So many Medicaid patients at Leeway nursing home in New Haven fail to pay their bills that the facility has a hard time operating, executive director Martha Dale told legislators Tuesday.

She wants to be able to evict them after 60 days.

"We don't have money to spare," she said. "They have income but somehow they are allowed to not pay us and still live there."

Medicaid regulations require patients who have income to pay a portion of their nursing home bills. Under state law, however, residents on Medicaid can't be discharged from a nursing home for non-payment.

A bill before the Select Committee on Aging would change that, but legislators and elderly advocates worry the measure would result in elderly patients being evicted with nowhere to go.

"This is a tough one I tell you. On one side you have these facilities not getting paid fairly. But my question is, where will these people go," said Sen. Edith G. Prague, D-Columbia, co-chairman of the committee.

Maybe eviction is not the solution, but a change needs to be made to give nursing homes more options, said Russell Schwartz, spokesman for the Connecticut Association of Health Care Facilities. His organization represents about half of the state's 241 nursing homes.

"There is no incentive to get people to pay. Look, they signed a deal and agreed to pay for a certain share of the costs," said Schwartz during an interview, who is also the director of Avon Health Center and West Hartford Health & Rehabilitation Center. "It is becoming more and more common for us not to get paid. And there is nothing we can do."

About 98 percent of nursing home residents in Connecticut are on Medicaid, but Schwartz said Medicaid only pays for about 60 percent of the actual bill.

"We need some means to cut the bleeding," he said.

Committee members said it's unlikely they will support the eviction proposal, but they said they will consider alternatives to help nursing homes avoid bankruptcy.

Department of Social Services Spokesman David Dearborn said the department has seen a spike in nursing home bankruptcies since the recession began. In 2006 no nursing home was in bankruptcy, compared with 20 in 2008 and seven so far this year.

Sen. John A. Kissel of Enfield, ranking Republican on the committee, suggested the state could allow nursing homes to garnish a portion of a non-paying resident's income or make it easier for them to go after assets in probate court.

"I would have no problem giving nursing homes added remedies to recover their costs," said Kissel.

Connecticut Legal Services director of elder law Kevin Brophy and the DSS long term care ombudsman Nancy Shaffer do not support changing the existing law because it has the potential to put the elderly at-risk.

"We don't know the ramifications. ... The resident may not even be aware that the applied income is being withheld," Shaffer testified, adding residents are oftentimes not involved in managing their finances. "Aren't there other remedies besides discharge to collect applied income?"

Nursing homes are to blame as well, Shaffer said during an interview.

"Good business practices can begin with their administrative offices. Talk to these residents and work out a way to get paid. This is taking a huge step and computes to me as a threat," she said.