House Bill No. 5050
House Bill No. 5050
PUBLIC ACT NO. 98-156
AN ACT CONCERNING THE MEDICAID RATE FOR NURSING
FACILITIES.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Subsection (f) of section 17b-340
of the general statutes, as amended by section 50
of public act 97-11 of the June 18 special
session, is repealed and the following is
substituted in lieu thereof:
(f) For the fiscal year ending June 30, 1992,
the rates paid by or for persons aided or cared
for by the state or any town in this state to
facilities for room, board and services specified
in licensing regulations issued by the licensing
agency, except intermediate care facilities for
the mentally retarded and residential care homes,
shall be based on the cost year ending September
30, 1989. For the fiscal years ending June 30,
1993, and June 30, 1994, such rates shall be based
on the cost year ending September 30, 1990.
Notwithstanding the provisions of section 17b-344,
such rates shall be determined by the Commissioner
of Social Services in accordance with this section
and the regulations of Connecticut state agencies
promulgated by the commissioner and in effect on
April 1, 1991, except that:
(1) Allowable costs shall be divided into the
following five cost components: Direct costs,
which shall include salaries for nursing
personnel, related fringe benefits and nursing
pool costs; indirect costs, which shall include
professional fees, dietary expenses, housekeeping
expenses, laundry expenses, supplies related to
patient care, salaries for indirect care personnel
and related fringe benefits; fair rent, which
shall be defined in accordance with subsection (f)
of section 17-311-52 of the regulations of
Connecticut state agencies; capital-related costs,
which shall include property taxes, insurance
expenses, equipment leases and equipment
depreciation; and administrative and general
costs, which shall include maintenance and
operation of plant expenses, salaries for
administrative and maintenance personnel and
related fringe benefits. The commissioner may
provide a rate adjustment for nonemergency
transportation services required by nursing
facility residents. Such adjustment shall be a
fixed amount determined annually by the
commissioner based upon a review of costs and
other associated information. Allowable costs
shall not include costs for ancillary services
payable under Part B of the Medicare program.
(2) Two geographic peer groupings of
facilities shall be established for each level of
care, as defined by the Department of Social
Services for the determination of rates, for the
purpose of determining allowable direct costs. One
peer grouping shall be comprised of those
facilities located in Fairfield County. The other
peer grouping shall be comprised of facilities
located in all other counties.
(3) For the fiscal year ending June 30, 1992,
per diem maximum allowable costs for each cost
component shall be as follows: For direct costs,
the maximum shall be equal to one hundred forty
per cent of the median allowable cost of that peer
grouping; for indirect costs, the maximum shall be
equal to one hundred thirty per cent of the
state-wide median allowable cost; for fair rent,
the amount shall be calculated utilizing the
amount approved by the Office of Health Care
Access pursuant to section 19a-638; for
capital-related costs, there shall be no maximum;
and for administrative and general costs, the
maximum shall be equal to one hundred twenty-five
per cent of the state-wide median allowable cost.
For the fiscal year ending June 30, 1993, per diem
maximum allowable costs for each cost component
shall be as follows: For direct costs, the maximum
shall be equal to one hundred forty per cent of
the median allowable cost of that peer grouping;
for indirect costs, the maximum shall be equal to
one hundred twenty-five per cent of the state-wide
median allowable cost; for fair rent, the amount
shall be calculated utilizing the amount approved
by the Office of Health Care Access pursuant to
section 19a-638; for capital-related costs, there
shall be no maximum; and for administrative and
general costs the maximum shall be equal to one
hundred fifteen per cent of the state-wide median
allowable cost. For the fiscal year ending June
30, 1994, per diem maximum allowable costs for
each cost component shall be as follows: For
direct costs, the maximum shall be equal to one
hundred thirty-five per cent of the median
allowable cost of that peer grouping; for indirect
costs, the maximum shall be equal to one hundred
twenty per cent of the state-wide median allowable
cost; for fair rent, the amount shall be
calculated utilizing the amount approved by the
Office of Health Care Access pursuant to section
19a-638; for capital-related costs, there shall be
no maximum; and for administrative and general
costs the maximum shall be equal to one hundred
ten per cent of the state-wide median allowable
cost. For the fiscal year ending June 30, 1995,
per diem maximum allowable costs for each cost
component shall be as follows: For direct costs,
the maximum shall be equal to one hundred
thirty-five per cent of the median allowable cost
of that peer grouping; for indirect costs, the
maximum shall be equal to one hundred twenty per
cent of the state-wide median allowable cost; for
fair rent, the amount shall be calculated
utilizing the amount approved by the Office of
Health Care Access pursuant to section 19a-638;
for capital-related costs, there shall be no
maximum; and for administrative and general costs
the maximum shall be equal to one hundred five per
cent of the state-wide median allowable cost. For
the fiscal year ending June 30, 1996, and any
succeeding fiscal year, per diem maximum allowable
costs for each cost component shall be as follows:
For direct costs, the maximum shall be equal to
one hundred thirty-five per cent of the median
allowable cost of that peer grouping; for indirect
costs, the maximum shall be equal to one hundred
fifteen per cent of the state-wide median
allowable cost; for fair rent, the amount shall be
calculated utilizing the amount approved pursuant
to section 19a-638; for capital-related costs,
there shall be no maximum; and for administrative
and general costs the maximum shall be equal to
the state-wide median allowable cost. Costs in
excess of the maximum amounts established under
this subsection shall not be recognized as
allowable costs, except that the Commissioner of
Social Services (A) may allow costs in excess of
maximum amounts for any facility with patient days
covered by Medicare, including days requiring
coinsurance, in excess of twelve per cent of
annual patient days which also has patient days
covered by Medicaid in excess of fifty per cent of
annual patient days; (B) may establish a pilot
program whereby costs in excess of maximum amounts
shall be allowed for beds in a nursing home which
has a managed care program and is affiliated with
a hospital licensed under chapter 368v; and (C)
may establish rates whereby allowable costs may
exceed such maximum amounts for beds approved on
or after July 1, 1991, which are restricted to use
by patients with acquired immune deficiency
syndrome or traumatic brain injury.
(4) For the fiscal year ending June 30, 1992,
(A) no facility shall receive a rate that is less
than the rate it received for the rate year ending
June 30, 1991; (B) no facility whose rate, if
determined pursuant to this subsection, would
exceed one hundred twenty per cent of the
state-wide median rate, as determined pursuant to
this subsection, shall receive a rate which is
five and one-half per cent more than the rate it
received for the rate year ending June 30, 1991;
and (C) no facility whose rate, if determined
pursuant to this subsection, would be less than
one hundred twenty per cent of the state-wide
median rate, as determined pursuant to this
subsection, shall receive a rate which is six and
one-half per cent more than the rate it received
for the rate year ending June 30, 1991. For the
fiscal year ending June 30, 1993, no facility
shall receive a rate that is less than the rate it
received for the rate year ending June 30, 1992,
or six per cent more than the rate it received for
the rate year ending June 30, 1992. For the fiscal
year ending June 30, 1994, no facility shall
receive a rate that is less than the rate it
received for the rate year ending June 30, 1993,
or six per cent more than the rate it received for
the rate year ending June 30, 1993. For the fiscal
year ending June 30, 1995, no facility shall
receive a rate that is more than five per cent
less than the rate it received for the rate year
ending June 30, 1994, or six per cent more than
the rate it received for the rate year ending June
30, 1994. For the fiscal years ending June 30,
1996, and June 30, 1997, no facility shall receive
a rate that is more than three per cent more than
the rate it received for the prior rate year. For
the fiscal year ending June 30, 1998, a facility
shall receive a rate increase that is not more
than two per cent more than the rate that the
facility received in the prior year. For the
fiscal year ending June 30, 1999, a facility shall
receive a rate increase that is not more than
[two] THREE per cent more than the RATE THAT THE
facility received in the prior year and that is
not less than one per cent more than the RATE THAT
THE facility received in the prior year. FOR THE
FISCAL YEAR ENDING JUNE 30, 2000, AND ANY
SUCCEEDING FISCAL YEAR, NO FACILITY SHALL RECEIVE
A RATE THAT IS MORE THAN THE RATE IT RECEIVED IN
THE PRIOR YEAR INCREASED BY THE ANNUAL INCREASE IN
THE CONSUMER PRICE INDEX (ALL URBAN) FOR THE MOST
RECENT CALENDAR YEAR. The Commissioner of Social
Services may exclude fair rent from any rate
increase maximums established pursuant to this
subdivision for a facility which has undergone a
material change in circumstances related to fair
rent.
(5) For the purpose of determining allowable
fair rent, a facility with allowable fair rent
less than the twenty-fifth percentile of the
state-wide allowable fair rent shall be reimbursed
as having allowable fair rent equal to the
twenty-fifth percentile of the state-wide
allowable fair rent, provided for the fiscal years
ending June 30, 1996, and June 30, 1997, the
reimbursement may not exceed the twenty-fifth
percentile of the state-wide allowable fair rent
for the fiscal year ending June 30, 1995.
Beginning with the fiscal year ending June 30,
1996, any facility with a rate of return on real
property other than land in excess of eleven per
cent shall have such allowance revised to eleven
per cent. Any facility or its related realty
affiliate which finances or refinances debt
through bonds issued by the State of Connecticut
Health and Education Facilities Authority shall
report the terms and conditions of such financing
or refinancing to the Commissioner of Social
Services within thirty days of completing such
financing or refinancing. The Commissioner of
Social Services may revise the facility's fair
rent component of its rate to reflect any
financial benefit the facility or its related
realty affiliate received as a result of such
financing or refinancing, including but not
limited to, reductions in the amount of debt
service payments or period of debt repayment. The
commissioner shall allow actual debt service costs
for bonds issued by the State of Connecticut
Health and Educational Facilities Authority if
such costs do not exceed property costs allowed
pursuant to subsection (f) of section 17-311-52 of
the regulations of Connecticut state agencies,
provided the commissioner may allow higher debt
service costs for such bonds for good cause. For
facilities which first open on or after October 1,
1992, the commissioner shall determine allowable
fair rent for real property other than land based
on the rate of return for the cost year in which
such bonds were issued. The financial benefit
resulting from a facility financing or refinancing
debt through such bonds shall be shared between
the state and the facility to an extent determined
by the commissioner on a case-by-case basis and
shall be reflected in an adjustment to the
facility's allowable fair rent.
(6) A facility shall receive cost efficiency
adjustments for indirect costs and for
administrative and general costs if such costs are
below the state-wide median costs. The cost
efficiency adjustments shall equal twenty-five per
cent of the difference between allowable reported
costs and the applicable median allowable cost
established pursuant to this subdivision.
(7) For the fiscal year ending June 30, 1992,
allowable operating costs, excluding fair rent,
shall be inflated using the Regional Data
Resources Incorporated McGraw-Hill Health Care
Costs: Consumer Price Index (all urban)--All Items
minus one and one-half per cent. For the fiscal
year ending June 30, 1993, allowable operating
costs, excluding fair rent, shall be inflated
using the Regional Data Resources Incorporated
McGraw-Hill Health Care Costs: Consumer Price
Index (all urban)--All Items minus one and
three-quarters per cent. For the fiscal years
ending June 30, 1994, and June 30, 1995, allowable
operating costs, excluding fair rent, shall be
inflated using the Regional Data Resources
Incorporated McGraw-Hill Health Care Costs:
Consumer Price Index (all urban)--All Items minus
two per cent. For the fiscal year ending June 30,
1996, allowable operating costs, excluding fair
rent, shall be inflated using the Regional Data
Resources Incorporated McGraw-Hill Health Care
Costs: Consumer Price Index (all urban)--All Items
minus two and one-half per cent. For the fiscal
year ending June 30, 1997, allowable operating
costs, excluding fair rent, shall be inflated
using the Regional Data Resources Incorporated
McGraw-Hill Health Care Costs: Consumer Price
Index (all urban)--All Items minus three and
one-half per cent. For the fiscal year ending June
30, 1992, and any succeeding fiscal year,
allowable fair rent shall be those reported in the
annual report of long-term care facilities for the
cost year ending the immediately preceding
September thirtieth. The inflation index to be
used pursuant to this subsection shall be computed
to reflect inflation between the midpoint of the
cost year through the midpoint of the rate year.
The Department of Social Services shall study
methods of reimbursement for fair rent and shall
report its findings and recommendations to the
joint standing committee of the General Assembly
having cognizance of matters relating to human
services on or before January 15, 1993.
(8) On and after July 1, 1994, costs shall be
rebased no more frequently than every two years
and no less frequently than every four years, as
determined by the commissioner. The commissioner
shall determine whether and to what extent a
change in ownership of a facility shall occasion
the rebasing of the facility's costs.
(9) The method of establishing rates for new
facilities shall be determined by the commissioner
in accordance with the provisions of this
subsection.
(10) Rates determined under this section
shall comply with federal laws and regulations.
(11) For the fiscal year ending June 30,
1992, and any succeeding fiscal year, one-half of
the initial amount payable in June by the state to
a facility pursuant to this subsection shall be
paid to the facility in June and the balance of
such amount shall be paid in July.
(12) Notwithstanding the provisions of this
subsection, interim rates issued for facilities on
and after July 1, 1991, shall be subject to
applicable fiscal year cost component limitations
established pursuant to subdivision (3) of this
subsection.
(13) A chronic and convalescent nursing home
having an ownership affiliation with and operated
at the same location as a chronic disease hospital
may request that the commissioner approve an
exception to applicable rate-setting provisions
for chronic and convalescent nursing homes and
establish a rate for the fiscal years ending June
30, 1992, and June 30, 1993, in accordance with
regulations in effect June 30, 1991. Any such rate
shall not exceed one hundred sixty-five per cent
of the median rate established for chronic and
convalescent nursing homes established under this
section for the applicable fiscal year.
(14) For the fiscal year ending June 30,
1994, and any succeeding fiscal year, for purposes
of computing minimum allowable patient days,
utilization of a facility's certified beds shall
be determined at a minimum of ninety-five per cent
of capacity, except for new facilities and
facilities which are certified for additional beds
which may be permitted a lower occupancy rate for
the first three months of operation after the
effective date of licensure.
Sec. 2. This act shall take effect July 1,
1998.
Approved June 4, 1998