ALBANY, N.Y. – After a deadly year in New York's nursing homes, state lawmakers have passed legislation intended to hold facility operators more accountable for neglect and potentially force them to spend more on patient care.
Rules passed in recent days as part of a state budget deal would require for-profit homes to spend at least 70% of their revenue on direct patient care, including 40% on staffers who work directly with residents.
Under the deal, set to be signed by Gov. Andrew Cuomo, home operators will also face limits on their profit margins. Any profits in excess of 5% would have to be sent to the state.
"The goal is here to not only protect people in nursing homes but to dissuade bad actors from coming into this business," said Sen. Gustavo Rivera, Senate health committee chair. New York’s budget would also send $64 million to nursing home and acute care facilities to increase nurse staffing levels.
The nursing home industry has blasted the new revenue requirements, saying operators need flexibility for things like construction costs.
Stephen Hanse, president and CEO of the New York State Health Facilities Association, which represents nursing homes, said the big problem in the industry isn't owner greed, but poor reimbursement rates for care. He said it costs $266 on average to provide skilled nursing care per resident each day, but New York pays an average of $211.
The state's new spending mandate, he said, "harms the highest quality, fully staffed 4- and 5-star nursing homes by requiring that funds be redirected from other patient care investments and building improvements and be used only for certain staff."
More long-term care residents have died of COVID-19 in New York than any other state. Nursing homes alone have reported 13,800 deaths.
The Cuomo administration's decision to withhold information about those deaths from the public, for months, is being investigated by federal prosecutors and is one subject of a legislative impeachment inquiry.
Democrat Cuomo and lawmakers are also facing outcry from family members devastated by the state's high death toll and worries that residents, despite an ongoing vaccination campaign, are still at risk in some understaffed facilities.
"I had absolutely no idea this was how this nursing home industry was run until I had to deal with it," said Cecelia Potter, 63, of Cobleskill, whose 74-year-old husband is in a central New York nursing home.
Potter said her husband, a Navy veteran, hasn't been showered in weeks, receives little attention from overstretched aides and has declined in health "dramatically" over the past year.
She said she has seen the owner of her husband's nursing home driving fancy cars, and wants to know how much money he makes from residents whose care is largely funded by Medicaid.
"We need massive nursing home reform, statewide we do, and it’s probably countrywide," she said. "Just simply because these people that own these places are allowed to get away with a lot. They shouldn't be. This is our most vulnerable population."
One new law signed by Cuomo this week repeals a legal shield that protected nursing homes from some lawsuits during the COVID-19 pandemic.
New York's law was among the nation's most protective, and state Attorney General Letitia James called for lawmakers to repeal it in January.
"What [that] immunity provision did is give a green light to facilities to engage in practices and staffing patterns known to create unreasonable risk to residents," Syracuse University School of Law professor Nina Kohn said.
The immunity repeal doesn't explicitly allow family members to sue for substandard care during the months of the pandemic when the shield was in place — a right advocates for the elderly had pushed for. But lawmakers hope their efforts could help families who try to sue anyway.
New York's new rules requiring 70% of revenues be used for patient care will be lower than in some states. New Jersey requires that at least 90% of revenues be spent on patient care.
But "significant numbers" of nursing homes are spending 50% or 60% of their revenue on care and services for the residents, according to Assembly member Richard Gottfried, a New York City Democrat and Assembly health committee chair.
"Until now there were almost no rules," Gottfried said. "So if they were siphoning off money, even when you prove that, it didn’t have any consequences. The new system will require enforcement. It will require the health department or if necessary the state attorney general or comptroller, to audit the data and make sure that money is really being spent where the owner claims it is being spent."
Some family members and attorneys worry that for-profit nursing home operators will find ways around the revenue restrictions. About two-thirds of New York's nursing homes are for-profit.
John Dalli, an attorney who focuses on elder abuse and nursing home negligence, said the revenue cap doesn't, for example, prevent nursing home operators from doing business with related companies that may own the building they rent.
"I am skeptical about whether this ‘cap’ will have any real effect on the ultimate profits that flow through to these operators and their families," Dalli said.