June 18, 2004
PRIVATE PAY RATE LIMITS AT NURSING HOMES, HOME HEALTH CARE AGENCIES, AND ASSISTED LIVING SERVICES AGENCIES
By: Helga Niesz, Principal Analyst
You asked whether rates charged to private pay patients (those who pay for their own care without state assistance) at nursing homes, home health care agencies, or assisted living services agencies are regulated and, if not, whether they were ever regulated.
Neither the state nor the federal government limits what any of these entities can charge patients who pay privately for their services. The state limits rates it pays these entities for an individual receiving assistance through Medicaid or other medical assistance programs (CGS §§ 17b-242, 17b-340, 17b-342). The federal government sets the rates when the Medicare program pays. And private insurance companies often negotiate their own limits on what they will pay these entities.
Historically, the state regulated private pay nursing home rates until 1991, when PA 91-8, June Special Session deregulated them (CGS § 17b-341). Under prior law, the Department of Income Maintenance, which was the predecessor of the current Department of Social Services (DSS) annually determined the private pay rates in all nursing homes. These rates were the Medicaid rate for a particular room plus a percentage of the statewide median Medicaid rate. Now, nursing homes only report private pay rates to DSS. The enclosed OLR Report 2000-R-1002 provides more information on nursing homes' rate history.
For home health care agencies, the state regulated private pay rates until 1999, when PA 99-130 eliminated DSS's authority to regulate them. The agencies must still report these rates to DSS.
The state has never regulated private pay rates for assisted living services. This is a newer type of service, which at first was offered only in private facilities and not covered by Medicaid. In recent years, the state has offered state-funded and Medicaid assistance in limited demonstration projects and, for these, it limits what participating assisted living services agencies can charge people receiving assistance.