Included within the Health & Mental Hygiene State Budget bill (S.2507-C/A.3007-C), which is anticipated to be passed by the Legislature today, are the following provisions pertaining to the 70/40 nursing home spending ratio. As previously noted, O’Connell and Aronowitz, NYSHFAs General Counsel, anticipates filing suit to challenge these and other provisions in either or both state and federal court in order to invalidate the terms. NYSHFA will continue to provide updates as these issues progress.
- Establishes minimum direct resident care spending thresholds effective on 1/1/22 where every RHCF must spend a minimum of 70 percent of revenue on direct resident care and 40 percent of revenue on resident facing staffing. Resident facing staffing is included within the amounts spent on direct resident care.
- 15 percent of costs associated with resident facing staffing shall be deducted for contracted services provided by RNs, LPNs and CNAs.
- RHCFs whose total operating revenue exceeds total operating and non-operating expenses by 5% or that fail to spend the minimum amount necessary to comply with the minimum spending standards for resident facing staffing or direct resident care, calculated on an annual basis, shall remit the difference to the State by 11/1 in the year following the year in which the expenses are incurred. Such funds shall be deposited into the Nursing Home Quality Pool.
- “Revenue” is defined as total operating revenue from or on behalf of residents, government payers or third-party payers.
- The definition of “Revenue” excludes the average increase in the capital portion of the Medicaid reimbursement rate from the prior 3 years.
- “Expenses” are defined as including all operating and non-operating expenses before extraordinary gains. Third party transactions or compensation that is greater than the fair market value for such transactions and the payment of compensation for employees not actively engaged in or providing services at the facility are excluded from expenses.
- “Direct Resident Care” is defined very broadly but excludes administrative costs (other than nurse administration), capital costs, debt service, taxes (other than sales taxes and payroll taxes), capital depreciation, rent and leases and fiscal services.
- “Resident facing staffing” is defined as including all staffing expenses in the ancillary and program services categories on Exhibit H of the cost report as of 2/15/21.
- Authorizes the Commissioner of Health to waive the requirements on a case-by-case basis, upon successful demonstration of unexpected or exceptional circumstances which prevent compliance.
- Authorizes the Commissioner of Health to seek a State Plan Amendment and promulgate regulations to implement the law.
Stephen B. Hanse, Esq.
President & CEO