A proposed spending mandate that would force New York nursing homes to use at least 70% of their revenue on direct resident care is being criticized by providers as it nears approval. 

New York Gov. Andrew Cuomo (D) announced on Monday that lawmakers have reached a “conceptual agreement on all issues” for the state’s upcoming budget, which is expected to be passed this week. 

The legislation includes several reform measures aimed at nursing homes, with one mandate requiring operators to spend a minimum of 70% of revenue on direct patient care — and at least 40% of that on resident staffing.

The measure fails to address the “two most important issues facing nursing homes” in the state — Medicaid funding and workforce, according to the New York State Health Facilities Association. 

Stephen B. Hanse

“In failing to address these two issues, the state budget failed to implement true and meaningful nursing home reform,” said NYSHFA President and CEO Stephen Hanse. 

He explained that the average cost of providing 24-hour Medicaid nursing home care in the state is $266 per patient per day, but the state only pays an average of $211 — creating a $55 per-patient-day deficit for providers. That extrapolates to $385 weekly and well over $1,500 monthly in underpayment.

“Instead of implementing specific policies to recruit and retain new workers and reverse years of nursing home disinvestment, the state implemented a one-size-fits-all law dictating how all nursing homes are to allocate their financial resources, ignoring the unique nature and resident needs of each nursing home,” Hanse said in a statement on Tuesday. 

He added that the 70/40 spending mandate “does nothing to improve the quality in nursing homes” but rather hurts providers by requiring them to redirect that funding from other patient care investments and building improvements. 

“If the state was truly sincere about nursing home reform, the budget would have implemented measures to recruit and retain new workers in long-term care,” Hanse said. “Moreover, it would have once and for all treated our seniors as an investment and not as an expense.”