December 29, 2011
OLR BACKGROUNDER: DSS REIMBURSEMENT OF STRIKE-RELATED COSTS AT NURSING HOMES
By: Lee R. Hansen, Legislative Analyst II
This report discusses how the Department of Social Services (DSS) handles Medicaid reimbursements to nursing homes during labor strikes.
DSS sets the Medicaid per diem rates for the state's nursing homes each year based primarily on cost reports submitted by the facilities. DSS sets one rate for a home's “skilled” beds (the chronic and convalescent or CCH rate) and a separate, lower one for its intermediate care beds, if it has them. The department reimburses nursing homes at the applicable per diem rate for each of their Medicaid eligible residents. These reimbursements continue regardless of whether or not workers at a nursing home are on strike.
STRIKE COST REIMBURSEMENTS
In addition to the Medicaid per diem rate, CGS § 17b-340(a) authorizes DSS to reimburse nursing homes for extraordinary and unanticipated costs necessary to avoid an immediate negative impact on the health and safety of residents, including under federal regulations, certain costs incurred during labor strikes.
According to the DSS Guidelines for Strike Cost Reimbursement, the department reimburses a nursing home facility for its allowable strike costs based on the facility's Medicaid utilization rate for the most recent year. A facility's Medicaid utilization rate is the number of patient days of care it furnished to Medicaid beneficiaries as a percentage of the total number of patient days of care it provided during the year. For example, a nursing home with $100,000 in eligible strike related costs and a 70% utilization percentage would be reimbursed $70,000.
Reimbursable strike costs can include staffing, training for replacement workers, special transportation arrangements to ensure the safe arrival and departure of replacement workers, additional security costs, and legal fees directly associated with the health and safety of residents. Regarding the cost of replacing striking workers, DSS only reimburses the nursing home for the replacement staff costs that exceed what staff costs would have been in the absence of a strike. However, if replacement labor costs are lower than what staff costs would have been, DSS will reduce its overall strike related reimbursement to the nursing home by the difference.
DSS policy considers a strike to end on the date workers make an unconditional offer to return to work. Although there are some exceptions, it generally will not reimburse strike related expenses incurred after that date. Requests for strike related reimbursements must be submitted to DSS within 45 days after the strike ends. Lockouts, in which the workers have made an unconditional offer to work, but are prevented from working by the facility, are not eligible for strike cost reimbursements. In addition, if the National Labor Relations Board finds that a nursing home facility did not comply with the National Labor Relations Act during a strike, DSS will not reimburse any strike expenses related to the violation and can recover reimbursements that have already been distributed.