State lawmakers are poised to pass a budget that would require nursing homes to spend more on staffing following years of chronic understaffing, complaints of profits put ahead of care and a pandemic that killed 15,000 nursing home residents.
The nursing home industry says that the “one-size-fits all” spending requirement would have a devastating impact on facilities to pay other expenses. But advocates for residents claim it will improve the care they receive.
Nursing homes would be required to spend 70% of revenue on “direct resident care,” with 40% of that going to pay for registered nurses, licensed practical nurses and certified nursing assistants.
As Covid-19 swept through nursing homes in the state, killing thousands of individuals whose health was already compromised, nursing home operators struggled with staffing shortages and infection control in the facilities.
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Advocates and a union that represents thousands of nursing home workers in the state said the pandemic unmasked a system that put profits ahead of resident care.
Since 2007, one-third of the 47 nursing homes in Erie and Niagara have been bought by out-of-towners. For thousands of vulnerable nursing home residents, that hasn’t been
“The direct care ratio is an important step in the right direction toward holding nursing homes accountable for using the billions of dollars they receive toward resident care, rather than profits and lavish administrative salaries,” said Richard J. Mollot, executive director of the Long Term Care Community Coalition in New York City.
Stephen Hanse, president of the New York State Health Facilities Association, said Monday that the budget spending requirements could end up punishing highly rated nursing homes that are already fully staffed and, at the same time, do nothing to improve low-ranked facilities that may already be at those spending percentages.
“It is a one-size-fits all, telling nursing homes how they should allocate their funds. It fails to take into account the unique nature of nursing home patient populations and all the other aspects of the nursing home,” Hanse said. “It is analogous of the state saying every family of four has to spend their money this way.”
“This could jeopardize the continued operation of needed nursing homes throughout the state,” he said.
Out of 617 nursing homes across New York State, only 44, or 7%, have a five-star rating for staffing from the U.S. Centers for Medicare and Medicaid Services. In eight counties in Western New York, only two nursing homes – McAuley Residence in the Town of Tonawanda and Canterbury Woods in Amherst – have a five-star rating in staffing.
Across the state, 49% of the nursing homes earned a rating for staffing of one or two stars, which means “far below average” or “below average.”
At Safire Rehabilitation of Southtowns, a nursing home in Buffalo that the state fined $7,000 for understaffing in 2020, the total nursing staff hours worked per resident per day is 2 hours and 19 minutes. That is the eighth lowest mark in New York State, where the average is 3 hours and 49 minutes.
In thanking Gov. Andrew M. Cuomo and State Legislature leaders for reaching a consensus on the proposed 70/40 requirement, officials at Local 1199, Service Employees International Union, said Covid-19 exposed the need for change in the nursing home industry.
“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. For years, it has been residents, workers and families who have paid the price,” said Milly Silva, executive vice president of Local 1199 Nursing Home Division.
Union officials said the percentage requirement of revenue to be spent directly on staff represents a step in the right direction, but the union plans to continue its push for a “safe staffing” bill that would require minimum levels of staffing hours per resident.
As a result of the findings, Attorney General Letitia James said her office is currently investigating more than 20 nursing homes “whose reported conduct during the first wave of the pandemic presented particular concern.”
For at least a decade, state lawmakers have considered a safe staffing bill for hospitals and nursing homes. Rather than vote on the proposed law in 2018, the State Legislature directed the state Health Department to conduct a study and present the findings by Dec. 31, 2019.
More than seven months late, the Health Department issued its study in August. The study concluded that the proposed legislation would cost the state’s hospitals an additional $1.8 billion to $2.4 billion in labor costs and would cost nursing homes between $1.9 billion and $2.3 billion.
“Our members will continue to push for the rest of our reform agenda, including joining 38 other states in establishing minimum hours of care per resident per day,” said Silva, whose union represents 65,000 nursing home workers in the state, with about 5,000 in Buffalo and Rochester.
Nursing home operators had objected to the safe staffing legislation on the grounds that it would cost $1 billion annually. They argues that state Medicaid reimbursements, which cover the majority of nursing homes stays, had not kept up with the cost of providing care.
In opposing the 70/40 spending requirement, they again pointed out that the state is underfunding nursing homes.
“The governor and the legislature are well aware that the average cost of providing 24-hour Medicaid nursing home care in New York is $266 per resident per day, but the state only pays an average of $211 per resident per day – or $8.79 per hour,” Hanse said. “This $55 Medicaid deficit is the largest in the nation.”
The budget, he added, does not address the long-term care issue of retaining and attracting new workers. However, Local 1199 officials say the requirement to devote more revenue to staffing could help solve the problem.
Hanse argued that by diverting revenue to staffing, it would reduce the ability of nursing homes to make building improvements and pay other expenses, such as rent, leases, property taxes and debts.
Warren Cole, the co-chief executive officer of the Elderwood chain of nursing homes and assisted living facilities, has said the proposal would “wreak havoc” on an already distressed industry reeling from the pandemic.
To make his point, he cited an analysis of Elderwood’s highly rated Lancaster nursing home. The facility made $680,000 in 2019, but under the 70-40 mandate, Cole said, it would have been penalized $750,000 to $800,000.
Assemblyman Richard N. Gottfried, the long-time Democratic chairman of the Assembly’s Health Committee, offered an opposing perspective.
"The spending ratio will 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,” he said.
In pointing out that the budget includes $32 million in new funding to support nursing home staffing for registered nurses and certified nursing assistants, he said:
“Good nursing home operators are already hitting the 70/40 targets and have nothing to worry about. The owners and executives who make hefty profits and big salaries don't want that money to go for nursing home care. That's no surprise."
Hanse, however, said that in the last 12 years the state has “slashed” Medicaid spending for nursing homes by more than $2 billion.
