New York Gov. Kathy Hochul (D) has delayed a new state law that requires nursing homes to spend a minimum of 70% of revenue on direct patient care and at least 40% of that on resident staffing.
Hochul over the weekend issued the 30-day stay of the law just days after more than 250 New York operators filed a lawsuit seeking to overturn it. It had been set to go into effect on Jan. 1. The stay means it won’t be effective through Jan. 30. The stay also puts a new minimum staffing requirement on hold for providers.
The federal lawsuit was filed Wednesday claiming that the new requirements violate the Constitution, according to Stephen B. Hanse, Esq., president and CEO of the New York State Health Facilities Association/New York State Center for Assisted Living.
“This law completely ignores the fact that nursing homes are on the front lines battling the COVID-19 pandemic while facing a nursing home staffing shortage crisis,” Hanse told McKnight’s Long-Term Care News on Thursday.
“The law as written violates the Constitution and disregards quality and seizes funds from providers at a time when the state needs to view long-term care as an investment and not an expense,” he added.
The measure also directs that regardless of the quality of care a nursing home providers, whether it sustained losses in prior years or whether it has a positive or negative net worth, the state’s Department of Health will confiscate any nursing home’s profits (or surplus for not-for-profit nursing homes) that exceed 5% in any year even if a nursing home complies with the 70%/40% spending mandate.
Under the law, gross revenues include revenue received by nursing homes for providing patient care from all payor sources — including the state’s Medicaid Program, the
federal Medicare program, private payers and third-party health insurance carriers.
Providers that fail to meet the annual spending ratio, or whose profits or surplus exceed 5%, will be required to pay the spending shortfall or exceeds profits to the state’s Department of Health by no later than November of the following year.
Providers in the state pushed back against the legislation when it was finalized by lawmakers in April.
Hanse at the time argued the rule “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,” he said. “Moreover, it would have once and for all treated our seniors as an investment and not as an expense.”