Sec. 10a-194b. Withholding of certain funds of nursing homes which are in default. Notification of other agencies.
Sec. 10a-194b. Withholding of certain funds of nursing homes which are in
default. Notification of other agencies. On and after the time a participating nursing
home is required pursuant to the terms of its agreement with the authority to fund the
working capital fund reserve account at the working capital requirement and the renewal
and replacement fund at the renewal and replacement requirement, if the combined
balance of the working capital fund reserve account and the renewal and replacement
fund for a participating nursing home is equal to or less than ninety days of debt service,
or when a participating nursing home is in default under its agreement with the authority
or when the authority has reasonable grounds to predict that the entity is likely to become
in default on any obligations to the authority occasioned by the failure of a nursing home
to make any payment to the authority or the trustee for the bonds or notes of the authority,
the authority shall send a notice in writing to the Commissioner of Social Services stating
that one of the conditions stated in this section has occurred. Upon receipt of such notice
from the authority the commissioner shall withhold the amount of any funds in the
state's custody that are due or payable to such participating nursing home that are deemed
as the allowance for property costs until the authority certifies the nursing home is no
longer in default or satisfactory arrangements to secure payment in full and in a timely
fashion of all such obligations of the participating nursing home under the agreement
have been made. Funds subject to withholding under this section shall include, but are
not limited to, federal and state grants, contracts, allocation or appropriations and shall
not exceed the portion of the fair rent or capital depreciation plus interest expense receivable by the participating nursing home from the department. If the authority subsequently
notifies the commissioner in writing that the participating nursing home is unable to
cure its default under the agreement with the authority or arrangements satisfactory to
the authority to secure payment in full and in a timely fashion have not been made
after a reasonable period of negotiations, the commissioner shall make available to the
authority any funds withheld by the commissioner from the participating nursing home
under this section. The authority shall apply such funds to the payments required to be
made to the authority or trustee by the participating nursing home to satisfy its obligations
to the authority under its agreement with the authority or to satisfy the obligations of
the authority with respect to any bonds issued by the authority for the benefit of such
participating nursing home or required by the terms of any other law or contract to be
paid to the authority or trustees for the benefit of holders or owners of bonds issued on
behalf of the participating nursing home upon default of the participating nursing home.
Concurrent with any notice from the authority to the commissioner under this section,
the authority shall give notice to any other agency, department or authority of the state
that exercises regulatory, supervisory or statutory control over the operations of the
participating nursing home. Upon notification, such agency, department or authority
shall immediately undertake reviews to determine what action, if any, that agency, department or authority should undertake to assure the continued prudent operation of
such participating nursing home or provision of services to the people served by such
participating nursing home.
(P.A. 92-261, S. 12, 17; P.A. 93-102, S. 1; 93-262, S. 1, 87; 93-435, S. 59, 95.)
History: P.A. 93-102 amended section to clarify provisions re default of a participating nursing home; P.A. 93-262 and
P.A. 93-435 authorized substitution of commissioner and department of social services for commissioner and department
of income maintenance, effective July 1, 1993.