HARTFORD (CN) – One hundred and ten nursing homes say Connecticut’s Medicaid reimbursement system is “broken” and violates federal laws. The Connecticut Association of Health Care Facilities filed claims the state has underpaid nursing homes $100 million a year, and the state bases its payment system solely on its ability to pay, not on federally dictated guidelines.
Fed up after years of underpayments, Matthew Barrett, executive director of CAHCF said it is filed the federal lawsuit because it anticipates that the state will try again to balance its budget on the backs of the frail and elderly. Connecticut and Gov. M. Jodi Rell are trying to close a $500 million budget deficit.
“The current system is broken and violates federal laws,” Barrett told Courthouse News Service.
Rich Harris, Rell’s spokesman disagreed.
“The state’s payments to these for-profit nursing homes are neither arbitrary nor unlawful,” Harris said in a statement. “On the contrary, the state’s payment rates are among the highest in the nation, and the method used to determine payment rates is subject to approval by the federal Centers for Medicare & Medicaid Services.”
Barrett disputes that the Centers for Medicare and Medicaid Services have to approve the rate system formula.
“It’s misleading to say they’ve approved it because what they approve is the process for setting the rate,” Barrett said. The only reason Connecticut’s reimbursement rates are high is because Connecticut’s labor rates are high, Barrett added.
The complaint claims the nursing homes were scheduled for a long-overdue rate increase until Gov. Rell signed a budget bill, which canceled it. Rell also proposed no increases in the rate last year in her 2-year budget proposal.
Barrett said he will seek legislative fixes to the problem, but the lawsuit is meant to ensure that the nursing homes are protected if legislative efforts fail.
The state spends $1.2 billion a year on nursing home care for Medicaid patients.
Harris added, “Even as the actual number of Medicaid-eligible residents in Connecticut has dropped by 8 percent over the last 5 years, the amount of money the state has spent on Medicaid-funded care in nursing homes has increased by 9.3 percent.”
Again, Barrett said Harris’ statement is misleading. He said the homes have not received a rate increase since 2007.
The lawsuit is similar to complaints filed in California and Washington, which, like Connecticut, recently cut Medicaid rates based solely on state budget concerns. Lawyers for the nursing homes say federal courts at both the trial and appellate levels have issued orders stopping those rate cuts after finding that they violated federal law.
The nursing homes are represented by Michael Donnelly with Murtha Cullina.