New York Nursing Homes Must Spend 70% of Revenue On Direct Patient Care Under Proposed Reforms

New York Governor Andrew Cuomo has signed a state budget deal into law, which requires nursing homes in the state to spend 70% of their revenue on direct patient care, and revokes the immunity from liability the state gave nursing homes for decisions they made during the COVID-19 pandemic.

The nursing home reform package comes after the state, and Cuomo in particular, came under fire for perceived failures in handling COVID-19’s impact on nursing homes. More than 15,000 nursing home residents and staff have died in New York state during the pandemic emerged, and a number of reports, including one by the state’s attorney general, has accused the state of key missteps which exacerbated the problem and claim the state initially undercounted COVID-19 nursing home deaths.

The new reforms were added to Senate Bill S5177 and the state budget. The bill revokes immunity from liability the state gave to nursing homes there to allow them more flexibility in making snap decisions regarding the pandemic. The budget language, however, requires for-profit nursing homes to use at least 70% of their revenue on direct patient care. That includes spending 40% on staffers who work directly with patients.

In addition, the reforms require nursing homes to give any profits in excess of five percent to the state and the budget gives $64 million to facilities statewide to increase staffing levels.

Throughout the COVID-19 pandemic, an estimated 216,219 cases have been confirmed in nursing homes nationwide, which have resulted at least 54,000 deaths among residents and staff, with nursing home coronavirus outbreaks often striking the worst performing facilities according to federal ratings.

A report released in January by New York Attorney General Letitia James, highlighted a number of failures by long-term care facilities and state regulators, which contributed to the high number of COVID-19 deaths at nursing homes in the state last year. Specifically, the report indicated New York nursing homes with lower pre-pandemic staffing ratings had a higher number of fatalities during the pandemic, when compared to facilities with sufficient pre-pandemic staffing rates.

Federal investigators continue to explore the possibility of nursing home neglect playing a role in the COVID-19 outbreak, which was first detected in a nursing home in Washington State that became the epicenter for the U.S. pandemic. Investigators say the nursing home failed to respond to the outbreak adequately, placing residents in jeopardy of illness and death.