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Bill requiring nursing homes to spend more on direct care won’t advance

Medicaid covers the cost of more than 70% of all nursing home care in Connecticut, while Medicare covers about 15%.
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Medicaid covers the cost of more than 70% of all nursing home care in Connecticut, while Medicare covers about 15%.

A bill that would require the state’s nursing homes to use 90% of their Medicaid funding on direct care for residents won’t advance out of the legislature’s Aging Committee this session, but proponents vowed to revive the measure next year.

The controversial proposal drew support from advocates who want greater transparency from the industry and a guarantee that most of the funding is being spent on resident care. Nursing home executives testified against the bill, saying the mandate would put difficult constraints on spending.

Direct care is defined as the hands-on care provided to residents by nursing home workers, including assistance with feeding, bathing, toileting, dressing and medication administration, lifting or moving residents, and the salaries, benefits and supplies related to those services.

Medicaid covers the cost of more than 70% of all nursing home care in Connecticut, while Medicare covers about 15%. The industry also gets some funds from private payers.

Lawmakers said the short legislative session, which this year is only 12 weeks, and a bevy of concerns left to resolve caused them to shelve the proposal. Members of the Aging Committee wrapped up their business Thursday, a week ahead of their deadline to advance bills.

“There were so many questions from so many representatives and senators that we thought it was best to work on that,” said Rep. Jane Garibay, a Windsor Democrat who is a co-chair of the Aging Committee. “We’re not discarding it. We think it’s very, very important. We need to work on it during the year [to be ready] for next session.

“We want to know that the money taxpayers are giving is being spent on what it should be spent on.”

Advocates had called on the state to adopt the proposal, saying it would give the public a clearer look at current spending and improve care for the elderly and people with disabilities.

In addition to the direct care spending requirement, the bill mandates that nursing home officials include plain language summaries of spending in their annual cost reports filed with the state.

“The current cost reports are difficult to decipher. These [plain language] summaries will shed welcome and long needed light on how nursing homes are actually spending the many Medicaid dollars paid to them each year for the care of vulnerable residents,” Jean Mills Aranha, an attorney with Connecticut Legal Services, wrote to lawmakers.

At a public hearing this week, Mairead Painter, the state’s long-term care ombudswoman, told legislators that holding nursing home officials accountable for how they spend Medicaid money is “incredibly important.”

“It is critical that we prioritize the care and services for residents and their quality of life,” she said. “This can’t be achieved when large portions of the funding coming into the building are spent on management and other fees that don’t directly support the residents’ wellbeing.”

Anna Doroghazi, associate director of advocacy and outreach for the AARP in Connecticut, said that while the state has some good nursing homes, “there’s a big gap between your high performers and low performers.”

“Facilities that invest more in their staff and residents have better outcomes,” she said. “And there’s really frightening data out there that show what happens when nursing homes don’t make those investments but instead treat the facility like an investment opportunity.”

Some nursing homes are using Medicaid funds to support exorbitant salaries for chief executive officers, chief financial officers and other executives, as well as to cover administrative fees, Jesse Martin, a vice president with 1199 SEIU, testified. His union represents 7,000 nursing home and hospital workers in Connecticut.

“One of my roles in the union is negotiating contracts on behalf of our members in nursing homes. I’ll be quite frank: We believe that Medicaid dollars are not being spent on direct care,” he said.

Sen. Patricia Billie Miller, D-Haven, who is also a co-chair of the Aging Committee, was supportive of the measure. Billie Miller said she was unhappy with the care her late father received while he was living in a nursing home.

“I saw the treatment that my father received. And so in speaking to the advocates who brought this to my attention, I understood. I could relate to it,” she said. “Patients are getting cold food; some are not being taken care of properly. And so they just want to make sure that patients are being taken care of, and that the monies nursing homes are receiving are going to the direct care of the patients.”

Nursing home leaders have spoken out against the measure. Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, which represents 145 of the state’s nursing homes, said several different types of expenses are essential – whether it’s staffing for direct care or maintenance, rent and property taxes.

“Mandating 90% of Medicaid funding be spent on direct care would unsatisfactorily leave only 10% of the overall Medicaid funding for all other nursing home services and supports,” he testified.

“We favor a focus on elevating the status and importance of long-term care staff through recruitment and retention strategies and providing long underfunded nursing homes with the financial resources needed to address these staffing issues.”

Mag Morelli, president of LeadingAge Connecticut, which represents more than 30 nonprofit nursing homes, said the measure excluded costs critical to providing resident care but that don’t meet the definition of direct care, such as heat, utilities, food, housekeeping, social work, physical therapy, recreational therapy and nutritional counseling.

“The current proposal to restrict the spending on these goods and services would be both unworkable and would not be in the best interest of the nursing home resident,” she said.

Three neighboring states have enacted reforms that require nursing homes to set aside a predetermined amount of money for direct care (and limit what they can spend on other expenses, including administrative costs and salaries): New York, New Jersey and Massachusetts.

In New York, nursing homes must spend at least 70% of their overall revenue on care for residents starting next year. At least 40% of that must go toward staffing for direct care.

Massachusetts’ edict requires nursing homes to apportion 75% of their revenues for resident care, and a mandate in New Jersey compels those facilities to spend 90% on resident care, though regulators have suggested that the rule apply only to Medicaid revenue.

The states’ requirements mark the first time that nursing homes have been told how to spend funds from the government and residents, according to Kaiser Health News.

When the bill is resurrected next year, one issue legislators are expected to look at is whether nursing homes should devote a percentage of Medicaid funding to direct care or a percentage of their total revenue, Garibay said.

“Is it just Medicaid money that we want to legislate be spent [for direct care], or overall?” she said. “It could go either way.”

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