Relates to the calculation of operating revenue for purposes of minimum direct resident care spending by residential health care facilities

• Democratic2

◆ The sponsor's argument

Why Andrew Gounardes says this is needed

The 2022-23 State Budget included $187 million in funding to help defray the cost of the nursing home staffing mandate. The distribution of this "safe staffing" funding required federal approval of the associated Medicaid State Plan Amendment. In March of 2023, the Department of Health released the state share of that funding to eligible free-standing nursing homes. To determine eligibility for this additional funding, the state used provisions of the law to distribute funding to providers that spend at least 70 percent of revenue on direct care and 40 percent or more on resident- facing staffing based on 2020 Medicaid Cost Report Data (the "minimum funding statute" or "70/40 test"). CMS approved the safe staffing Medicaid State Plan Amendment in 2024. As approved by CMS, the calculation of funding eligibility includes both the 70/40 test, as well as the 5% profit cap test included in the mini- mum spending statute. While COVID-19 relief and other one-time federal funding (e.g. FEMA funds) is excluded for the 70/40 calculation, it is unclear whether the one-time funding is to also be excluded from the 5% profit cap test. CMS and DOH determined that the COVID-19 relief and FEMA were not excluded from the definition of "operating revenue" for purposes of the 5% margin cap. Due to this determination, many not for profit nursing homes who historically experience operating losses actually exceeded the 5% profit cap test in 2020 due to the one-time federal COVID-related assistance. As a result, these nursing homes incurred a reduction and recoupment of the staffing assistance funds. Nursing homes in New York State are in dire need of funding due to years of inadequate Medicaid rates, healthcare staffing shortages, and little new investment in long-term care by the State. This bill will ensure that no nursing home loses the financial assistance they so desperately need, solely due to the inadvertent consequences of receiving one-time funding during the COVID-19 pandemic.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.