For-profit New York nursing homes will have to spend more of their revenue on staffing and keep less in profits under a provision in the state budget approved Tuesday. Agreement on the $212 billion state budget by New York Gov. Andrew Cuomo and lawmakers came almost a week past the April 1 deadline.
Nursing homes will have to spend at least 70% of their revenues on direct resident care. Of that amount, 40% must be spent on nurses, certified nurse aides and other staff members who work directly with residents. The provision also caps profits at 5%. When total operating revenue exceeds expenses by more than 5%, the excess revenue must be turned over to the state. The state will redistribute the money to nursing homes to help them improve quality.
“We not only balanced our budget, we are also making historic investments to reimagine, rebuild and renew New York in the aftermath of the worst health and economic crisis in a century,” Cuomo said in a press release announcing the deal.
The spending formula will take effect Jan. 1, 2022.
1199 SEIU, the union that represents workers at 343 nursing homes in New York, lobbied hard for the change.
“Our members took their grief and anger over what happened over the past year and turned it into action to demand reform, and today, Albany listened. This pandemic has made abundantly clear that the broken nursing home industry has allowed owners to maximize their own profits at the expense of providing quality care,” said Milly Silva, executive vice president of 1199SEIU’s nursing home division. “For years it has been residents, workers and families who have paid the price. We thank Governor Cuomo, Majority Leader Stewart-Cousins and Speaker Heastie for ensuring these essential reforms are enshrined in law.”
Many long-term care providers, however, have criticized the measure, maintaining that it 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.
“In failing to address these two issues, the state budget failed to implement true and meaningful nursing home reform,” NYSHFA President and CEO Stephen Hanse told McKnight’s Long-Term Care News this week.