General Assembly Raised Bill No. 328 mandates that nursing homes allocate at least eighty percent of their revenue towards direct patient care, amending subsection (a) of section 17b-340d of the general statutes, effective July 1, 2026. The bill repeals existing Medicaid reimbursement methodologies and introduces a new acuity-based approach, with the Commissioner of Social Services responsible for establishing Medicaid rates based on cost data and quality metrics. This new structure categorizes allowable costs into direct, indirect, fair rent, capital-related, and administrative costs, with specific limits set for each category. Adjustments in reimbursement rates will be permitted based on documented changes in fair rent and other circumstances, emphasizing the importance of quality care through required reporting on quality metrics.

Additionally, the bill includes provisions for nursing homes to share financial benefits from financing or refinancing with the state, establishes fair rent based on the rate of return for the cost year of bond issuance, and allows for cost efficiency adjustments for indirect and administrative costs below the state-wide median. Costs will be rebased every two to four years without inflation adjustments during rebasing years, and inflationary rate increases will be prohibited unless authorized. Non-compliance with the funding allocation may lead to decreased Medicaid reimbursement rates starting July 1, 2028. The bill also clarifies definitions related to direct care and nursing personnel and allows for interim rates for facilities facing unique financial circumstances, ultimately aiming to enhance the quality of care for Medicaid beneficiaries in nursing homes.