DSS commissioner: Nursing home costs won’t be as bad as feared

Connecticut’s social services commissioner on Wednesday walked back earlier testimony that the state could owe as much as $55 million to nursing homes because of enhanced staffing standards imposed for 10 months through early January.

But despite Commissioner Andrea Barton Reeves’ assurances that the impact on state finances would be much less than she originally stated, it remained unclear whether the costs nursing homes faced were significantly smaller.

“We do estimate it as far, far lower than $55 million, and that is what I really should have said during the [earlier] hearing,” Reeves said, withdrawing a projection she offered Monday before the Appropriations Committee. “I’m sorry I did not have all those talking points with me at the moment.” She did not offer legislators a revised number.

“No problem,” said Rep. Toni E. Walker, D-New Haven, co-chairwoman of the committee. “We all have a stumble.”

The $55 million Reeves referenced involved a survey of nursing homes and costs they faced for implementing enhanced staffing standards that the Department of Public Health enforced between March 1, 2023, and Jan. 5 of this year.

Minimum hours of daily direct care rose from 1.9 to 3 hours per patient under a law the General Assembly passed in May 2021. The change took effect in January 2022.

[RELATED: Disputed nursing home staffing policy will cost CT tens of millions]

Public Health Commissioner Manisha Juthani, who had to draft regulations to implement this, broke down the 3-hour daily minimum to include at least 0.84 hours of care from registered nurses and at least 2.16 hours of care by aides.

But the nursing home industry, which previously had great discretion to apportion staff to meet minimum care requirements, argued this was major change, wasn’t what legislators intended and would boost costs dramatically. The state is responsible for covering much of the expenses homes face to enhance staff. 

Legislative analysts had estimated — before Juthani imposed her standard — that it would cost no more than $1 million per year to go from 1.9 hours per patient per day to 3 hours. And because state aid for nursing homes is provided through the federal Medicaid program, Connecticut’s share of that $1 million cost would be roughly half, or $500,000, with the rest coming from Washington.

And while the public health commissioner eventually scrapped that enhanced staffing policy nearly two months ago, she said through a spokesman this week that it was an appropriate interpretation of the law and legislative intent.

“The primary rationale for requiring separate specific minimum hours for licensed nursing personnel and nurse aide personnel was to ensure that nursing home residents received a minimum level of nurse aide care, which typically focuses on helping residents with activities of daily living, such as bathing, feeding, dressing and toileting,” said Juthani’s spokesman, Chris Boyle.

Still, lawmakers have been trying to learn for weeks how much nursing homes spent during the 10 months under that disputed policy. While the public health department regulates staffing standards, the social services agency oversees nursing home financing.

“What are the costs that the nursing homes are asking for?” Sen. Cathy Osten, D-Sprague, the other co-chair of the Appropriations Committee, asked Reeves when she appeared before the panel for the first time this week, on Monday.

“At this point, the estimate is about $55 million,” Reeves replied. She also couldn’t say for certain then whether the federal government would still cover half of the costs tied to this disputed rule.

But Reeves’ department now says the $55 million estimate only represents the annual costs homes would have faced in the future if the rule had remained in effect.

The department also says now it’s confident federal Medicaid will cover roughly half of whatever staffing bill the state and nursing homes ultimately resolve.

Nursing homes say problem is more widespread

But that’s where things get more complicated.

Between March 31 and April 21 of last year, more than 70 nursing homes asked the state for a total of $22.7 million to meet enhanced staffing costs. The Department of Social Services instead distributed a total of $1 million to those homes, reduced proportionally based on their requests. Those homes will be audited next fiscal year to assess their financial situations.

The department wrote in a statement released late Wednesday that “the industry’s total requests of $22.7 million is likely overstated as the majority of the industry was already” providing three hours of daily staff care per patient, “and thus, such requests would not have sustained audit.”

But Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, responded late Wednesday that “this point of view represents a fundamental misunderstanding” of how Juthani’s now-withdrawn policy conflicted with legislative intent.

Barrett not only agrees that most homes were meeting the daily, 3-hour-per-patient care standard before it was adopted but noted that many legislators realized this as well back in 2021. The increase from 1.9 to 3 hours was popular because many homes already met that standard and wouldn’t need much added funding.

But, Barrett added, approximately 75% of nursing homes were below the standard set in Juthani’s policy. There are roughly 200 homes statewide and more than 160 in Barrett’s association.

“This is where the unfunded mandate comes from,” he said. “On this basic fact, we disagree with the agency analysis.”

The association filed a lawsuit in early October 2023 against the Department of Public Health. It charged the $1 million in aid provided by the Department of Social Services was far from adequate given the $22.7 million in requests filed. “Put another way,” the association wrote in its October filing, “95.6% of the requested amount was not provided.” 

Shortly after the lawsuit was filed, the Department of Social Services again invited homes facing enhanced staffing costs to apply for aid, and Reeves said Wednesday that nursing homes still can seek assistance.

The association had written in its October filing that it believes more than 100 homes would need additional resources.

But when asked Wednesday how many homes have sought assistance since the initial 72 requests were filed, the social services department didn’t provide a number.

“A small number of nursing homes implemented the policies and procedures that were initially released by DPH and have approached the Department [of Social Services] for rate consideration,” it wrote, adding “the final amounts are not yet known but the anticipated costs are expected to be low.”

Barrett declined further comment Wednesday citing the pending litigation.