Requires nursing homes to spend at least the resident care amount necessary to achieve a required resident care percentage and a sufficient direct care service amount so it does not have a direct care service deficit.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5685A Revised 3/8/2021
TITLE OF BILL:
An act to amend the public health law, in relation to establishing a
required resident care spending ratio for nursing homes
PURPOSE OR GENERAL IDEA OF BILL:
To require that nursing homes spend at least a set minimum amount of
total operating revenue on resident care, and of that, of that at least
a set amount on direct care nursing staff
SUMMARY OF SPECIFIC PROVISIONS:
Adds a new Public Health Law § 2805-aa to define "resident care" to
include direct nursing care (RN, LPN, CNA); support and program services
such as housing, laundry, food service, other therapeutics; and recre-
ational programs; but excluding administrative costs (other than nurse
administration), and capital costs, rent, or debt service. Where direct
care is provided through a contract agency, only 80% of that cost will
apply towards the required percentage.
Nursing homes must spend at least a 70% of total operating revenue on
resident care. Within that required spend, 60% of that amount must be
spent on direct nursing care. If a nursing home fails to meet the
required percentages in a calendar year, it would owe the difference to
DOH (to be collected, if necessary, by deducting from Medicaid payments
or by lawsuit). The money would go to the Nursing Home Quality Improve-
ment Demonstration Program under PHL § 2808-d(6).
The 2021 report of the State Attorney General found that "The current
state reimbursement model for nursing homes gives a financial incentive
to owners of for-profit nursing homes to transfer funds to related
parties (ultimately increasing their own profit) instead of investing in
higher levels of staffing and PPE." The AG's report is the most recent
of much analysis that has reached similar conclusions. Some not-for-pro-
fit nursing homes also siphon off revenue through contracts and real
estate arrangements into various pockets.
This bill will require operators and owners to prioritize the care of
their residents first and foremost. The stunning growth of the for-pro-
fit nursing home industry over the past decade indicates that where
there was money being made, that money should be redirected towards
improve the wellbeing of residents and the staff that care for them.
PRIOR LEGISLATIVE HISTORY:
STATE OF NEW YORK
2021-2022 Regular Sessions
February 23, 2021
Introduced by M. of A. GOTTFRIED, GUNTHER, GALEF, CLARK, TAYLOR, PAULIN,
ABINANTI, BICHOTTE HERMELYN, McDONALD, HEVESI, BRONSON, WALLACE,
STECK, DINOWITZ, THIELE, PERRY, JACOBSON, ENGLEBRIGHT, JACKSON,
CUSICK, ANDERSON, SIMON, BARRETT, SILLITTI, COOK, COLTON, McMAHON,
AUBRY, RICHARDSON, FORREST, KELLES, BUTTENSCHON, SANTABARBARA, DURSO
-- read once and referred to the Committee on Health -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the public health law, in relation to establishing a
required resident care spending ratio for nursing homes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public health law is amended by adding a new section
2 2805-aa to read as follows:
3 § 2805-aa. Nursing home resident care ratio. 1. As used in this
4 section, the following terms have the following meanings:
5 (a) "Resident care" means: (i) direct care provided by certified nurse
6 aides, licensed practical nurses, and registered nurses; (ii) support
7 services including housing, laundry, housekeeping, food service, nurse
8 administration, activity program, social services and transportation as
9 identified in reports required by the department; (iii) ancillary
10 program services including medical, dental, podiatric and laboratory
11 services, inhalation and other physical, mental, occupational therapeu-
12 tics as identified in reports required by the department; and (iv)
13 program services for residents including personal grooming, as identi-
14 fied in reports required by the department. Resident care does not
15 include administrative costs (other than nurse administration), capital
16 costs, rent, or debt service.
17 (b) "Resident care amount" means the amount spent by the nursing home
18 for care of residents of the nursing home; provided that for any amount
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 5685--A 2
1 spent for contracted or purchased personal services, only eighty percent
2 of that amount shall count as spending on resident care.
3 (c) "Total operating revenue" means the revenue received by the nurs-
4 ing home from or on behalf of residents of the nursing home, government
5 payers, or third-party payers, to pay for a resident's occupancy of the
6 nursing home, resident care, and the operation of the nursing home.
7 (d) "Required resident care percentage" means the ratio of a nursing
8 home's resident care amount to its total operating revenue, required by
9 subdivision two of this section.
10 (e) "Resident care deficit" means the amount, in dollars, by which the
11 nursing home's resident care amount is less than the required resident
12 care percentage.
13 (f) "Direct care service" means the amount, in dollars, spent on
14 direct care by certified nurse aides, licensed practical nurses, and
15 registered nurses which shall be at least sixty percent of the required
16 resident care percentage.
17 2. Every nursing home shall, in every calendar year, spend at least
18 (a) the resident care amount necessary to achieve the required resident
19 care percentage and (b) the sufficient direct care service amount. For
20 the calendar year two thousand twenty-two, and every year thereafter,
21 the required resident care percentage shall be seventy percent.
22 3. For any calendar year in which a nursing home has a resident care
23 deficit or direct care service deficit, it shall pay to the department
24 an amount equal to the deficit, payable in a manner and time determined
25 by the commissioner in regulations. Where a nursing home does not pay as
26 required by this subdivision, the commissioner shall sue (represented by
27 the state attorney general) the nursing home to obtain the unpaid
28 amount, or deduct the unpaid amount from medical assistance payments
29 otherwise due to the nursing home, or a combination of those methods.
30 Moneys so collected shall be transferred to the nursing home quality
31 improvement demonstration program, to be used under subdivision six of
32 section twenty-eight hundred eight-d of this article in support of
33 projects or programs designed to improve specific areas of quality of
35 4. For purposes of this section, a nursing home's spending, revenue
36 and percentages of various amounts shall be calculated on an accrual
37 basis, under regulations of the commissioner.
38 5. The commissioner shall make regulations, make medical assistance
39 state plan amendments, seek waivers from the federal centers for Medi-
40 care and Medicaid services, and take other actions reasonably necessary
41 to implement this section.
42 6. The commissioner shall, by regulations and otherwise, make sure
43 that reports by nursing homes under section twenty-eight hundred five-e
44 of this article include information as to all items referred to in this
45 section and organize that information consistent with the terms of this
47 § 2. This act shall take effect immediately.