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General Assembly Committee Bill No. 805
January Session, 2025
LCO No. 3806
Referred to Committee on HUMAN SERVICES
Introduced by:
(HS)
AN ACT REQUIRING NURSING HOMES TO SPEND NOT LESS THAN
EIGHTY PER CENT OF REVENUES ON DIRECT PATIENT CARE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subsection (a) of section 17b-340d of the general statutes is 1
repealed and the following is substituted in lieu thereof (Effective July 1, 2
2025): 3
(a) The Commissioner of Social Services shall implement an acuity-4
based methodology for Medicaid reimbursement of nursing home 5
services effective July 1, 2022. Notwithstanding section 17b-340, for the 6
fiscal year ending June 30, 2023, and annually thereafter, the 7
Commissioner of Social Services shall establish Medicaid rates paid to 8
nursing home facilities based on cost years ending on September 9
thirtieth in accordance with the following: 10
(1) Case-mix adjustments to the direct care component, which will be 11
based on Minimum Data Set resident assessment data as well as cost 12
data reported for the cost year ending September 30, 2019, shall be made 13
effective beginning July 1, 2022, and updated every quarter thereafter. 14
After modeling such case-mix adjustments, the Commissioner of Social 15 Committee Bill No. 805
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Services shall evaluate impact on a facility by facility basis and, not later 16
than October 1, 2021, (A) make recommendations to the Secretary of the 17
Office of Policy and Management, and (B) submit a report on the 18
recommendations, in accordance with the provisions of section 11-4a, to 19
the joint standing committees of the General Assembly having 20
cognizance of matters relating to appropriations and the budgets of state 21
agencies and human services on any adjustments needed to facilitate the 22
transition to the new methodology on July 1, 2022. This evaluation may 23
include a review of inflationary allowances, case mix and budget 24
adjustment factors and stop loss and stop gain corridors and the ability 25
to make such adjustments within available appropriations. 26
(2) Beginning July 1, 2022, facilities [will be required to] shall comply 27
with collection and reporting of quality metrics as specified by the 28
Department of Social Services, after consultation with the nursing home 29
industry, consumers, employees and the Department of Public Health. 30
Rate adjustments based on performance on quality metrics [will] shall 31
be phased in, beginning July 1, 2022, with a period of reporting only. 32
Effective July 1, 2023, the Department of Social Services shall issue 33
individualized reports annually to each nursing home facility showing 34
the impact to the Medicaid rate for such home based on the quality 35
metrics program. A nursing home facility receiving an individualized 36
quality metrics report may use such report to evaluate the impact of the 37
quality metrics program on said facility's Medicaid reimbursement. Not 38
later than June 30, 2025, the department shall submit a report, in 39
accordance with the provisions of section 11-4a, to the joint standing 40
committees of the General Assembly having cognizance of matters 41
relating to appropriations and the budgets of state agencies and human 42
services on the quality metrics program. Such report shall include 43
information regarding individualized reports and the anticipated 44
impact on nursing homes if the state were to implement a rate withhold 45
on nursing homes that fail to meet certain quality metrics. 46
(3) Geographic peer groupings of facilities shall be established by the 47
Department of Social Services pursuant to regulations adopted in 48
accordance with subsection (b) of this section. 49 Committee Bill No. 805
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(4) Allowable costs shall be divided into the following five cost 50
components: (A) Direct costs, which shall include salaries for nursing 51
personnel, related fringe benefits and costs for nursing personnel 52
supplied by a temporary nursing services agency; (B) indirect costs, 53
which shall include professional fees, dietary expenses, housekeeping 54
expenses, laundry expenses, supplies related to patient care, salaries for 55
indirect care personnel and related fringe benefits; (C) fair rent, which 56
shall be defined in regulations adopted in accordance with subsection 57
(b) of this section; (D) capital-related costs, which shall include property 58
taxes, insurance expenses, equipment leases and equipment 59
depreciation; and (E) administrative and general costs, which shall 60
include maintenance and operation of plant expenses, salaries for 61
administrative and maintenance personnel and related fringe benefits. 62
For (i) direct costs, the maximum cost shall be equal to one hundred 63
thirty-five per cent of the median allowable cost of that peer grouping; 64
(ii) indirect costs, the maximum cost shall be equal to one hundred 65
fifteen per cent of the state-wide median allowable cost; (iii) fair rent, 66
the amount shall be calculated utilizing the amount approved pursuant 67
to section 17b-353; (iv) capital-related costs, there shall be no maximum; 68
and (v) administrative and general costs, the maximum shall be equal to 69
the state-wide median allowable cost. For purposes of this subdivision, 70
"temporary nursing services agency" and "nursing personnel" have the 71
same meaning as provided in section 19a-118. 72
(5) Costs in excess of the maximum amounts established under this 73
subsection shall not be recognized as allowable costs, except that the 74
commissioner may establish rates whereby allowable costs may exceed 75
such maximum amounts for beds which are restricted to use by patients 76
with acquired immune deficiency syndrome, traumatic brain injury or 77
other specialized services. 78
(6) On or after June 30, 2022, the commissioner may, in the 79
commissioner's discretion and within available appropriations, provide 80
pro rata fair rent increases to facilities which have documented fair rent 81
additions placed in service in the most recently filed cost report that are 82
not otherwise included in the rates issued. The commissioner may 83 Committee Bill No. 805
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provide, within available appropriations, pro rata fair rent increases, 84
which may, at the discretion of the commissioner, include increases for 85
facilities which have undergone a material change in circumstances 86
related to fair rent additions in the most recently filed cost report. The 87
commissioner may allow minimum fair rent as the basis upon which 88
reimbursement associated with improvements to real property is 89
added. 90
(7) For the purpose of determining allowable fair rent, a facility with 91
allowable fair rent less than the twenty-fifth percentile of the state-wide 92
allowable fair rent shall be reimbursed as having allowable fair rent 93
equal to the twenty-fifth percentile of the state-wide allowable fair rent. 94
Any facility with a rate of return on real property other than land in 95
excess of eleven per cent shall have such allowance revised to eleven per 96
cent. Any facility or its related realty affiliate which finances or 97
refinances debt through bonds issued by the Connecticut Health and 98
Education Facilities Authority shall report the terms and conditions of 99
such financing or refinancing to the Commissioner of Social Services not 100
later than thirty days after completing such financing or refinancing. 101
The commissioner may revise the facility's fair rent component of its rate 102
to reflect any financial benefit the facility or its related realty affiliate 103
received as a result of such financing or refinancing. The commissioner 104
shall determine allowable fair rent for real property other than land 105
based on the rate of return for the cost year in which such bonds were 106
issued. The financial benefit resulting from a facility financing or 107
refinancing debt through such bonds shall be shared between the state 108
and the facility to an extent determined by the commissioner on a case-109
by-case basis and shall be reflected in an adjustment to the facility's 110
allowable fair rent. 111
(8) A facility shall receive cost efficiency adjustments for indirect costs 112
and for administrative and general costs if such costs are below the 113
state-wide median costs. The cost efficiency adjustments shall equal 114
twenty-five per cent of the difference between allowable reported costs 115
and the applicable median allowable cost established pursuant to 116
subdivision (4) of this subsection. 117 Committee Bill No. 805
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(9) On and after July 1, 2025, costs shall be rebased no more frequently 118
than every two years and no less frequently than every four years, as 119
determined by the commissioner. There shall be no inflation adjustment 120
during a year in which a facility's rates are rebased. The commissioner 121
shall determine whether and to what extent a change in ownership of a 122
facility shall occasion the rebasing of the facility's costs. 123
(10) The method of establishing rates for new facilities shall be 124
determined by the commissioner in accordance with the provisions of 125
this subsection. 126
(11) There shall be no increase to rates based on inflation or any 127
inflationary factor for the fiscal years ending June 30, 2022, and June 30, 128
2023, unless otherwise authorized under subdivision (1) of this 129
subsection. Notwithstanding section 17-311-52 of the regulations of 130
Connecticut state agencies, for the fiscal years ending June 30, 2024, and 131
June 30, 2025, there shall be no inflationary increases to rates beyond 132
those already factored into the model for the transition to an acuity-133
based reimbursement system. Notwithstanding any other provisions of 134
this chapter, any subsequent increase to allowable operating costs, 135
excluding fair rent, shall be inflated by the gross domestic product 136
deflator when funding is specifically appropriated for such purposes in 137
the enacted budget. The rate of inflation shall be computed by 138
comparing the most recent rate year to the average of the gross domestic 139
product deflator for the previous four fiscal quarters ending March 140
thirty-first. Any increase to rates based on inflation shall be applied 141
prior to the application of any other budget adjustment factors that may 142
impact such rates. 143
(12) For the fiscal year beginning July 1, 2025, and each fiscal year 144
thereafter, the commissioner shall require a nursing home facility to 145
spend not less than eighty per cent of funding received from Medicaid, 146
Medicare and all other payment sources on direct care of residents, 147
provided the commissioner may adjust the percentage spent on direct 148
care for a nursing home facility with a capital improvement project or a 149
fair rent increase approved by the commissioner. For the fiscal year 150 Committee Bill No. 805
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beginning July 1, 2027, and each fiscal year thereafter, the commissioner 151
may decrease rates of Medicaid reimbursement for any nursing home 152
that does not comply with the provisions of this subdivision. For 153
purposes of this subdivision, (A) "direct care" means hands-on care 154
provided to a facility resident by nursing personnel, including, but not 155
limited to, assistance with feeding, bathing, toileting, dressing, lifting or 156
moving residents, medication administration and salary, fringe benefits 157
and supplies related to direct care; and (B) "nursing personnel" means 158
an advanced practice registered nurse, licensed pursuant to chapter 378, 159
a registered nurse or practical nurse, licensed pursuant to chapter 378, 160
or a nurse's aide, registered pursuant to chapter 378a. 161
[(12)] (13) For purposes of computing minimum allowable patient 162
days, utilization of a facility's certified beds shall be determined at a 163
minimum of ninety per cent of capacity, except for facilities that have 164
undergone a change in ownership, new facilities, and facilities which 165
are certified for additional beds which may be permitted a lower 166
occupancy rate for the first three months of operation after the effective 167
date of licensure. 168
[(13)] (14) Rates determined under this section shall comply with 169
federal laws and regulations. 170
[(14)] (15) The Commissioner of Social Services may authorize an 171
interim rate for a facility demonstrating circumstances particular to that 172
individual facility impacting facility finances or costs not reflected in the 173
underlying rates. 174
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025 17b-340d(a)
HS Joint Favorable