Connecticut Seal

General Assembly

Amendment

 

February Session, 2014

LCO No. 4582

   
 

*HB0505104582HRO*

Offered by:

 

REP. CAFERO, 142nd Dist.

REP. CANDELORA, 86th Dist.

REP. KLARIDES, 114th Dist.

 

To: Subst. House Bill No. 5051

File No. 291

Cal. No. 171

"AN ACT IMPROVING TRANSPARENCY OF NURSING HOME OPERATIONS. "

Strike everything after the enacting clause and substitute the following in lieu thereof:

"Section 1. (NEW) (Effective July 1, 2014) (a) As used in this section:

(1) "Department" means the Department of Social Services.

(2) "Desk review" means a process involving a review of cost reports pursuant to section 17-311-53 of the department's regulations.

(3) "Cost report" means the Annual Report of Long-Term Care Facility filed with the department pursuant to section 17-311-50 of the department's regulations.

(4) "Significant" means of an amount so large that it can have a material impact based on the size of the organization.

(5) "Operating losses" means the excess of expenses over revenues, exclusive of depreciation and amortization expenses.

(6) "Negative current working capital" means the excess of current liabilities over current assets plus investments, exclusive of liabilities, the repayment of which are guaranteed.

(7) "Current" means, in the context of negative current working capital, liabilities payable within twelve months and assets that are cash and are expected to be converted to cash within twelve months.

(8) "Going concern" means a business that is expected to function without the threat of insolvency or liquidation within the next twelve months.

(9) "Related party" means companies related to such nursing homes through immediate family, common ownership and control or business association with any of the majority owners, operators or officials of the facility.

(b) Auditors under contract with the department shall, during the department's desk review of cost reports filed by each licensed nursing facility, determine whether a nursing home has experienced significant operating losses, significant negative current working capital or undercapitalization for the last two years. If auditors make such a determination, the determination shall constitute probable cause that the nursing home may not be able to continue operating as a going concern. Additional evidence constituting such probable cause includes, but is not limited to, irregularities in general accounting principles and deviation from industry standards. For purposes of this subsection, auditors shall not extend their analysis beyond the last two years, the latest year being the year associated with the cost report last filed by the facility.

(c) If the auditors do find evidence as described in subsection (b) of this section, the auditors may request additional information from the facility's management that in the opinion of the facility's management resolves such concerns.

(d) If, in the auditor's judgment, the information described in subsection (c) of this section is sufficient to mitigate doubt about the facility's ability to operate as a going concern, the auditor shall not seek additional information.

(e) If, in the auditor's judgment, the information described in subsection (c) of this section is not sufficient to mitigate doubt about the facility's ability to operate as a going concern, the auditor shall request, and, if available, the facility shall provide the latest finalized profit and loss statements of each related party to which the facility paid fifty thousand dollars or more for goods, services and supplies during the facility's most recent fiscal year. The auditors shall issue a report to the department that summarizes their findings. "

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2014

New section