Researcher: MF Page 1 5/2/23
OLR Bill Analysis
sSB 1109
AN ACT CONCERNING MEDICAID REIMBURSEMENT TO
COMMUNITY LIVING ARRANGEMENTS, INTERMEDIATE CARE
FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL
DISABILITIES, RESIDENTIAL CARE HOMES AND NURSING
FACILITIES.
TABLE OF CONTENTS:
SUMMARY
§ 1 — DSS PAYMENTS TO NON-ICF-ID BOARDING HOMES
Allows DSS to annually provide pro rata rent increases for fair rent additions not
otherwise included in rates beginning in FY 24
§ 2 — DSS PAYMENTS TO ICF-IDS
Prohibits inflationary adjustments for FYs 22 and 23, generally conforming to current
law, and requires future inflationary adjustments to be based on a GDP deflator and
adjusted by the DSS commissioner as she determines; requires DSS to determine whether
a facility’s change in ownership requires DSS to rebase its costs to calculate payment
rates; allows DSS to provide annual pro rata rent increases beginning in FY 24
§ 3 — RESIDENTIAL CARE HOME RATES
Requires inflationary adjustments to be based on a GDP deflator and adjusted by the DSS
commissioner as she determines; requires DSS to determine whether a facility’s change in
ownership requires DSS to rebase its costs to calculate payment rates
§§ 4 & 5 — NURSING HOME RATES
Allows the DSS commissioner to give pro rata fair rent increases, in her discretion and
within available appropriations, to facilities with documented fair rent additions; sets a
schedule for DSS to rebase facility costs; requires future inflationary adjustments to be
based on a GDP deflator and adjusted by the DSS commissioner as she determines; and
makes conforming changes
SUMMARY
This bill makes changes in laws related to rates and payments under
Department of Social Services (DSS)-administered programs, as
summarized in the section-by-section analysis below.
EFFECTIVE DATE: Various, see below. 2023SB-01109-R000677-BA.DOCX
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§ 1 — DSS PAYMENTS TO NON-ICF-ID BOARDING HOMES
Allows DSS to annually provide pro rata rent increases for fair rent additions not
otherwise included in rates beginning in FY 24
By law, DSS generally sets rates for room and board at private
residential facilities and similar facilities operated by regional
educational services centers that are licensed to provide residential care
for people with certain disabilities, but not licensed as intermediate care
facilities for people with intellectual disabilities (ICF-ID). Beginning in
FY 24, the bill allows the DSS commissioner, in her discretion and within
available appropriations, to provide pro rata fair rent increases in each
fiscal year to facilities with documented fair rent additions placed in
service in the cost report years (presumably, the most recently filed cost
report) that are not otherwise included in issued rates.
The bill makes conforming changes and eliminates obsolete
provisions.
EFFECTIVE DATE: July 1, 2023
Background — Related Bill
sHB 6665, § 7, favorably reported by the Appropriations and Human
Services committees, generally caps FY 24 and 25 rates at FY 23 levels
for room and board at non-ICF-ID facilities.
§ 2 — DSS PAYMENTS TO ICF-IDS
Prohibits inflationary adjustments for FYs 22 and 23, generally conforming to current
law, and requires future inflationary adjustments to be based on a GDP deflator and
adjusted by the DSS commissioner as she determines; requires DSS to determine whether
a facility’s change in ownership requires DSS to rebase its costs to calculate payment
rates; allows DSS to provide annual pro rata rent increases beginning in FY 24
For intermediate care facilities for individuals with intellectual
disabilities, the bill prohibits DSS from increasing rates based on
inflation or any inflationary factors for FYs 22 and 23, conforming to
current law that generally caps rates for those years with certain
exceptions. For subsequent fiscal years, the bill requires the DSS
commissioner to adjust any authorized inflationary increase as she
determines, regardless of any other state law or regulation. The bill
requires the inflation rate to be computed based on any percentage 2023SB-01109-R000677-BA.DOCX
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increase in the most recent calendar year average in the gross domestic
product (GDP) deflator over the average for the previous calendar year.
The bill requires DSS to apply any inflationary increase before applying
any other budget adjustment factors.
The bill also requires DSS to determine whether and to what extent a
change in facility ownership requires DSS to rebase the facility’s costs.
It prohibits any inflation adjustment during a year when a facility’s rates
are rebased. The bill allows DSS to give pro rata rent increases to
facilities with documented fair rent additions placed in service in the
cost report years (presumably, the most recently filed cost report) for
each fiscal year beginning with FY 24.
EFFECTIVE DATE: July 1, 2023
Background — Related Bill
sHB 6665, § 8, favorably reported by the Appropriations and Human
Services committees, generally caps FY 24 rates at FY 23 levels and FY
25 rates at FY 24 levels, with certain exceptions.
§ 3 — RESIDENTIAL CARE HOME RATES
Requires inflationary adjustments to be based on a GDP deflator and adjusted by the DSS
commissioner as she determines; requires DSS to determine whether a facility’s change in
ownership requires DSS to rebase its costs to calculate payment rates
The bill requires the DSS commissioner to adjust any authorized
inflationary increase as she determines, regardless of any other state law
or regulation. The inflation rate must be computed based on any
percentage increase in the most recent calendar year average in the GDP
deflator over the average for the previous calendar year. The bill
requires DSS to apply any inflationary increase before applying any
other budget adjustment factors.
The bill also requires DSS to determine whether and to what extent a
change in facility ownership requires DSS to rebase the facility’s costs.
It prohibits any inflation adjustment during a year when a facility’s rates
are rebased.
EFFECTIVE DATE: July 1, 2023 2023SB-01109-R000677-BA.DOCX
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Background — Related Bill
sHB 6665, § 11, favorably reported by the Appropriations and Human
Services committees, requires DSS to determine FY 24 rates for
residential care homes based on 2022 cost report filings and allows other
increases within available appropriations.
§§ 4 & 5 — NURSING HOME RATES
Allows the DSS commissioner to give pro rata fair rent increases, in her discretion and
within available appropriations, to facilities with documented fair rent additions; sets a
schedule for DSS to rebase facility costs; requires future inflationary adjustments to be
based on a GDP deflator and adjusted by the DSS commissioner as she determines; and
makes conforming changes
Existing law requires DSS to implement an acuity -based
reimbursement rate for nursing homes effective July 1, 2022. Acuity-
based rates generally reimburse nursing homes based on the level of
care needed for patients. In practice, DSS is transitioning from a cost-
based system to the acuity-based system over a period of years.
Beginning with FY 23 rates, the law requires DSS to set acuity-based
rates under provisions on case-mix adjustments and geographic peer
groups, among other things.
The bill clarifies that several provisions applicable under the cost-
based methodology are also applicable under the acuity-based
methodology, generally conforming to current practice. These include
provisions:
1. allowing certain costs to exceed maximum amounts for beds
restricted to patients with AIDS, traumatic brain injury, or other
specialized services;
2. requiring DSS to reimburse a facility as though its allowable fair
rent equaled the 25th percentile of the statewide allowable fair
rent if the facility’s actual allowable fair rent is below that level;
3. requiring DSS to revise to 11% the allowance for a facility’s rate
of return on property other than land if the facility’s rate of return
exceeds 11%;
4. requiring facilities to receive cost efficiency adjustments for 2023SB-01109-R000677-BA.DOCX
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indirect costs and administrative and general costs if the facility’s
costs are below the state-wide median costs;
5. requiring facilities or their related realty affiliates that finance or
refinance debt through bonds issued by the Connecticut Health
and Education Facilities Authority (CHEFA) to report to DSS;
6. allowing the DSS commissioner to revise the facility’s fair rent to
reflect any financial benefit the facility or its related realty affiliate
received as a result; and
7. requiring the state and the facility to share the financial benefit
resulting from CHEFA bonds to an extent determined by the DSS
commissioner on a case-by-case basis, reflected as an adjustment
to the facility’s allowable fair rent.
Existing law and the bill require the DSS commissioner to determine
allowable fair rent for real property other than land based on the rate of
return for the cost year in which CHEFA bonds were issued. Existing
law for cost-based methodology limits this requirement to facilities that
opened on or after October 1, 1992.
Existing law applicable to the cost-based reimbursement
methodology additionally (1) requires the DSS commissioner to allow
actual debt service costs for CHEFA bonds if the costs do not exceed
property costs allowable under DSS regulations and (2) allows her to
allow higher debt service costs for good cause.
For FY 22, current law allows the DSS commissioner to give pro rata
fair rent increases, in her discretion and within available appropriations,
to facilities with documented fair rent additions in the 2020 cost year
that are not otherwise included in the issued rates. The bill extends this
provision to future fiscal years beginning with FY 22.
Beginning July 1, 2025, the bill requires DSS to rebase facility costs at
least every four years, but no more frequently than every two years. The
bill prohibits inflationary adjustments in a year when DSS rebases a
facility’s rates. It requires DSS to determine whether and to what extent 2023SB-01109-R000677-BA.DOCX
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a facility’s change in ownership requires DSS to rebase its rates.
The bill requires the DSS commissioner to adjust any authorized
inflationary increase as she determines, regardless of any other state law
or regulation. The inflation rate must be computed based on any
percentage increase in the most recent calendar year average in the GDP
deflator over the average for the previous calendar year. The bill
requires DSS to apply any inflationary increase before applying any
other budget adjustment factors.
The bill specifically requires the DSS commissioner to determine rates
for new facilities under provisions in existing law and the bill on rates
for existing nursing homes.
The bill also makes technical and conforming changes.
EFFECTIVE DATE: Upon passage
Background — Related Bill
sHB 6665, § 9, favorably reported by the Appropriations and Human
Services committees, limits inflationary increases to nursing home rates
for FYs 24 and 25.
COMMITTEE ACTION
Human Services Committee
Joint Favorable Substitute Change of Reference - APP
Yea 21 Nay 0 (03/28/2023)
Appropriations Committee
Joint Favorable Substitute
Yea 42 Nay 7 (04/21/2023)