New York lawmakers appear to have reached a deal on requirements that nursing homes in the state spend at least a certain portion of their revenue on patient care and staffing.
The health and mental hygiene budget bill introduced over the weekend calls for nursing homes to spend at least 70% of their revenue on direct patient care, including 40% on resident-facing staffing, according to language released by the Legislature. Only 85% of such spending that relies on an outside staffing agency will count toward the minimum threshold.
Nursing homes that fail to meet the spending mandates or bring in a certain amount of excess revenue will have to put the difference into the state's nursing home quality pool, which is then redistributed to highly rated nursing homes, according to the bill.
"This pandemic has demonstrated that there is a need to strongly regulate and reform nursing homes in New York state to ensure they are providing the highest level of care to their patients," said state Sen. Gustavo Rivera, who chairs the health committee.
Estimates by Local 1199 of the Service Employee International Union, one of the country's largest healthcare unions, indicate that the spending requirements would shift an estimated $500 million in existing revenue to resident care and staffing. The average nursing home spent 65% on resident care and 35% on staffing in 2018, according to a union analysis of cost reports.
The spending mandates echo bills approved earlier this year by the state Legislature and included in Gov. Andrew Cuomo's 30-day budget amendments. The budget bill, which was due April 1 as part of the final state budget package, lays out the final language and definitions.
It includes a waiver for "unexpected or exceptional circumstances that prevented compliance" and "extraordinary revenues and capital expenses" incurred because of a natural disaster or other circumstances.
Exceptions would be subject to approval by the health commissioner, after the long-term care ombudsman and chairs of the Senate and Assembly health committees are given 30 days' notice, according to the bill.
"That provision is a recognition that they really don't know how this is going to turn out," said Stephen Hanse, president and CEO of the New York State Health Facilities Association. "There may be many negative unintended consequences, and those could be very significant."
Helen Schaub, New York state policy and legislative director for 1199SEIU, said the union supported adding a waiver over loosening the standards laid out in the bill. Lawmakers cited Superstorm Sandy as the kind of circumstance that a nursing home could cite to obtain a waiver, Schaub said.
The spending mandates have drawn criticism from the nursing home industry since lawmakers and union representatives made a big push for them in February.
Hanse, whose association represents more than 450 nursing homes and assisted-living providers statewide, said the requirements impose a "one-size-fits-all" standard on facilities that have unique needs and situations. According to his analysis, many top-rated long-term care facilities would not meet the 70% and 40% thresholds.
"The bill is akin to the state of New York saying to every family of four in the state of New York, 'This is how you have to spend your money,'" he said.
Schaub, of 1199SEIU, commended lawmakers for the bill's descriptive definitions of eligible and excluded spending categories. Hanse decried the definitions as arbitrary.
"It [the measure] jeopardizes the financing of these nursing homes," Hanse said.
Costs that qualify as direct resident care under the bill include everything from laundry and housekeeping to therapies, laboratory services and activities programs. Not included are administrative costs, other than nurse administration, and capital costs, debt service, taxes, capital depreciation, rent, leases and fiscal services.
"The spending ratio will help ensure that nursing home operators spend money on patient needs like staffing, quality food and other critical services, rather than siphoning funds into their pockets through real estate deals and other financial manipulations," said Assemblyman Richard Gottfried, chair of the health committee.
Lawmakers are expected to vote on the state budget bills this week.
from New York budget details nursing home spending requirements
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