Connecticut to switch nursing-home Medicaid payment to PDPM July 1; providers warn proposed budget changes could shrink net funding and strain rural access

State health and human services officials outlined a plan to adopt the federal Patient-Driven Payment Model (PDPM) for Connecticut nursing-home Medicaid reimbursement, saying the state will phase in the nursing component beginning July 1 with a three‑year corridor approach and targeted reinvestments.

DSS fiscal manager Nicole Godburn and Lorraine Cullen, branch chief for healthcare quality and safety at the Department of Public Health, introduced a technical briefing by Dan Brendell of Myers and Stafer. Brendell said the state will replace the RUG-based casemix weights used for normalization and Medicaid CMI calculations with PDPM’s nursing weights, rebasing to 2024 cost reports and applying a statewide case‑mix neutrality factor to keep growth within appropriations. "PDPM will be implemented July 1 of this year," Brendell said.

Why this matters: The move aligns Connecticut with federal changes to MDS and PDPM while preserving an acuity-based payment framework. State staff described a three‑year phase‑in that uses stop‑gain/stop‑loss corridors to smooth transitions, a Medicaid utilization pool to reward homes with large Medicaid shares, and a future quality incentive pool.

How it works: Brendell walked the committee through the rate‑setting math: determine a days divisor (the statutory 90% imputed occupancy floor), normalize CMI to remove acuity effects, derive normalized direct‑care cost per day, calculate a Medicaid CMI, and then multiply to produce Medicaid‑allowable direct‑care costs. The presentation described a Medicaid utilization pool that would direct an initial $2.5 million (rising to $5 million in later years) to homes with greater than 75% Medicaid utilization, paid pro rata by Medicaid days. A $10 million quality payment pool was described for a full PDPM implementation year (SFY 2029), with metrics still under development.

Industry and legislator concerns: Providers and legislators pressed for clarity on the budget math and the potential distributional effects. Jonathan Frink of LeadingAge asked why illustrative direct‑care cost limits shown in the modeling were lower than current limits; Brendell explained that updated cost data and larger PDPM nursing weights change the normalization denominator, producing different median values and limits. "It's down $14 or $15 from what the current direct care cost limit is," Frink said of the example he cited.

Matt Barrett of the Connecticut Association of Health Care Facilities said the governor’s proposal shows state savings tied to the transition and rebasing and warned the sector could face destabilizing reductions. Barrett said stakeholders interpret the figures as a sizeable gross savings when federal match is included and urged more reinvestment. Senator Austin and Senator Leser said they were concerned about rural and eastern Connecticut access: "Homes are going to shy away from taking in Medicaid patients," Senator Austin said, and they demanded facility‑level impact data and an expedited briefing for appropriations committees.

Other takeaways and data: DSS reported a statewide monthly occupancy of 90.3% for March and said roughly 2,000 excess beds remain statewide, noting geographic concentration of capacity. DPH also reported recent provider activity (nine ownership changes completed this federal fiscal year, two pending) and identified the top federal survey tags for the quarter—examples included failures in supervision (F689) and infection prevention (F880)—and reported 14 immediate‑jeopardy findings across 12 facilities in the last quarter.

Decisions and next steps: The committee approved the January meeting minutes. DSS and DPH agreed to share the webinar slide deck and modeling materials used in the presentation, and committed to schedule a follow‑up meeting with OPM and appropriations staff to review nursing‑home‑level impacts and the budget calculations before final legislative decisions.

What remains unresolved: Presenters provided examples and modeling but acknowledged some figures in the governor’s budget (savings, reinvestment timing and amounts) require confirmation with OPM and budget documents; providers and legislators asked for home‑by‑home financial impact analyses prior to the budget’s enactment.

Ending: The meeting concluded after scheduling follow‑up; no formal policy vote or regulatory change was taken at this session.