issued such lower rate effective July 1, 2004. Effective upon receipt 464
of all the necessary federal approvals to secure federal financial 465
participation matching funds associated with the rate increase 466 Substitute Bill No. 1109
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provided in subdivision (4) of subsection (f) of this section, but in no 467
event earlier than October 1, 2005, and provided the user fee imposed 468
under section 17b-320 is required to be collected, each facility shall 469
receive a rate that is determined in accordance with applicable law and 470
subject to appropriations, except any facility that would have been 471
issued a lower rate effective October 1, 2005, than for the fiscal year 472
ending June 30, 2005, due to interim rate status or agreement with the 473
department, shall be issued such lower rate effective October 1, 2005. 474
Such rate increase shall remain in effect unless: (1) The federal financial 475
participation matching funds associated with the rate increase are no 476
longer available; or (2) the user fee created pursuant to section 17b-320 477
is not in effect. For the fiscal year ending June 30, 2007, rates in effect 478
for the period ending June 30, 2006, shall remain in effect until 479
September 30, 2006, except any facility that would have been issued a 480
lower rate effective July 1, 2006, than for the fiscal year ending June 30, 481
2006, due to interim rate status or agreement with the department, 482
shall be issued such lower rate effective July 1, 2006. Effective October 483
1, 2006, no facility shall receive a rate that is more than four per cent 484
greater than the rate in effect for the facility on September 30, 2006, 485
except for any facility that would have been issued a lower rate 486
effective October 1, 2006, due to interim rate status or agreement with 487
the department, shall be issued such lower rate effective October 1, 488
2006. For the fiscal years ending June 30, 2010, and June 30, 2011, rates 489
in effect for the period ending June 30, 2009, shall remain in effect until 490
June 30, 2011, except any facility that would have been issued a lower 491
rate for the fiscal year ending June 30, 2010, or the fiscal year ending 492
June 30, 2011, due to interim rate status or agreement with the 493
department, shall be issued such lower rate, except (A) any facility that 494
would have been issued a lower rate for the fiscal year ending June 30, 495
2010, or the fiscal year ending June 30, 2011, due to interim rate status 496
or agreement with the Commissioner of Social Services shall be issued 497
such lower rate; and (B) the commissioner may increase a facility's rate 498
for reasonable costs associated with such facility's compliance with the 499
provisions of section 19a-495a concerning the administration of 500
medication by unlicensed personnel. For the fiscal year ending June 30, 501 Substitute Bill No. 1109
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2012, rates in effect for the period ending June 30, 2011, shall remain in 502
effect until June 30, 2012, except that (i) any facility that would have 503
been issued a lower rate for the fiscal year ending June 30, 2012, due to 504
interim rate status or agreement with the Commissioner of Social 505
Services shall be issued such lower rate; and (ii) the commissioner may 506
increase a facility's rate for reasonable costs associated with such 507
facility's compliance with the provisions of section 19a-495a 508
concerning the administration of medication by unlicensed personnel. 509
For the fiscal year ending June 30, 2013, the Commissioner of Social 510
Services may, within available appropriations, provide a rate increase 511
to a residential care home. Any facility that would have been issued a 512
lower rate for the fiscal year ending June 30, 2013, due to interim rate 513
status or agreement with the Commissioner of Social Services shall be 514
issued such lower rate. For the fiscal years ending June 30, 2012, and 515
June 30, 2013, the Commissioner of Social Services may provide fair 516
rent increases to any facility that has undergone a material change in 517
circumstances related to fair rent and has an approved certificate of 518
need pursuant to section 17b-352, 17b-353, 17b-354 or 17b-355. For the 519
fiscal years ending June 30, 2014, and June 30, 2015, for those facilities 520
that have a calculated rate greater than the rate in effect for the fiscal 521
year ending June 30, 2013, the commissioner may increase facility rates 522
based upon available appropriations up to a stop gain as determined 523
by the commissioner. No facility shall be issued a rate that is lower 524
than the rate in effect on June 30, 2013, except that any facility that 525
would have been issued a lower rate for the fiscal year ending June 30, 526
2014, or the fiscal year ending June 30, 2015, due to interim rate status 527
or agreement with the commissioner, shall be issued such lower rate. 528
For the fiscal year ending June 30, 2014, and each fiscal year thereafter, 529
a residential care home shall receive a rate increase for any capital 530
improvement made during the fiscal year for the health and safety of 531
residents and approved by the Department of Social Services, 532
provided such rate increase is within available appropriations. For the 533
fiscal year ending June 30, 2015, and each succeeding fiscal year 534
thereafter, costs of less than ten thousand dollars that are incurred by a 535
facility and are associated with any land, building or nonmovable 536 Substitute Bill No. 1109
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equipment repair or improvement that are reported in the cost year 537
used to establish the facility's rate shall not be capitalized for a period 538
of more than five years for rate-setting purposes. For the fiscal year 539
ending June 30, 2015, subject to available appropriations, the 540
commissioner may, at the commissioner's discretion: Increase the 541
inflation cost limitation under subsection (c) of section 17-311-52 of the 542
regulations of Connecticut state agencies, provided such inflation 543
allowance factor does not exceed a maximum of five per cent; establish 544
a minimum rate of return applied to real property of five per cent 545
inclusive of assets placed in service during cost year 2013; waive the 546
standard rate of return under subsection (f) of section 17-311-52 of the 547
regulations of Connecticut state agencies for ownership changes or 548
health and safety improvements that exceed one hundred thousand 549
dollars and that are required under a consent order from the 550
Department of Public Health; and waive the rate of return adjustment 551
under subsection (f) of section 17-311-52 of the regulations of 552
Connecticut state agencies to avoid financial hardship. For the fiscal 553
years ending June 30, 2016, and June 30, 2017, rates shall not exceed 554
those in effect for the period ending June 30, 2015, except the 555
commissioner may, in the commissioner's discretion and within 556
available appropriations, provide pro rata fair rent increases to 557
facilities which have documented fair rent additions placed in service 558
in cost report years ending September 30, 2014, and September 30, 559
2015, that are not otherwise included in rates issued. For the fiscal 560
years ending June 30, 2016, and June 30, 2017, and each succeeding 561
fiscal year, any facility that would have been issued a lower rate, due 562
to interim rate status, a change in allowable fair rent or agreement with 563
the department, shall be issued such lower rate. For the fiscal year 564
ending June 30, 2018, rates shall not exceed those in effect for the 565
period ending June 30, 2017, except the commissioner may, in the 566
commissioner's discretion and within available appropriations, 567
provide pro rata fair rent increases to facilities which have 568
documented fair rent additions placed in service in the cost report year 569
ending September 30, 2016, that are not otherwise included in rates 570
issued. For the fiscal year ending June 30, 2019, rates shall not exceed 571 Substitute Bill No. 1109
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those in effect for the period ending June 30, 2018, except the 572
commissioner may, in the commissioner's discretion and within 573
available appropriations, provide pro rata fair rent increases to 574
facilities which have documented fair rent additions placed in service 575
in the cost report year ending September 30, 2017, that are not 576
otherwise included in rates issued. For the fiscal year ending June 30, 577
2020, rates shall not exceed those in effect for the fiscal year ending 578
June 30, 2019, except the commissioner may, in the commissioner's 579
discretion and within available appropriations, provide pro rata fair 580
rent increases to facilities which have documented fair rent additions 581
placed in service in the cost report year ending September 30, 2018, 582
that are not otherwise included in rates issued. For the fiscal year 583
ending June 30, 2021, rates shall not exceed those in effect for the fiscal 584
year ending June 30, 2020, except the commissioner may, in the 585
commissioner's discretion and within available appropriations, 586
provide pro rata fair rent increases to facilities which have 587
documented fair rent additions placed in service in the cost report year 588
ending September 30, 2019, that are not otherwise included in rates 589
issued. For the fiscal year ending June 30, 2022, the commissioner may, 590
in the commissioner's discretion and within available appropriations, 591
provide pro rata fair rent increases to facilities that have documented 592
fair rent additions placed in service in the cost report year ending 593
September 30, 2020, that are not otherwise included in rates issued. For 594
the fiscal year ending June 30, 2023, the commissioner may, in the 595
commissioner's discretion and within available appropriations, 596
provide pro rata fair rent increases to facilities which have 597
documented fair rent additions placed in service in the cost report year 598
ending September 30, 2021, that are not otherwise included in rates 599
issued. For the fiscal years ending June 30, 2022, and June 30, 2023, a 600
facility may receive a rate increase for a capital improvement approved 601
by the Department of Social Services, for the health or safety of the 602
residents during the fiscal year ending June 30, 2022, or June 30, 2023, 603
only to the extent such rate increases are within available 604
appropriations. For the fiscal year ending June 30, 2022, and June 30, 605
2023, rates shall be based upon rates in effect for the fiscal year ending 606 Substitute Bill No. 1109
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June 30, 2021, inflated by the gross domestic product deflator 607
applicable to each rate year, except the commissioner may, in the 608
commissioner's discretion and within available appropriations, 609
provide pro rata fair rent increases to facilities which have 610
documented fair rent additions placed in service in the cost report 611
years ending September 30, 2020, and September 30, 2021, that are not 612
otherwise included in rates issued. The rate of inflation shall be 613
computed based on the percentage increase, if any, in the most recent 614
calendar year average in the gross domestic product deflator over the 615
average for the previous calendar year. Any increase to rates based on 616
inflation shall be applied prior to the application of any other budget 617
adjustment factors that may impact such rates. The commissioner shall 618
determine whether and to what extent a change in ownership of a 619
facility shall occasion the rebasing of the facility's costs. For the fiscal 620
years ending June 30, 2024, and June 30, 2025, a facility may receive a 621
rate increase for a capital improvement approved by the Department 622
of Social Services, for the health or safety of the residents during the 623
fiscal year ending June 30, 2024, or June 30, 2025, only to the extent 624
such rate increases are within available appropriations. For the fiscal 625
year ending June 30, 2024, the commissioner may, in the 626
commissioner's discretion and within available appropriations, 627
provide pro rata fair rent increases to facilities that have documented 628
fair rent additions placed in service in the cost report year ending 629
September 30, 2022, that are not otherwise included in rates issued. For 630
the fiscal year ending June 30, 2025, the commissioner may, in the 631
commissioner's discretion and within available appropriations, 632
provide pro rata fair rent increases to facilities that have documented 633
fair rent additions placed in service in the cost report year ending 634
September 30, 2023, that are not otherwise included in rates issued. 635
Sec. 4. Subsection (a) of section 17b-340 of the general statutes is 636
repealed and the following is substituted in lieu thereof (Effective from 637
passage): 638
(a) For purposes of this subsection, (1) a "related party" includes, but 639 Substitute Bill No. 1109
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is not limited to, any company related to a chronic and convalescent 640
nursing home through family association, common ownership, control 641
or business association with any of the owners, operators or officials of 642
such nursing home; (2) "company" means any person, partnership, 643
association, holding company, limited liability company or 644
corporation; (3) "family association" means a relationship by birth, 645
marriage or domestic partnership; and (4) "profit and loss statement" 646
means the most recent annual statement on profits and losses finalized 647
by a related party before the annual report mandated under this 648
subsection. The rates to be paid by or for persons aided or cared for by 649
the state or any town in this state to licensed chronic and convalescent 650
nursing homes, to chronic disease hospitals associated with chronic 651
and convalescent nursing homes, to rest homes with nursing 652
supervision, to licensed residential care homes, as defined by section 653
19a-490, and to residential facilities for persons with intellectual 654
disability that are licensed pursuant to section 17a-227 and certified to 655
participate in the Title XIX Medicaid program as intermediate care 656
facilities for individuals with intellectual disabilities, for room, board 657
and services specified in licensing regulations issued by the licensing 658
agency shall be determined annually, except as otherwise provided in 659
this subsection by the Commissioner of Social Services, to be effective 660
July first of each year except as otherwise provided in this subsection. 661
Such rates shall be determined on a basis of a reasonable payment for 662
such necessary services, which basis shall take into account as a factor 663
the costs of such services. Cost of such services shall include 664
reasonable costs mandated by collective bargaining agreements with 665
certified collective bargaining agents or other agreements between the 666
employer and employees, provided "employees" shall not include 667
persons employed as managers or chief administrators or required to 668
be licensed as nursing home administrators, and compensation for 669
services rendered by proprietors at prevailing wage rates, as 670
determined by application of principles of accounting as prescribed by 671
said commissioner. Cost of such services shall not include amounts 672
paid by the facilities to employees as salary, or to attorneys or 673
consultants as fees, where the responsibility of the employees, 674 Substitute Bill No. 1109
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attorneys, or consultants is to persuade or seek to persuade the other 675
employees of the facility to support or oppose unionization. Nothing 676
in this subsection shall prohibit inclusion of amounts paid for legal 677
counsel related to the negotiation of collective bargaining agreements, 678
the settlement of grievances or normal administration of labor 679
relations. The commissioner may, in the commissioner's discretion, 680
allow the inclusion of extraordinary and unanticipated costs of 681
providing services that were incurred to avoid an immediate negative 682
impact on the health and safety of patients. The commissioner may, in 683
the commissioner's discretion, based upon review of a facility's costs, 684
direct care staff to patient ratio and any other related information, 685
revise a facility's rate for any increases or decreases to total licensed 686
capacity of more than ten beds or changes to its number of licensed 687
rest home with nursing supervision beds and chronic and convalescent 688
nursing home beds. The commissioner may, in the commissioner's 689
discretion, revise the rate of a facility that is closing. An interim rate 690
issued for the period during which a facility is closing shall be based 691
on a review of facility costs, the expected duration of the close-down 692
period, the anticipated impact on Medicaid costs, available 693
appropriations and the relationship of the rate requested by the facility 694
to the average Medicaid rate for a close-down period. The 695
commissioner may so revise a facility's rate established for the fiscal 696
year ending June 30, 1993, and thereafter for any bed increases, 697
decreases or changes in licensure effective after October 1, 1989. 698
Effective July 1, 1991, in facilities that have both a chronic and 699
convalescent nursing home and a rest home with nursing supervision, 700
the rate for the rest home with nursing supervision shall not exceed 701
such facility's rate for its chronic and convalescent nursing home. All 702
such facilities for which rates are determined under this subsection 703
shall report on a fiscal year basis ending on September thirtieth. Such 704
report shall be submitted to the commissioner by February fifteenth. 705
Each for-profit chronic and convalescent nursing home that receives 706
state funding pursuant to this section shall include in such annual 707
report a profit and loss statement from each related party that receives 708
from such chronic and convalescent nursing home fifty thousand 709 Substitute Bill No. 1109
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dollars or more per year for goods, fees and services. No cause of 710
action or liability shall arise against the state, the Department of Social 711
Services, any state official or agent for failure to take action based on 712
the information required to be reported under this subsection. The 713
commissioner may reduce the rate in effect for a facility that fails to 714
submit a complete and accurate report on or before February fifteenth 715
by an amount not to exceed ten per cent of such rate. If a licensed 716
residential care home fails to submit a complete and accurate report, 717
the department shall notify such home of the failure and the home 718
shall have thirty days from the date the notice was issued to submit a 719
complete and accurate report. If a licensed residential care home fails 720
to submit a complete and accurate report not later than thirty days 721
after the date of notice, such home may not receive a retroactive rate 722
increase, in the commissioner's discretion. The commissioner shall, 723
annually, on or before April first, report the data contained in the 724
reports of such facilities on the department's Internet web site. For the 725
cost reporting year commencing October 1, 1985, and for subsequent 726
cost reporting years, facilities shall report the cost of using the services 727
of any nursing personnel supplied by a temporary nursing services 728
agency by separating said cost into two categories, the portion of the 729
cost equal to the salary of the employee for whom the nursing 730
personnel supplied by a temporary nursing services agency is 731
substituting shall be considered a nursing cost and any cost in excess 732
of such salary shall be further divided so that seventy-five per cent of 733
the excess cost shall be considered an administrative or general cost 734
and twenty-five per cent of the excess cost shall be considered a 735
nursing cost, provided if the total costs of a facility for nursing 736
personnel supplied by a temporary nursing services agency in any cost 737
year are equal to or exceed fifteen per cent of the total nursing 738
expenditures of the facility for such cost year, no portion of such costs 739
in excess of fifteen per cent shall be classified as administrative or 740
general costs. The commissioner, in determining such rates, shall also 741
take into account the classification of patients or boarders according to 742
special care requirements or classification of the facility according to 743
such factors as facilities and services and such other factors as the 744 Substitute Bill No. 1109
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commissioner deems reasonable, including anticipated fluctuations in 745
the cost of providing such services. The commissioner may establish a 746
separate rate for a facility or a portion of a facility for traumatic brain 747
injury patients who require extensive care but not acute general 748
hospital care. Such separate rate shall reflect the special care 749
requirements of such patients. If changes in federal or state laws, 750
regulations or standards adopted subsequent to June 30, 1985, result in 751
increased costs or expenditures in an amount exceeding one-half of 752
one per cent of allowable costs for the most recent cost reporting year, 753
the commissioner shall adjust rates and provide payment for any such 754
increased reasonable costs or expenditures within a reasonable period 755
of time retroactive to the date of enforcement. Nothing in this section 756
shall be construed to require the Department of Social Services to 757
adjust rates and provide payment for any increases in costs resulting 758
from an inspection of a facility by the Department of Public Health. 759
Such assistance as the commissioner requires from other state agencies 760
or departments in determining rates shall be made available to the 761
commissioner at the commissioner's request. Payment of the rates 762
established pursuant to this section shall be conditioned on the 763
establishment by such facilities of admissions procedures that conform 764
with this section, section 19a-533 and all other applicable provisions of 765
the law and the provision of equality of treatment to all persons in 766
such facilities. The established rates shall be the maximum amount 767
chargeable by such facilities for care of such beneficiaries, and the 768
acceptance by or on behalf of any such facility of any additional 769
compensation for care of any such beneficiary from any other person 770
or source shall constitute the offense of aiding a beneficiary to obtain 771
aid to which the beneficiary is not entitled and shall be punishable in 772
the same manner as is provided in subsection (b) of section 17b-97. 773
Notwithstanding any provision of this section, the Commissioner of 774
Social Services may, within available appropriations, provide an 775
interim rate increase for a licensed chronic and convalescent nursing 776
home or a rest home with nursing supervision for rate periods no 777
earlier than April 1, 2004, only if the commissioner determines that the 778
increase is necessary to avoid the filing of a petition for relief under 779 Substitute Bill No. 1109
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Title 11 of the United States Code; imposition of receivership pursuant 780
to sections 19a-542 and 19a-543; or substantial deterioration of the 781
facility's financial condition that may be expected to adversely affect 782
resident care and the continued operation of the facility, and the 783
commissioner determines that the continued operation of the facility is 784
in the best interest of the state. The commissioner shall consider any 785
requests for interim rate increases on file with the department from 786
March 30, 2004, and those submitted subsequently for rate periods no 787
earlier than April 1, 2004. When reviewing an interim rate increase 788
request the commissioner shall, at a minimum, consider: (A) Existing 789
chronic and convalescent nursing home or rest home with nursing 790
supervision utilization in the area and projected bed need; (B) physical 791
plant long-term viability and the ability of the owner or purchaser to 792
implement any necessary property improvements; (C) licensure and 793
certification compliance history; (D) reasonableness of actual and 794
projected expenses; and (E) the ability of the facility to meet wage and 795
benefit costs. No interim rate shall be increased pursuant to this 796
subsection in excess of one hundred fifteen per cent of the median rate 797
for the facility's peer grouping, established pursuant to subdivision [(2) 798
of subsection (f) of this section] (3) of subsection (a) of section 17b-799
340d, as amended by this act, unless recommended by the 800
commissioner and approved by the Secretary of the Office of Policy 801
and Management after consultation with the commissioner. Such 802
median rates shall be published by the Department of Social Services 803
not later than April first of each year. In the event that a facility 804
granted an interim rate increase pursuant to this section is sold or 805
otherwise conveyed for value to an unrelated entity less than five years 806
after the effective date of such rate increase, the rate increase shall be 807
deemed rescinded and the department shall recover an amount equal 808
to the difference between payments made for all affected rate periods 809
and payments that would have been made if the interim rate increase 810
was not granted. The commissioner may seek recovery of such 811
payments from any facility with common ownership. With the 812
approval of the Secretary of the Office of Policy and Management, the 813
commissioner may waive recovery and rescission of the interim rate 814 Substitute Bill No. 1109
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for good cause shown that is not inconsistent with this section, 815
including, but not limited to, transfers to family members that were 816
made for no value. The commissioner shall provide written quarterly 817
reports to the joint standing committees of the General Assembly 818
having cognizance of matters relating to aging, human services and 819
appropriations and the budgets of state agencies, that identify each 820
facility requesting an interim rate increase, the amount of the 821
requested rate increase for each facility, the action taken by the 822
commissioner and the secretary pursuant to this subsection, and 823
estimates of the additional cost to the state for each approved interim 824
rate increase. Nothing in this subsection shall prohibit the 825
commissioner from increasing the rate of a licensed chronic and 826
convalescent nursing home or a rest home with nursing supervision 827
for allowable costs associated with facility capital improvements or 828
increasing the rate in case of a sale of a licensed chronic and 829
convalescent nursing home or a rest home with nursing supervision if 830
receivership has been imposed on such home. For purposes of this 831
section, "temporary nursing services agency" and "nursing personnel" 832
have the same meaning as provided in section 19a-118. 833
Sec. 5. Subsection (a) of section 17b-340d of the general statutes is 834
repealed and the following is substituted in lieu thereof (Effective from 835
passage): 836
(a) The Commissioner of Social Services shall implement an acuity-837
based methodology for Medicaid reimbursement of nursing home 838
services effective July 1, 2022. Notwithstanding section 17b-340, as 839
amended by this act, for the fiscal year ending June 30, 2023, and 840
annually thereafter, the Commissioner of Social Services shall establish 841
Medicaid rates paid to nursing home facilities based on cost years 842
ending on September thirtieth in accordance with the following: 843
(1) Case-mix adjustments to the direct care component, which will 844
be based on Minimum Data Set resident assessment data as well as 845
cost data reported for the cost year ending September 30, 2019, shall be 846
made effective beginning July 1, 2022, and updated every quarter 847 Substitute Bill No. 1109
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thereafter. After modeling such case-mix adjustments, the 848
Commissioner of Social Services shall evaluate impact on a facility by 849
facility basis and, not later than October 1, 2021, (A) make 850
recommendations to the Secretary of the Office of Policy and 851
Management, and (B) submit a report on the recommendations, in 852
accordance with the provisions of section 11-4a, to the joint standing 853
committees of the General Assembly having cognizance of matters 854
relating to appropriations and the budgets of state agencies and 855
human services on any adjustments needed to facilitate the transition 856
to the new methodology on July 1, 2022. This evaluation may include a 857
review of inflationary allowances, case mix and budget adjustment 858
factors and stop loss and stop gain corridors and the ability to make 859
such adjustments within available appropriations. 860
(2) Beginning July 1, 2022, facilities will be required to comply with 861
collection and reporting of quality metrics as specified by the 862
Department of Social Services, after consultation with the nursing 863
home industry, consumers, employees and the Department of Public 864
Health. Rate adjustments based on performance on quality metrics will 865
be phased in, beginning July 1, 2022, with a period of reporting only. 866
(3) Geographic peer groupings of facilities shall be established by 867
the Department of Social Services pursuant to regulations adopted in 868
accordance with subsection (b) of this section. 869
(4) Allowable costs shall be divided into the following five cost 870
components: (A) Direct costs, which shall include salaries for nursing 871
personnel, related fringe benefits and costs for nursing personnel 872
supplied by a temporary nursing services agency; (B) indirect costs, 873
which shall include professional fees, dietary expenses, housekeeping 874
expenses, laundry expenses, supplies related to patient care, salaries 875
for indirect care personnel and related fringe benefits; (C) fair rent, 876
which shall be defined in regulations adopted in accordance with 877
subsection (b) of this section; (D) capital-related costs, which shall 878
include property taxes, insurance expenses, equipment leases and 879
equipment depreciation; and (E) administrative and general costs, 880 Substitute Bill No. 1109
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which shall include maintenance and operation of plant expenses, 881
salaries for administrative and maintenance personnel and related 882
fringe benefits. For (i) direct costs, the maximum cost shall be equal to 883
one hundred thirty-five per cent of the median allowable cost of that 884
peer grouping; (ii) indirect costs, the maximum cost shall be equal to 885
one hundred fifteen per cent of the state-wide median allowable cost; 886
(iii) fair rent, the amount shall be calculated utilizing the amount 887
approved pursuant to section 17b-353; (iv) capital-related costs, there 888
shall be no maximum; and (v) administrative and general costs, the 889
maximum shall be equal to the state-wide median allowable cost. For 890
purposes of this subdivision, "temporary nursing services agency" and 891
"nursing personnel" have the same meaning as provided in section 892
19a-118. 893
(5) Costs in excess of the maximum amounts established under this 894
subsection shall not be recognized as allowable costs, except that the 895
commissioner may establish rates whereby allowable costs may exceed 896
such maximum amounts for beds which are restricted to use by 897
patients with acquired immune deficiency syndrome, traumatic brain 898
injury or other specialized services. 899
[(5) For the fiscal year ending] (6) On or after June 30, 2022, the 900
commissioner may, in the commissioner's discretion and within 901
available appropriations, provide pro rata fair rent increases to 902
facilities which have documented fair rent additions placed in service 903
in the most recently filed cost report [year ending September 30, 2020,] 904
that are not otherwise included in the rates issued. The commissioner 905
may provide, within available appropriations, pro rata fair rent 906
increases, which may, at the discretion of the commissioner, include 907
increases for facilities that have undergone a material change in 908
circumstances related to fair rent additions in the most recently filed 909
cost report. 910
(7) For the purpose of determining allowable fair rent, a facility with 911
allowable fair rent less than the twenty-fifth percentile of the state-912
wide allowable fair rent shall be reimbursed as having allowable fair 913 Substitute Bill No. 1109
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rent equal to the twenty-fifth percentile of the state-wide allowable fair 914
rent. Any facility with a rate of return on real property other than land 915
in excess of eleven per cent shall have such allowance revised to eleven 916
per cent. Any facility or its related realty affiliate which finances or 917
refinances debt through bonds issued by the Connecticut Health and 918
Education Facilities Authority shall report the terms and conditions of 919
such financing or refinancing to the Commissioner of Social Services 920
not later than thirty days after completing such financing or 921
refinancing. The commissioner may revise the facility's fair rent 922
component of its rate to reflect any financial benefit the facility or its 923
related realty affiliate received as a result of such financing or 924
refinancing. The commissioner shall determine allowable fair rent for 925
real property other than land based on the rate of return for the cost 926
year in which such bonds were issued. The financial benefit resulting 927
from a facility financing or refinancing debt through such bonds shall 928
be shared between the state and the facility to an extent determined by 929
the commissioner on a case-by-case basis and shall be reflected in an 930
adjustment to the facility's allowable fair rent. 931
(8) A facility shall receive cost efficiency adjustments for indirect 932
costs and for administrative and general costs if such costs are below 933
the state-wide median costs. The cost efficiency adjustments shall 934
equal twenty-five per cent of the difference between allowable 935
reported costs and the applicable median allowable cost established 936
pursuant to subdivision (4) of this subsection. 937
(9) On and after July 1, 2025, costs shall be rebased no more 938
frequently than every two years and no less frequently than every four 939
years, as determined by the commissioner, within available 940
appropriations. The commissioner shall determine whether and to 941
what extent a change in ownership of a facility shall occasion the 942
rebasing of the facility's costs. 943
(10) The method of establishing rates for new facilities shall be 944
determined by the commissioner in accordance with the provisions of 945
this subsection. 946 Substitute Bill No. 1109
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[(6)] (11) There shall be no increase to rates based on inflation or any 947
inflationary factor for the fiscal years ending June 30, 2022, and June 948
30, 2023, unless otherwise authorized under subdivision (1) of this 949
subsection. Notwithstanding any other provisions of the general 950
statutes or regulations adopted thereunder, allowable operating costs, 951
excluding fair rent, shall be inflated by the gross domestic product 952
deflator when funding is specifically appropriated for such purposes 953
in the enacted budget. The rate of inflation shall be computed by 954
comparing the most recent rate year to the average of the gross 955
domestic product deflator for the previous four fiscal quarters ending 956
April thirtieth. Any increase to rates based on inflation shall be applied 957
prior to the application of any other budget adjustment factors that 958
may impact such rates. 959
[(7)] (12) For purposes of computing minimum allowable patient 960
days, utilization of a facility's certified beds shall be determined at a 961
minimum of ninety per cent of capacity, except for facilities that have 962
undergone a change in ownership, new facilities, and facilities which 963
are certified for additional beds which may be permitted a lower 964
occupancy rate for the first three months of operation after the effective 965
date of licensure. 966
[(8)] (13) Rates determined under this section shall comply with 967
federal laws and regulations. 968
(14) The Commissioner of Social Services may authorize an interim 969
rate for a facility demonstrating individual, facility-specific 970
circumstances impacting facility finances or costs not reflected in the 971
underlying rates. There shall be no rate withholds pursuant to the 972
implementation of a value-based payment system for the fiscal years 973
ending June 30, 2024, and June 30, 2025. 974
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2023 17b-244 Substitute Bill No. 1109
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Sec. 2 July 1, 2023 17b-340(h)
Sec. 3 July 1, 2023 17b-340(i)
Sec. 4 from passage 17b-340(a)
Sec. 5 from passage 17b-340d(a)
HS Joint Favorable Subst. C/R APP