Connecticut Administrative Code › Title 17 - Public Assistance and Welfare Services › 311 - Cost Related Reimbursement System for Long-Term Care Facilities\t › RULES OF PRACTICE › Article 4 - COST RELATED REIMBURSEMENT SYSTEM › Section 17-311-57 - Hardship appeals

Current through July 10, 2024
The commissioner shall consider requests for rate revisions
					 due to hardship for any of the following reasons:
(a) A sale of a facility is contemplated
				  because of the death of the principal owner of a facility, or the principal
				  owner is unable to conduct any business activities due to documented health
				  disability or to advanced age i.e., not less than 65 years. For purposes of
				  these regulations, a principal owner is defined as an individual proprietor or
				  the individual(s) owning the controlling equity in a partnership or
				  corporation.
For those sales which result from the factors mentioned in
					 the preceding paragraph, the property basis used in the application of the fair
					 rental value system, may under certain circumstances be increased as a result
					 of a sale of equity interest in a facility. Sales of partial interests and
					 sales to individuals who are partners or shareholders with the seller in the
					 facility subject to sale or any other long term care facility generally will
					 not provide a basis for property valuation adjustment.
To enable the state to consider a claim for an adjustment
					 in the property basis, the seller must petition the commissioner setting forth
					 all of the pertinent facts of such sale. The commissioner shall examine the
					 transaction and may consider factors such as the following in reaching a
					 decision as to whether and in what amount the property basis may be
					 adjusted.
(1) the reasonableness of
				  the selling price.
(2) the
				  arms-length relationships between the buyer, seller and mortgage
				  lender.
(3) the cost of the
				  property recorded by the seller and the effect thereon of inflationary cost
				  increases as measured by recognized price indices such as the dodge building
				  cost index and the implicit price deflator for the gross national
				  product.
(4) the extent to which
				  depreciation and amortization of the assets covered by the sale needs to be
				  adjusted to reflect the inflationary cost increases determined pursuant to (3)
				  above.
(5) the degree of financing
				  by the seller in relation to the total selling price of the property.
Based on consideration of the foregoing and any other
					 factors as the commissioner deems pertinent, the commissioner may decide that
					 an adjustment in property basis is appropriate, equitable and does not
					 prejudice the interests of the state.
No portion of the purchase price of any facility shall be
					 recognized as purchased goodwill includable in the base for computation of
					 return on equity.
In computing the fair rental value allowance for the
					 revised value of the property, the remaining useful life of the property shall
					 be the greater of:
(1) the remaining
				  useful life of the principal buildings purchased; or
(2) longest term of any mortgage on the
				  property.
Once the sale is effectuated, the commissioner must be
					 notified whether the buyer or seller shall be held financially liable for
					 future assets or the liabilities due to rate adjustments not known at the time
					 of the sale. Failure to submit this information at the time of the sale may
					 result in the commissioner not promulgating an interim rate for the new
					 owner.