A disagreement between Connecticut’s chief public health official and the nursing home industry will cost the state tens of millions of dollars, legislators learned last week.
The state owes nursing facilities $55 million for staffing requirements it imposed between March 2023 and this past January, Department of Social Services Commissioner Andrea Barton Reeves reported last week to the legislature’s Appropriations Committee, adding it’s uncertain whether Connecticut will be able to recoup even half of that cost through federal Medicaid reimbursements.
But the conflict doesn’t stem from Reeves’ department. Though the DSS largely oversees financial matters tied to nursing homes, the dispute centers on how the Department of Public Health, led by Commissioner Manisha Juthani, interpreted a 2021 law boosting minimum care-related staffing standards.
For about 10 months, Juthani required homes not only to provide a minimum of 3 staff hours per patient of daily care, as lawmakers mandated, but also stipulated how much of that time had to come from nurses and how much from lower-paid nursing aides. And it was done, despite warnings from industry officials and others, that legislators never intended to manage which staff would fulfill the 3-hour-per-day mandate.
Still, the temporary directive pushed nursing home staffing costs, which Connecticut is obligated to help cover, way beyond the $1 million price tag legislators anticipated.
And while Juthani dropped that directive in early January, legislators are now asking why other agencies within the Lamont administration — ones that do monitor nursing home finances — didn’t flag the problem months ago.
“You now have the responsibility to pay that cost to the nursing homes?” Sen. Cathy Osten, D-Sprague, asked Reeves last Wednesday, referring to the $55 million expense homes incurred.
“We do, yes,” said Reeves.
Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, also said last week that the state must reimburse homes for these costs because that responsibility is spelled out in Connecticut’s existing Medicaid plan with the federal government.
Osten asked whether, given the state-imposed costs on nursing homes beyond what legislators authorized, federal Medicaid will still reimburse about half the costs, as it normally does.
Reeves added she would explore filing with the U.S. Centers for Medicare and Medicaid Services for funding, but “we would not know that [relief is certain] until they’ve actually given us an answer one way or the other.”
In other words, even if federal aid is forthcoming, the state is obligated to pay at least about $27.5 million that neither legislators nor most of the Lamont administration was anticipating.
Staffing dispute goes back to late 2022
The General Assembly enacted a law in May 2021 raising the minimum hours of daily direct care per resident from 1.9 to 3 starting in January 2022. They originally focused on 4.1 hours per day but settled for 3 because of the price tag.
The nonpartisan Office of Fiscal Analysis projected rising to 4.1 hours would cost at least $200 million. But because most facilities already met the 3-hour standard, the price would be modest, ranging from $600,000 to $1 million.
Connecticut would cover the added expense for nursing homes and get Washington to cover roughly half the cost. This would be done by applying for an amendment to the existing federal-state Medicaid plan.
But things began to unravel 14 months ago, late in the first year after the new standards took effect. At issue was how much control the state has over the type of employees delivering the minimum daily care.
Did legislators intend to specify how much of the new care had to be provided by a registered nurse rather than by a nursing aide?
The Department of Public Health, which oversees nursing home staffing and quality of care, was charged with developing regulations to implement the new law. The first step was to establish interim procedures to guide homes until formal regulations were drafted and then to submit them to the legislature’s Regulations Review Committee.
And by November 2022, a draft policy from Juthani’s department broke down the 3-hour-per-patient standard, setting minimum time requirements for each level of staff. Nursing homes would have to provide at least 0.84 hours of care from registered nurses per resident per day and at least 2.16 hours of care by aides.
DPH also announced this policy would take effect on March 1, 2023.
“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.
The Connecticut Mirror has reported extensively on gaps in the state’s elder care system — both in nursing homes and home care — and highlighted worsening conditions in many nursing facilities. Serious violations known as immediate jeopardy orders were on the rise in 2023. A major nursing home chain faced a number of lawsuits, and the chief executive officer of that company acknowledged he was six months behind in paying health claims for employees.
Nursing home officials say legislators never intended to set new care standards for all levels of staff. The Connecticut Association of Health Care Facilities, an organization representing 165 Connecticut nursing homes, sued the public health department in October 2023.
Some legislators, including Osten and the other co-chairwoman of the Appropriations Committee, Rep. Toni E. Walker, D-New Haven, also said Juthani’s policies didn’t reflect legislative intent.
Though Juthani said her goal was to ensure adequate care by nursing aides, some legislators and industry officials said the minimum care standards she set clearly would have cost far more than the $1 million expense nonpartisan analysts had projected.
By late November of 2023, about one month after the lawsuit was filed, nonpartisan analysts provided — at legislators’ request — an updated projection based on Juthani’s proposed regulations and interpretation of the new law. The estimate was more than $40 million.
By Jan. 5 of this year, Juthani had notified nursing homes she no longer would be pursuing the enhanced staffing standards.
Legislators say poor communication cost CT tens of millions
Meanwhile, legislators already had begun to question what the other agencies in the Lamont administration were thinking. The Department of Social Services generally administers payments to nursing homes. The Office of Policy and Management is the Executive Branch’s chief fiscal agency.
Osten asked Juthani at a March 2023 hearing if her department was working in a vacuum or if it was consulting with the rest of the Lamont administration.
The commissioner responded that she was in conversation “with everybody in the industry” but said her responsibility was to boost care for patients in accordance with the new law. “Our focus is quality of care,” she added. “That’s all.”
“I was really kind of shocked that she said that,” Osten told the CT Mirror last week. “They can’t act in a silo.”
But other legislators also said recently that the Lamont administration needs to enhance collaboration.
The unanticipated nursing home expense of $27.5 million to $55 million is manageable in a state budget currently projected to close almost $647 million in the black. But they say one agency cannot advance regulations that cost 40 or 50 times more than the legislature anticipates while other Executive Branch agencies that might also have a problem aren’t commenting.
“When each one of the agencies comes up with a policy that they feel is important, is it communicated to all of the other agencies that are going to be directly affected?” Walker asked Reeves.
“Sometimes it is, and sometimes we do have challenges in making sure that communication happens,” Reeves said. “It’s never deliberate.”
“Executive Branch agencies work closely to determine potential costs and build a common understanding of the fiscal impact of regulations or policies and procedures before they are put in place,” OPM spokesman Chris Collibee told the CT Mirror last week. “At times, this can be an ongoing process, which necessitates course corrections to avoid substantial fiscal impacts.”
Collibee added that “all agencies will continue to collaborate closely in the development of regulations and policies and procedures that have inter-agency impact.”
But some other legislators say this expensive mix-up, which should cost the state at least about $27.5 million, has forced them to change their process.
The leaders of the Regulation Review Committee changed their own methods when it comes to evaluating future policy proposals from state agencies.
“We need to be thinking what’s going on overall for the budget,” said Rep. Lucy Dathan, D-New Canaan. “We do need to be thinking about the bigger picture.”
“A fiscal analysis should take into the account the totality of the impact,” said Sen. John Kissel, R-Enfield, adding all state agencies should be prepared for a more comprehensive review. “Lucy and I feel very comfortable that’s loud and clear.”