{updated at 4:35 p.m.}
Gov. Ned Lamont announced a tentative deal between the state’s largest health care workers union and the nursing home industry late Thursday afternoon that would avert a strike Friday at 26 facilities.
The agreement came two hours after the administration sweetened its offer to fund the industry in the next state budget.
“I’m very confident we’ll have some news on that before the evening is out,” the governor said at 4:20 p.m. as he opened his televised briefing on the state’s coronavirus containment efforts.
“We have a basic agreement, which is a four-year deal, to put front and center our nurses who have been there at the nursing homes taking care of our seniors through thick and thin over the last 14 months,” Lamont added. “And they will be getting a significant raise over the next four years.”
“Nursing home residents, their families, caregivers and the operators all can rest easier tonight with this critically important breakthrough achievement,” said Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities.
Barrett praised nursing home operators and employees for committing long hours to negotiations and the Lamont administration for supporting the budgetary resources to avert a work stoppage.
SEIU District 1199 New England did not comment immediately after Lamont made his announcement.
To sweeten the deal, Lamont on Thursday pitched a 4.5 percent Medicaid rate increase for wages and health benefits in the coming fiscal year but offered a 6.2 percent hike in 2022-23. He originally proposed 4.5 percent for each of the next two fiscal years. Specific compensation for workers will be negotiated between each nursing home and the union.
The deal also includes:
- A temporary 10 percent increase in facilities’ Medicaid rates worth $86 million between this July and March 2022. These funds would go largely to mitigate lost revenues and added expenses homes have faced.
- And $13 million for enhanced training and staff development.
Though the contracts are between nursing homes and the workers, the state is a key player in these talks. That’s because nursing homes receive the bulk of their revenue from the state in exchange for serving residents and patients covered by Medicaid.
At first glance, the administration’s revised offer Thursday modestly scales back the increase in public funds that would be pumped into the industry, compared to what Lamont was offering on Tuesday. The state’s cost in the next two-year budget cycle would fall from $280.3 million to $267.2 million.
But the big advantage the revised offer holds for nursing homes and its workers is that it includes higher Medicaid reimbursement rates for major costs like salaries and benefits.
That means, if the offer is accepted, the higher rates to support raises and benefits would remain in place even after the next two-year budget expires, unless the legislature specifically votes to lower them, making the package more valuable to the industry over the long run.
The original offer included one-time state funding to support hazardous pay bonuses and a stipend that workers could put toward their retirement. That was taken out of the final offer. And an original proposal to dedicate $13.5 million in state funds for worker training and development was reduced to $13 million.
“The COVID-19 pandemic has had significant impacts on the nursing home industry and the frontline workers that served and worked during a difficult time,” Melissa McCaw, the governor’s budget director, wrote in a letter to the nursing home industry. “We recognize the impact that the pandemic has had on workers, residents and on the industry as a whole.”
If Lamont’s revised offer is accepted by nursing home owners and by SEIU District 1199 New England, 2,800 workers set to hit the picket lines Friday morning would remain on the job. It also would mean an additional 1,200 caregivers at 13 more homes bracing for a work stoppage on May 28 also would not strike.
Administration had said previous offer was the last
As late as Tuesday evening, Paul Mounds Jr., the governor’s chief of staff, insisted that the $280.3 million package Lamont had offered “was the best and final offer proposal which would be presented.”
Administration officials have noted that both of its offers are roughly four times the size of the average annual increase in state funding for nursing homes over the last 14 years.
But the administration carefully selected a timeframe most in its favor.
What many economists call the Great Recession began in 2007 and was followed by one of the most sluggish recoveries in state history, during which Connecticut lagged the nation in job and wage recovery.
In other words, few segments of state spending saw any significant increase during that period, and nursing home funding within the state budget averaged just 1.1 percent growth between 2007 and 2021.
And now, union leaders countered, the coronavirus has changed everything.
An industry whose caregivers are predominantly poor Black and Hispanic workers has been provided inadequate compensation and benefits for many years, and the pandemic has made many of those jobs intolerable, they say. District 1199 officials say 22 of their members died due to COVID-19 and hundreds more became sick because of it.
Most nursing home workers earn between $13 and $15 per hour, and the union predicted it would be difficult to attract adequate staff without base pay of $20 per hour.
An industry in crisis
Nursing homes in Connecticut have lost millions of dollars since the pandemic struck 13 months ago, due not only to increased health, safety and staffing expenses but also because of lost revenue. A significant portion of the industry’s revenue comes from patients temporarily assigned to homes for rehabilitation or recovery after surgery, yet the pandemic led many patients to delay operations and procedures whenever possible.
Lawrence G. Santilli, chairman of the Connecticut Association of Health Care Facilities, warned Lamont in a March 22 letter that the industry had entered an unprecedented time of financial instability.
Nursing home occupancy is down 15 percent from pre-pandemic levels, and federal and state Medicaid funding has long been inadequate to meet patient care costs.
On average, more than 80 percent of nursing home revenues involve patients whose care is covered by federal and state Medicaid dollars. Before the pandemic, though, that share was closer to 70 percent.
Industry and union officials first warned of a looming strike in mid-April when they noted caregivers at more than 50 homes were working under contracts that had expired on March 15.