Connecticut Seal

General Assembly

Amendment

 

February Session, 2014

LCO No. 5422

   
 

*HB0505105422SRO*

Offered by:

 

SEN. FASANO, 34th Dist.

 

To: Subst. House Bill No. 5051

File No. 729

Cal. No. 537

"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 may, 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 and significant negative current working capital 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 may include irregularities in general accounting principles undercapitalization, 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.

Sec. 2. Section 17b-339 of the 2014 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) There is established a Nursing Home Financial Advisory Committee to examine the financial solvency of nursing homes on an ongoing basis and to support the Departments of Social Services and Public Health in their mission to provide oversight to the nursing home industry on issues concerning the financial solvency of and quality of care provided by nursing homes. The committee shall convene not later than August 1, 2014, and consist of the following members: The Commissioner of Social Services, or [his] the commissioner's designee; the Commissioner of Public Health, or [his] the commissioner's designee; the Secretary of the Office of Policy and Management, or [his] the secretary's designee; the executive director of the Connecticut Health and Education Facilities Authority, or [his] the director's designee; the [president of LeadingAge Connecticut, Inc. or the president's designee; and the executive director of the Connecticut Association of Health Care Facilities, or the executive director's designee] Long-Term Care Ombudsman and two members appointed by the Governor, one of whom shall be a representative of not-for-profit nursing homes and one of whom shall be a representative of for-profit nursing homes. In addition, the Labor Commissioner may appoint a nonvoting member to the committee. The Commissioner of Social Services [or his designee] and the Commissioner of Public Health, or [his designee] their designees shall be the chairpersons of the committee.

(b) The committee [, upon receipt of a report relative to the financial solvency of and quality of care provided by nursing homes in the state, shall recommend appropriate action for improving the financial condition of any nursing home that is in financial distress] shall (1) evaluate any information and data available, including, but not limited to, (A) quality of care, (B) acuity, (C) census, and (D) staffing levels of nursing homes operating in the state to assess the overall infrastructure and projected needs of such homes, and (2) recommend appropriate action consistent with the goals, strategies and long-term care needs set forth in the strategic plan developed pursuant to subsection (c) of section 17b-369 to the Commissioner of Social Services and the Commissioner of Public Health. The Commissioner of Social Services shall submit quarterly reports to the committee concerning pending nursing home requests for interim rate increases. Such reports shall, without identifying any requesting facility by name, list the amount of each increase requested, the reason for the request and the rate that will result if the request is granted.

(c) Not later than January 1, [2010] 2015, and annually thereafter, the committee shall submit a report on its activities to the joint standing committees of the General Assembly having cognizance of matters relating to aging, appropriations and the budgets of state agencies, human services and public health, in accordance with the provisions of section 11-4a.

(d) Not later than [January 1, 2010] October 1, 2014, and quarterly thereafter, the committee shall meet with the chairpersons and ranking members of the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, human services and public health [, and the Long-Term Care Ombudsman] to discuss activities of the committee relating to the financial solvency of and quality of care provided by nursing homes.

Sec. 3. (NEW) (Effective from passage) Upon the request of the Department of Social Services, any licensed nursing facility that receives funding in accordance with section 17b-340 of the general statutes, that (1) is placed in receivership pursuant to sections 19a-541 to 19a-549a, inclusive, of the general statutes, (2) has filed a petition for relief under the United States Bankruptcy Code, or (3) has submitted a request to close the facility pursuant to section 17b-352 of the general statutes, shall provide a profit and loss statement for any related party that receives fifty thousand dollars or more a year for goods, fees and services. For purposes of this section, a "related party" includes 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. "

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

Section 1

July 1, 2014

New section

Sec. 2

from passage

17b-339

Sec. 3

from passage

New section