State officials are asking lawmakers to craft a bill that would allow the Department of Social Services to limit Medicaid payments for unionized nursing homes whose owners hire family members at inflated salaries.

Medicaid reimbursements would be capped at the average salary for the position occupied by the family member. So, if a nursing home owner hired a relative to be a certified nursing aide and that worker made twice the average salary, the reimbursement would be limited to the average salary for that position.

DSS officials said they already have rules in place that cap Medicaid payments for relatives at nonunion facilities — they want to expand the oversight to unionized staff.

“We already cap what Medicaid will pay when a nursing home employs a relative of the owner. This proposal simply extends that same principle to situations where that relative also happens to be a union member,” said Christine Stuart, a spokeswoman for the department. “The goal is straightforward: Medicaid should not pay more for a relative than it would for any other employee doing the same job under the same union contract.”

Relatives are defined as any person who is related to a nursing home owner through marriage or family. At least 51 of the state’s 180 nursing homes include unionized staff.

Nursing home administrators would still have final say over employee salaries; the proposal would only limit the amount of Medicaid reimbursement. It ensures DSS “is using state taxpayer dollars in the most efficient and appropriate manner,” department officials wrote in their recommendations to the legislature.

Sen. Jan Hochadel, a Meriden Democrat who is co-chair of the Aging Committee, said she supports the concept, and her committee plans to draft a bill that includes it.

“This really ensures compliance with Medicaid reimbursement rules and making sure that Connecticut is doing the right thing,” she said.

“It’s a way to siphon off money,” Rep. Jane Garibay, D-Windsor, co-chair of the Aging Committee, said of owners who pay family members inflated salaries. “We just can’t allow it. If everything were fine in nursing homes, it wouldn’t be as big of a deal. But obviously, that is not the case.”

Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, said he’s concerned about how the plan would affect collective bargaining agreements.

“We need to learn more about what the agency intends here, but we are concerned that the related party salary disallowances proposed here are specifically directed and undermining of bona fide and negotiated collective bargaining agreements between nursing home operators and the unions representing certain nursing home employees,” he said. 

“Understanding that no Aging Committee bill is published at this time, we are concerned the proposal seems to run counter to the well-established principle that the salary costs associated with nursing home collective bargaining agreements are inherently reasonable and should be recognized and honored because they are the result of a negotiated process.”

Representatives with SEIU 1199 New England, the state’s largest health care workers union, could not immediately be reached for comment.

Other DSS proposals

Officials with DSS also asked legislators to shorten the turnaround time for nursing home data submission and give the department the authority to add nursing home beds in areas where occupancy is high.

Department leaders want nursing homes to complete health assessments, known as minimum data sets, more quickly. Currently, facilities have two 30-day windows to submit the information. The proposal would require nursing homes to produce the data within five business days of a request.

DSS uses those assessments when calculating Medicaid reimbursement rates.

The department is also asking for the power to consider increases to bed capacity for nursing homes in areas where occupancy rates are 96% or higher for at least two consecutive quarters.

“The proposal will ensure adequate bed capacity across the state in the event there is limited or no available occupancy,” officials wrote to lawmakers.

Legislators said they are open to conversations about including three and four beds in larger rooms or converting new spaces into bedrooms, but they generally want to stay away from standard-size rooms with three or four occupants.

A bill passed and signed into law in 2024 limits the number of nursing home beds per room to two, down from three and four in some facilities, beginning July 1 of this year. The measure halts new admissions in rooms that already have two people; those already living in a room with three or four beds will not be forced to move.

“They’re looking for us to give them the ability to have those conversations with the nursing homes, whether it’s new construction or optimizing some of the spaces they have now, because we really don’t want to go back to three and four beds in a room,” Hochadel said. “We’re not proposing changes to that [limitation], but should there be certain areas where nursing homes are already at their maximum occupancy, DSS can have those conversations.”

Stuart said DSS is not looking to add additional beds to nursing home rooms.

“While there is not an immediate need for additional beds, DSS wants to ensure that the agency has flexibility if there is a need in the future,” she said. “The administration wants to make it possible to increase bed capacity in geographic locations, not add beds to rooms. Any request for additional capacity would go through the Certificate of Need process and would be conducted with all state and DPH regulations.”