AN ACT CONCERNING THE DEPARTMENT OF SOCIAL SERVICES' RECOMMENDATIONS REGARDING EXCEPTIONS TO THE NURSING HOME BED MORATORIUM, NURSING HOME RESIDENT DATA AND NURSING HOME REIMBURSEMENT RATE CAPS FOR RELATED PARTY EMPLOYEES.

Senate
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General Assembly File No. 124
February Session, 2026 Substitute Senate Bill No. 288

Senate, March 23, 2026

The Committee on Aging reported through SEN. HOCHADEL
of the 13th Dist., Chairperson of the Committee on the part of
the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING THE DEPARTMENT OF SOCIAL SERVICES'
RECOMMENDATIONS REGARDING EXCEPTIONS TO THE NURSING
HOME BED MORATORIUM, NURSING HOME RESIDENT DATA AND
NURSING HOME REIMBURSEMENT RATE CAPS FOR RELATED
PARTY EMPLOYEES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Subsection (a) of section 17b-354 of the 2026 supplement to 1
the general statutes is repealed and the following is substituted in lieu 2
thereof (Effective from passage): 3
(a) The Department of Social Services shall not accept or approve any 4
requests for additional nursing home beds, except (1) beds restricted to 5
use by patients with acquired immune deficiency syndrome or by 6
patients requiring neurological rehabilitation; (2) beds associated with a 7
continuing care facility, as described in section 17b -520, provided such 8
beds are not used in the Medicaid program ; [. For the purpose of this 9
subsection, beds associated with a continuing care facility are not subject 10
to the certificate of need provisions pursuant to sections 17b -352 and 11
17b-353;] (3) Medicaid certified beds either to be relocated from one 12
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licensed nursing facility to another licensed nursing facility to meet a 13
priority need identified in the strategic plan developed pursuant to 14
subsection (c) of section 17b -369 or new beds added to an existing 15
facility or a new facility with preference given to a nontraditional, small-16
house-style nursing home facility that incorporates the goals for nursing 17
facilities referenced in the department's strategic plan for long -term 18
care, as described in section 17b-355, as amended by this act, to address 19
priority needs reflected by area census trends ; (4) licensed Medicaid 20
nursing facility beds to be relocated from one or more existing nursing 21
facilities to a new nursing facility, including a replacement facility, 22
provided (A) no new Medicaid certified beds are added, (B) at least one 23
currently licensed facility is closed in the transaction as a result of the 24
relocation, (C) the relocation is done within available appropriations, 25
(D) the facility participates in the Money Follows the Person 26
demonstration project pursuant to section 17b-369, (E) the availability of 27
beds in the area of need will not be adversely affected, (F) the certificate 28
of need approval for such new facility or facility relocation and the 29
associated capital expenditures are obtained pursuant to sections 17b -30
352 and 17b-353, and (G) the facilities included in the bed relocation and 31
closure shall be in accordance with the strategic plan developed 32
pursuant to subsection (c) of section 17b-369; and (5) proposals to build 33
a nontraditional, small-house style nursing home designed to enhance 34
the quality of life for nursing facility residents, provided that the 35
nursing facility agrees to reduce its total number of licensed beds by a 36
percentage determined by the Commissioner of Social Services in 37
accordance with the department's strategic plan for long-term care. For 38
the purposes of this subsection, beds associated with a continuing care 39
facility are not subject to the certificate of need provisions pursuant to 40
sections 17b-352 and 17b-353. 41
Sec. 2. Section 17b -355 of the general statutes is repealed and the 42
following is substituted in lieu thereof (Effective from passage): 43
(a) In determining whether a request submitted pursuant to sections 44
17b-352 to 17b -354, inclusive, as amended by this act , will be granted, 45
modified or denied, the Commissioner of Social Services shall consider 46
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the following: (1) The financial feasibility of the request and its impact 47
on the applicant's rates and financial condition, (2) the contribution of 48
the request to the quality, accessibility and cost -effectiveness of the 49
delivery of long-term care in the region, including consideration of the 50
nursing home's star rating on the five -star quality rating system for 51
nursing homes published by the Centers for Medicare and Medicaid 52
Services, (3) whether there is clear public need for the request, (4) the 53
relationship of any proposed change to the applicant's current 54
utilization statistics and the effect of the proposal on the utilization 55
statistics of other facilities in the applicant's service area, (5) the business 56
interests of all owners, partners, associates, incorporators, directors, 57
sponsors, stockholders and operators and the personal background of 58
such persons, and (6) any other factor which the Department of Social 59
Services deems relevant. In considering whether there is clear public 60
need for any request for the relocation of beds to a replacement facility, 61
or for new beds added to an existing facility or a new facility, the 62
commissioner shall consider whether there is a demonstrated bed need 63
in the towns within a fifteen -mile radius of the town in which the beds 64
are proposed to be located and whether the availability of beds in the 65
applicant's service area will be adversely affected. 66
(b) Any proposal to relocate nursing home beds from an existing 67
facility to a new facility shall not increase the number of Medicaid 68
certified beds and shall result in the closure of at least one currently 69
licensed facility. The commissioner may request that any applicant 70
seeking to replace an existing facility reduce the number of beds in the 71
new facility by a percentage that is consistent with the department's 72
strategic state-wide long-term rebalancing plan for long-term care. If an 73
applicant seeking to replace an existing facility with a new facility owns 74
or operates more than one nursing facility, the commissioner may 75
request that the applicant close two or more facilities before approving 76
the proposal to build a new facility. The commissioner shall also 77
consider whether an application to establish a new or replacement 78
nursing facility proposes a nontraditional, small -house style nursing 79
facility and incorporates goals for nursing facilities referenced in the 80
department's strategic state-wide long-term rebalancing plan for long -81
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term care, including, but not limited to, (1) promoting person -centered 82
care, (2) providing enhanced quality of care, (3) creating community 83
space for all nursing facility residents, and (4) developing stronger 84
connections between the nursing facility residents and the surrounding 85
community. [Bed] 86
(c) Demonstrated bed need shall be based on the recent occupancy 87
percentage of area nursing facilities [and the ] with occupancy above 88
ninety-six per cent for a minimum of two consecutive quarters. The 89
department may consider projected bed need [for no more than five 90
years] into the future at [ninety-seven and one-half per cent] occupancy 91
above ninety-six per cent using the latest [official population projections 92
by town and age as published by the Office of Policy and Management 93
and the latest available state -wide nursing facility utilization statistics 94
by age cohort from the Department of Public Health ] strategic state -95
wide long-term rebalancing plan for long-term care as published by the 96
department. The commissioner may also consider area specific 97
utilization and reductions in utilization rates to account for the 98
increased use of less institutional alternatives. 99
Sec. 3. Section 17b-99a of the 2026 supplement to the general statutes 100
is repealed and the following is substituted in lieu thereof (Effective July 101
1, 2026): 102
(a) (1) For purposes of this section, (A) "extrapolation" means the 103
determination of an unknown value by projecting the results of the 104
review of a sample to the universe from which the sample was drawn, 105
(B) "facility" means any facility described in this subsection and for 106
which rates are established pursuant to section 17b-340, as amended by 107
this act, (C) "minimum data set" means the federal resident assessment 108
tool required by the Centers for Medicare and Medicaid Services , and 109
[(C)] (D) "universe" means a defined population of claims submitted by 110
a facility during a specific time period. 111
(2) The Commissioner of Social Services shall conduct any audit of a 112
licensed chronic and convalescent nursing home, chronic disease 113
hospital associated with a chronic and convalescent nursing home, a rest 114
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home with nursing supervision, a licensed residential care home, as 115
defined in section 19a -490, and a residential facility for persons with 116
intellectual disability which is licensed pursuant to section 17a -227 and 117
certified to participate in the Medicaid program as an intermediate care 118
facility for individuals with intellectual disabilities in accordance with 119
the provisions of this section. 120
(b) Not less than thirty days prior to the commencement of any such 121
audit, the commissioner shall provide written notification of the audit 122
to such facility, unless the commissioner makes a good -faith 123
determination that (1) the health or safety of a recipient of services is at 124
risk; or (2) the facility is engaging in vendor fraud under sections 53a -125
290 to 53a-296, inclusive. 126
(c) Any clerical error, including, but not limited to, recordkeeping, 127
typographical, scrivener's or computer error, discovered in a record or 128
document produced for any such audit, shall not of itself constitute a 129
wilful violation of the rules of a medical assistance program 130
administered by the Department of Social Services unless proof of intent 131
to commit fraud or otherwise violate program rules is established. In 132
determining which facilities shall be subject to audits, the Commissioner 133
of Social Services may give consideration to the history of a facility's 134
compliance in addition to other criteria used to select a facility for an 135
audit. 136
(d) A finding of overpayment or underpayment to such facility shall 137
not be based on extrapolation unless (1) there is a determination of 138
sustained or high level of payment error involving the facility, (2) 139
documented educational intervention has failed to correct the level of 140
payment error, or (3) the value of the claims in aggregate exceeds two 141
hundred thousand dollars on an annual basis. 142
(e) A facility, in complying with the requirements of any such audit, 143
shall be allowed not less than thirty days to provide documentation in 144
connection with any discrepancy discovered and brought to the 145
attention of such facility in the course of any such audit. 146
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(f) The commissioner shall produce a preliminary written report 147
concerning any audit conducted pursuant to this section and such 148
preliminary report shall be provided to the facility that was the subject 149
of the audit not later than sixty days after the conclusion of such audit. 150
(g) The commissioner shall, following the issuance of the preliminary 151
report pursuant to subsection (f) of this section, hold an exit conference 152
with any facility that was the subject of any audit pursuant to this 153
subsection for the purpose of discussing the preliminary report. Such 154
facility may present evidence at such exit conference refuting findings 155
in the preliminary report. 156
(h) The commissioner shall produce a final written report concerning 157
any audit conducted pursuant to this subsection. Such final written 158
report shall be provided to the facility that was the subject of the audit 159
not later than sixty days after the date of the exit conference conducted 160
pursuant to subsection (g) of this section, unless the commissioner and 161
the facility agree to a later date or there are other referrals or 162
investigations pending concerning the facility. 163
(i) Any facility aggrieved by a final report issued pursuant to 164
subsection (h) of this section may request a rehearing. A rehearing shall 165
be held by the commissioner or the commissioner's designee, provided 166
a detailed written description of all items of aggrievement in the final 167
report is filed by the facility not later than ninety days following the date 168
of written notice of the commissioner's decision. The rehearing shall be 169
held not later than thirty days following the date of filing of the detailed 170
written description of each specific item of aggrievement. The 171
commissioner shall issue a final decision not later than sixty days 172
following the close of evidence or the date on which final briefs are filed, 173
whichever occurs later. Any items not resolved at such rehearing to the 174
satisfaction of the facility or the commissioner shall be submitted to 175
binding arbitration by an arbitration board consisting of one member 176
appointed by the facility, one member appointed by the commissioner 177
and one member appointed by the Chief Court Administrator from 178
among the retired judges of the Superior Court, which retired judge 179
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shall be compensated for his services on such board in the same manner 180
as a state referee is compensated for his services under section 52 -434. 181
The proceedings of the arbitration board and any decisions rendered by 182
such board shall be conducted in accordance with the provisions of the 183
Social Security Act, 42 USC 1396, as amended from time to time, and 184
chapter 54. 185
(j) The commissioner shall conduct audits of minimum data set 186
information used in the calculation of Medicaid acuity -based per diem 187
rates paid to licensed nursing homes. The commissioner shall conduct 188
an audit of minimum data set information in accordance with the 189
provisions of this section, except a nursing home shall provide all 190
documentation requested by the commissioner pursuant to the 191
minimum data set audit not later than ten days after the date on which 192
the commissioner requests such documentation. The commissioner 193
shall not accept any documentation submitted by a nursing home after 194
the completion of the exit conference portion of the audit unless the 195
commissioner and the nursing home agree to such submission of 196
documentation. 197
[(j)] (k) The submission of any false or misleading [fiscal] information 198
or data to the commissioner shall be grounds for suspension of 199
payments by the state under sections 17b-239 to 17b-246, inclusive, and 200
sections 17b -340, as amended by this act, and 17b -343, in accordance 201
with regulations adopted by the commissioner. In addition, any person, 202
including any corporation, who knowingly makes or causes to be made 203
any false or misleading statement or who knowingly submits false or 204
misleading fiscal information or data on the forms approved by the 205
commissioner shall be guilty of a class D felony. 206
[(k)] (l) The commissioner, or any agent authorized by the 207
commissioner to conduct any inquiry, investigation or hearing under 208
the provisions of this section, shall have power to administer oaths and 209
take testimony under oath relative to the matter of inquiry or 210
investigation. At any hearing ordered by the commissioner, the 211
commissioner or such agent having authority by law to issue such 212
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process may subpoena witnesses and require the production of records, 213
papers and documents pertinent to such inquiry. If any person disobeys 214
such process or, having appeared in obedience thereto, refuses to 215
answer any pertinent question put to the person by the commissioner or 216
the commissioner's authorized agent or to produce any records and 217
papers pursuant thereto, the commissioner or the commissioner's agent 218
may apply to the superior court for the judicial district of Hartford or 219
for the judicial district wherein the person resides or wherein the 220
business has been conducted, or to any judge of such court if the same 221
is not in session, setting forth such disobedience to process or refusal to 222
answer, and such court or judge shall cite such person to appear before 223
such court or judge to answer such question or to produce such records 224
and papers. 225
[(l)] (m) The commissioner shall provide free training to facilities on 226
the preparation of cost reports to avoid clerical errors and shall post 227
information on the department's Internet web site concerning the 228
auditing process and methods to avoid clerical errors. Not later than 229
April 1, 2015, the commissioner shall establish audit protocols to assist 230
facilities subject to audit pursuant to this section in developing 231
programs to improve compliance with Medicaid requirements under 232
state and federal laws and regulations, provided audit protocols may 233
not be relied upon to create a substantive or procedural right or benefit 234
enforceable at law or in equity by any person, including a corporation. 235
The commissioner shall establish and publish on the department's 236
Internet web site audit protocols for: (1) Licensed chronic and 237
convalescent nursing homes, (2) chronic disease hospitals associated 238
with chronic and convalescent nursing homes, (3) rest homes with 239
nursing supervision, (4) licensed residential care homes, as defined in 240
section 19a-490, and (5) residential facilities for persons with intellectual 241
disability that are licensed pursuant to section 17a -227 and certified to 242
participate in the Medicaid program as intermediate care facilities for 243
individuals with intellectual disabilities. The commissioner shall ensure 244
that the Department of Social Services, or any entity with which the 245
commissioner contracts to conduct an audit pursuant to this section, has 246
on staff or consults with, as needed, licensed health professionals with 247
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experience in treatment, billing and coding procedures used by the 248
facilities being audited pursuant to this section. 249
Sec. 4. Subsection (a) of section 17b-340 of the 2026 supplement to the 250
general statutes is repealed and the following is substituted in lieu 251
thereof (Effective July 1, 2026): 252
(a) For purposes of this subsection, (1) a "related party" includes, but 253
is not limited to, any company related to a chronic and convalescent 254
nursing home through family association, common ownership, control 255
or business association with any of the owners, operators or officials of 256
such nursing home; (2) "company" means any person, partnership, 257
association, holding company, limited liability company or corporation; 258
(3) "family association" means a relationship by birth, marriage or 259
domestic partnership; and (4) "profit and loss statement" means the 260
most recent annual statement on profits and losses finalized by a related 261
party before the annual report mandated under this subsection. The 262
rates to be paid by or for persons aided or cared for by the state or any 263
town in this state to licensed chronic and convalescent nursing homes, 264
to chronic disease hospitals associated with chronic and convalescent 265
nursing homes, to rest homes with nursing supervision, to licensed 266
residential care homes, as defined by section 19a-490, and to residential 267
facilities for persons with intellectual disability that are licensed 268
pursuant to section 17a -227 and certified to participate in the Title XIX 269
Medicaid program as intermediate care facilities for individuals with 270
intellectual disabilities , for room, board and services specified in 271
licensing regulations issued by the licensing agency shall be determined 272
annually, except as otherwise provided in this subsection by the 273
Commissioner of Social Services, to be effective July first of each year 274
except as otherwise provided in this subsection. Such rates shall be 275
determined on a basis of a reasonable payment for such necessary 276
services, which basis shall take into account as a factor the costs of such 277
services. Cost of such services shall include reasonable costs mandated 278
by collective bargaining agreements with certified collective bargaining 279
agents or other agreements between the employer and employees, 280
provided "employees" shall not include persons who are a related party 281
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or employed as managers or chief administrators or required to be 282
licensed as nursing home administrators, and compensation for services 283
rendered by proprietors at prevailing wage rates, as determined by 284
application of principles of accounting as prescribed by said 285
commissioner. Cost of such services shall not include amounts paid by 286
the facilities to employees as salary, or to attorneys or consultants as 287
fees, where the responsibility of the employees, attorneys, or consultants 288
is to persuade or seek to persuade the other employees of the facility to 289
support or oppose unionization. Nothing in this subsection shall 290
prohibit inclusion of amounts paid for legal counsel related to the 291
negotiation of collective bargaining agreements, the settlement of 292
grievances or normal administration of labor relations. The 293
commissioner may, in the commissioner's discretion, allow the inclusion 294
of extraordinary and unanticipated costs of providing services that were 295
incurred to avoid an immediate negative impact on the health and safety 296
of patients. The commissioner may, in the commissioner's discretion, 297
based upon review of a facility's costs, direct care staff to patient ratio 298
and any other related information, revise a facility's rate for any 299
increases or decreases to total licensed capacity of more than ten beds or 300
changes to its number of licensed rest home with nursing supervision 301
beds and chronic and convalescent nursing home beds. The 302
commissioner may, in the commissioner's discretion, revise the rate of a 303
facility that is closing. An interim rate issued for the period during 304
which a facility is closing shall be based on a review of facility costs, the 305
expected duration of the close -down period, the anticipated impact on 306
Medicaid costs, available appropriations and the relationship of the rate 307
requested by the facility to the average Medicaid rate for a close -down 308
period. The commissioner may so revise a facility's rate established for 309
the fiscal year ending June 30, 1993, and thereafter for any bed increases, 310
decreases or changes in licensure effective after October 1, 1989. 311
Effective July 1, 1991, in facilities that have both a chronic and 312
convalescent nursing home and a rest home with nursing supervision, 313
the rate for the rest home with nursing supervision shall not exceed such 314
facility's rate for its chronic and convalescent nursing home. All such 315
facilities for which rates are determined under this subsection shall 316
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report on a fiscal year basis ending on September thirtieth. Such report 317
shall be submitted to the commissioner by February fifteenth . Each 318
chronic and convalescent nursing home that receives state funding 319
pursuant to this section shall include in such annual report a profit and 320
loss statement from each related party that receives from such chronic 321
and convalescent nursing home thirty thousand dollars or more per 322
year for goods, fees and services. No cause of action or liability shall 323
arise against the state, the Department of Social Services, any state 324
official or agent for failure to take action based on the information 325
required to be reported under this subsection. The commissioner may 326
reduce the rate in effect for a facility that fails to submit a complete and 327
accurate report on or before February fifteenth by an amount not to 328
exceed ten per cent of such rate. If a licensed residential care home fails 329
to submit a complete and accurate report, the department shall notify 330
such home of the failure and the home shall have thirty days from the 331
date the notice was issued to submit a complete and accurate report. If 332
a licensed residential care home fails to submit a complete and accurate 333
report not later than thirty days after the date of notice, such home may 334
not receive a retroactive rate increase, in the commissioner's discretion. 335
The commissioner shall, annually, on or before April first , report the 336
data contained in the reports of such facilities on the department's 337
Internet web site . For the cost reporting year commencing October 1, 338
1985, and for subsequent cost reporting years, facilities shall report the 339
cost of using the services of any nursing personnel supplied by a 340
temporary nursing services agency by separating said cost into two 341
categories, the portion of the cost equal to the salary of the employee for 342
whom the nursing personnel supplied by a temporary nursing services 343
agency is substituting shall be considered a nursing cost and any cost in 344
excess of such salary shall be further divided so that seventy -five per 345
cent of the excess cost shall be considered an administrative or general 346
cost and twenty -five per cent of the excess cost shall be considered a 347
nursing cost, provided if the total costs of a facility for nursing personnel 348
supplied by a temporary nursing services agency in any cost year are 349
equal to or exceed fifteen per cent of the total nursing expenditures of 350
the facility for such cost year, no portion of such costs in excess of fifteen 351
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per cent shall be classified as administrative or general costs. The 352
commissioner, in determining such rates, shall also take into account the 353
classification of patients or boarders according to special care 354
requirements or classification of the facility according to such factors as 355
facilities and services and such other factors as the commissioner deems 356
reasonable, including anticipated fluctuations in the cost of providing 357
such services. The commissioner may establish a separate rate for a 358
facility or a portion of a facility for traumatic brain injury patients who 359
require extensive care but not acute general hospital care. Such separate 360
rate shall reflect the special care requirements of such patients. If 361
changes in federal or state laws, regulations or standards adopted 362
subsequent to June 30, 1985, result in increased costs or expenditures in 363
an amount exceeding one-half of one per cent of allowable costs for the 364
most recent cost reporting year, the commissioner shall adjust rates and 365
provide payment for any such increased reasonable costs or 366
expenditures within a reasonable period of time retroactive to the date 367
of enforcement. Nothing in this section shall be construed to require the 368
Department of Social Services to adjust rates and provide payment for 369
any increases in costs resulting from an inspection of a facility by the 370
Department of Public Health. Such assistance as the commissioner 371
requires from other state agencies or departments in determining rates 372
shall be made available to the commissioner at the commissioner's 373
request. Payment of the rates established pursuant to this section shall 374
be conditioned on the establishment by such facilities of admissions 375
procedures that conform with this section, section 19a-533 and all other 376
applicable provisions of the law and the provision of equality of 377
treatment to all persons in such facilities. The established rates shall be 378
the maximum amount chargeable by such facilities for care of such 379
beneficiaries, and the acceptance by or on behalf of any such facility of 380
any additional compensation for care of any such beneficiary from any 381
other person or source shall constitute the offense of aiding a beneficiary 382
to obtain aid to which the beneficiary is not entitled and shall be 383
punishable in the same manner as is provided in subsection (b) of 384
section 17b -97. Notwithstanding any provision of this section, the 385
Commissioner of Social Services may, within available appropriations, 386
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provide an interim rate increase for a licensed chronic and convalescent 387
nursing home or a rest home with nursing supervision for rate periods 388
no earlier than April 1, 2004, only if the commissioner determines that 389
the increase is necessary to avoid the filing of a petition for relief under 390
Title 11 of the United States Code; imposition of receivership pursuant 391
to sections 19a-542 and 19a -543; or substantial deterioration of the 392
facility's financial condition that may be expected to adversely affect 393
resident care and the continued operation of the facility, and the 394
commissioner determines that the continued operation of the facility is 395
in the best interest of the state. The commissioner shall consider any 396
requests for interim rate increases on file with the department from 397
March 30, 2004, and those submitted subsequently for rate periods no 398
earlier than April 1, 2004. When reviewing an interim rate increase 399
request the commissioner shall, at a minimum, consider: (A) Existing 400
chronic and convalescent nursing home or rest home with nursing 401
supervision utilization in the area and projected bed need; (B) physical 402
plant long-term viability and the ability of the owner or purchaser to 403
implement any necessary property improvements; (C) licensure and 404
certification compliance history; (D) reasonableness of actual and 405
projected expenses; and (E) the ability of the facility to meet wage and 406
benefit costs. No interim rate shall be increased pursuant to this 407
subsection in excess of one hundred fifteen per cent of the median rate 408
for the facility's peer grouping, established pursuant to subdivision (3) 409
of subsection (a) of section 17b -340d, unless recommended by the 410
commissioner and approved by the Secretary of the Office of Policy and 411
Management after consultation with the commissioner. Such median 412
rates shall be published by the Department of Social Services not later 413
than April first of each year. In the event that a facility granted an 414
interim rate increase pursuant to this section is sold or otherwise 415
conveyed for value to an unrelated entity less than five years after the 416
effective date of such rate increase, the rate increase shall be deemed 417
rescinded and the department shall recover an amount equal to the 418
difference between payments made for all affected rate periods and 419
payments that would have been made if the interim rate increase was 420
not granted. The commissioner may seek recovery of such payments 421
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from any facility with common ownership. With the approval of the 422
Secretary of the Office of Policy and Management, the commissioner 423
may waive recovery and rescission of the interim rate for good cause 424
shown that is not inconsistent with this section, including, but not 425
limited to, transfers to family members that were made for no value. The 426
commissioner shall provide written quarterly reports to the joint 427
standing committees of the General Assembly having cognizance of 428
matters relating to aging, human services and appropriations and the 429
budgets of state agencies, that identify each facility requesting an 430
interim rate increase, the amount of the requested rate increase for each 431
facility, the action taken by the commissioner and the secretary pursuant 432
to this subsection, and estimates of the additional cost to the state for 433
each approved interim rate increase. Nothing in this subsection shall 434
prohibit the commissioner from increasing the rate of a licensed chronic 435
and convalescent nursing home or a rest home with nursing supervision 436
for allowable costs associated with facility capital improvements or 437
increasing the rate in case of a sale of a licensed chronic and convalescent 438
nursing home or a rest home with nursing supervision if receivership 439
has been imposed on such home. For purposes of this section, 440
"temporary nursing services agency" and "nursing personnel" have the 441
same meaning as provided in section 19a-118. 442
This act shall take effect as follows and shall amend the following
sections:

Section 1 from passage 17b-354(a)
Sec. 2 from passage 17b-355
Sec. 3 July 1, 2026 17b-99a
Sec. 4 July 1, 2026 17b-340(a)

Statement of Legislative Commissioners:
In Section 1(a), "outlined in" was changed to "described in" for accuracy
and Section 3(j) was redrafted for clarity.

AGE Joint Favorable Subst. -LCO

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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Social Services, Dept. GF - Potential
Cost/ Savings
See Below See Below
Note: GF=General Fund

Municipal Impact: None
Explanation
Sections 1 and 2 of the bill could result in increased Medicaid costs
to the Department of Social Services (DSS) associated with allowing DSS
to approve requests to add new Medicaid -certified beds to existing or
new nursing homes. To the extent this results in a higher cost per bed
than Medicaid would otherwise support, or new costs related to a new
facility, the state will incur associated allowable Medicaid expenditures.
The actual fiscal impact is dependent on the scope and approval of such
requests.
Section 2 also adds to the list of items DSS must consider when
determining whether to approve or deny requests for additional
nursing home beds. To the extent considering the Center for Medicare
and Medicaid Services' (CMS) five -star quality rating system alters the
decision DSS would have otherwise made, the agency could experience
an impact, which cannot be determined at this time.
Section 3 modifies minimum data set requirements for audit
purposes. This could impact nursing home rates to the extent limiting
the timeframe in which minimum data set information must be
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submitted adjusts the calculation of Medicaid acuity -based per diem
rates paid to nursing homes.
Section 4 limits Medicaid reimbursement for union employees who
are related to an owner of a nursing home, which will reduce rates to
the extent such related parties costs would otherwise be factored into
Medicaid rates.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to related adjustments to Medicaid rates
for nursing homes.

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OLR Bill Analysis
SB 288

AN ACT CONCERNING THE DEPARTMENT OF SOCIAL SERVICES'
RECOMMENDATIONS REGARDING EXCEPTIONS TO THE
NURSING HOME BED MORATORIUM, NURSING HOME RESIDENT
DATA AND NURSING HOME REIMBURSEMENT RATE CAPS FOR
RELATED PARTY EMPLOYEES.

SUMMARY
This bill makes several unrelated changes to laws on nursing homes.
Primarily, it:
1. creates an exception to the state’s nursing home bed moratorium,
allowing the Department of Social Services ( DSS) to approve
additional Medicaid -certified beds in existing or new nursing
homes under certain circumstances;
2. modifies the factors the DSS commissioner must consider when
reviewing certificate of need (CON) applications;
3. establishes a separate process for DSS audits of licensed nursing
homes’ minimum data set information for acuity-based Medicaid
payments; and
4. caps the Medicaid reimbursement rate of pay for union
employees who are related to the owner of a nursing home.
The bill also makes minor, technical and conforming changes.
EFFECTIVE DATE: Upon passage , except the provisions on DSS
audits and Medicaid reimbursement for related -party pay are effective
July 1, 2026.
§ 1— NURSING HOME BED MORATORIUM EXCEPTION
Existing law establishes a nursing home bed moratorium that
generally prohibits DSS from accepting or approving CON requests for
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more nursing home beds, with certain exceptions (see
BACKGROUND).
The bill adds a new exception that allows DSS to approve a request
to add new Medicaid -certified beds to existing or new nursing homes.
When doing so, the department must give preference to nontraditional,
small-house style nursing homes whose goals are in keeping with the
department’s long-term care strategic plan to address facility needs in
priority census tracts.
§ 2 — CON CRITERIA
By law, nursing homes, rest homes, and intermediate care facilities
for people with intellectual disabilities must generally receive CON
approval from DSS when (1) introducing new services, (2) changing
ownership, (3) relocating licensed beds or decreasing bed capacity, (4)
terminating a service, or (5) incurring certain capital expenditures.
Under existing law and the bill, the DSS commissioner must consider
several factors when reviewing CON requests, such as whether there is
clear public need for the proposal. When determining public need for
requests to add new Medicaid -certified beds under the bill, the
commissioner must consider whether there is a demonstrated bed need
in the towns within a 15 -mile radius of the town where the new beds
will be added. (Existing law also requires the commissioner to do this
when considering requests to reloc ate beds to a replacement nursing
home.)
For all CON requests, existing law requires the commissioner to
consider how a request contributes to regional long -term care delivery
quality, accessibility, and cost -effectiveness. Under the bill, in making
this consideration, she must include the requesting nursing home’s star
rating on the Centers for Medicare and Medicaid Service’s (CMS) five-
star quality rating system for nursing homes.
The bill also modifies how bed need is determined for CON requests.
Under the bill, a service area with a demonstrated bed need is one whose
nursing home occupancy is above 96% for at least two consecutive
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quarters. The DSS commissioner may also consider the service area’s
projected future bed need above 96% occupancy using its latest strategic
statewide long -term care rebalancing plan. Currently, demonstrated
bed need is based on a service area’s nursing ho me occupancy (the law
does not specify a percentage) and projected bed need for up to five
years at 97.5% occupancy using the (1) Office of Policy and
Management’s latest population projections by town and age and (2)
Department of Public Health’s latest available nursing home utilization
statistics by age cohort.
§ 3 — NURSING HOME MINIMUM DATA SET AUDITS
Existing law sets procedures and requirements related to DSS audits
of long-term care facilities that receive Medicaid or other state payments
(for example, nursing homes, residential care homes, and intermediate
care facilities for people with intellectual disabilities).
The bill establishes a different process for DSS audits of nursing
homes’ minimum data set (MDS) information. Federal law requires
nursing homes to assess each resident’s functional capacity using the
MDS assessment tool and DSS then uses the information to calculate
nursing homes’ acuity -based Medicaid reimbursement rates.
(Generally, acuity-based rates refer to rates that vary based on, among
other things, the facility’s patient casemix.)
Deadline to Provide Information
Under the bill, if DSS requests documentation related to an MDS
audit, the nursing home must provide it within 10 days. For other types
of audits, existing law grants facilities at least 30 days to provide
documentation on any discrepancies found during the audit.
Limitation on Post-Exit Interview Submissions
Under existing law, unchanged by the bill, the commissioner must
prepare a preliminary report on an audit’s findings. She must then hold
an exit conference with the audited facility to discuss the preliminary
report, and the facility may present evidence refuting the report’s
findings. For MDS audits, the bill prohibits nursing homes from giving
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the commissioner any more documentation after the exit conference,
unless the commissioner and nursing home agree to it.
§ 4 — MEDICAID REIMBURSEMENT FOR RELATIVES’ WAGES
Under existing law, the DSS commissioner sets Medicaid
reimbursement rates for nursing homes , (as well as certain chronic
disease hospitals, residential care homes, and intermediate care facilities
for people with intellectual disabilities). These rates take into account
the costs of providing necessary services and include expenses required
under any collective bargaining agreement, such as union employee
compensation, or other agreements.
For union employees who are related to a nursing home’s owners,
operators, or officials, the bill limits how much of the employee’s
compensation is eligible for Medicaid reimbursement. The bill appears
to limit Medicaid reimbursement for these employees to the allowable
salary amount set in law for related parties.
Under existing law, unchanged by the bill, reimbursement for a non-
union related party’s salary is limited to amounts annually published in
a salary limitations schedule.
By law, “related parties” include any company related to a nursing
home’s owners, operators, or officials through common ownership,
control, business association, or family association (a relationship by
birth, marriage, or domestic partnership).
BACKGROUND
DSS CON Program
By law, nursing homes, rest homes, and intermediate care facilities
for people with intellectual disabilities must generally receive CON
approval from DSS when (1) introducing new services, (2) changing
ownership, (3) relocating licensed beds or decreasing bed capacity, (4)
terminating a service, or (5) incurring certain capital expenditures.
Exceptions to Nursing Home Bed Moratorium
For over 30 years, the state has placed a moratorium on new nursing
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home beds, except for those:
1. restricted to use by patients with AIDS or who require
neurological rehabilitation;
2. associated with a continuing care facility, if they are not used for
Medicaid patients;
3. that are Medicaid -certified and relocated from one licensed
nursing home to another or to a new facility, under certain
conditions; and
4. in certain nontraditional, small-house style nursing homes.
COMMITTEE ACTION
Aging Committee
Joint Favorable
Yea 14 Nay 0 (03/05/2026)