Revised Regulations on Nursing Home Minimum Spending and Minimum Staffing Published
The Department of Health (DOH) published long-awaited revised proposed regulations governing the nursing home minimum staffing hours and minimum direct care spending requirements in the Aug. 10, 2022 State Register. The revised proposed regulations make modest changes to the proposed regulations originally published in November 2021 and include the Department's responses to some of the comments they received. LeadingAge NY submitted extensive comments on both regulations when they were first published (available here and here) and will be submitting new comments on the revised regulations.
As LeadingAge NY requested in its original comments, the revised proposed regulations eliminate a mandatory minimum penalty for nursing homes that can demonstrate mitigating factors, such as an acute labor shortage. In addition, the revised regulations include provisions to align with amendments to the underlying direct care spending statute enacted earlier this year. Notably, a provision in the minimum staffing regulations outlining how appropriated funds will be spent to support compliance is not consistent with a recently submitted Medicaid State Plan Amendment (SPA) seeking federal approval of the supplemental payments.
Minimum Staffing Regulation
The revised proposed minimum staffing regulation makes two changes in relation to facilities seeking mitigation of penalties. First, it modifies the standard to qualify for mitigation of penalties based on the existence of an acute labor shortage in a region. Specifically, the revised regulation requires nursing homes that seek mitigation of penalties due to an acute labor shortage to demonstrate that they have taken steps to protect residents, including discontinuing admissions or transferring residents to another facility. The original regulation had included 'closing units' as another step that should be taken to qualify for mitigation. This step was removed, while 'transferring residents' was retained, even though DOH has instructed nursing homes, via a call with associations, not to transfer residents in order to comply with the minimum hours requirements.
Second, the revised regulation eliminates a minimum fine of $300 per day for facilities that qualify for mitigation. Instead, the Department would have discretion to determine the amount of the fine.
The revised regulation appears to retain the Jan. 1, 2022 effective date for compliance, even though the Governor issued an executive order (EO) suspending the requirements until April 1, 2022.
The revised minimum staffing regulation also retains a provision governing the allocation of funds to support compliance with staffing requirements. This provision requires facilities to comply with the minimum direct care spending statute (Public Health Law Section 2828) in order to qualify for staffing funds. Interestingly, the proposed SPA submitted at the end of June to secure federal approval of these Medicaid payments does not require compliance with the direct care spending statute.
Minimum Direct Care Spending Regulation
The revised direct care spending regulation makes two changes in the original regulation:
- It pro-rates the amount that may be recouped from non-compliant facilities, based on the suspension of enforcement for the first quarter of 2022 by EO; and
- It aligns with amendments to the minimum direct care spending statute that were enacted in early 2022. Specifically, those amendments revise the definition of "revenue" to exclude reimbursement of provider assessments, capital reimbursement received by facilities with a four- or five-star rating (provided that the reimbursement is not for an expenditure made to a related entity), and federal grants for pandemic-related expenses.
Oddly, the cost report section of the regulation refers only to the 2019 cost reports, implying that the 2019 cost report will be used as the basis for the first year of enforcement. The proposed SPA for the staffing funds, by contrast, would rely on the 2020 cost report.
LeadingAge NY has reached out to leadership in DOH and the Governor's office with our questions and concerns regarding these and other issues, but has not yet received a response.
We welcome members' input into our comments on the regulations and encourage members to submit their own comments directly to the Department here. If you would like your feedback included in the LeadingAge NY comments, please submit it to Karen Lipson, klipson@leadingageny.org, or Darius Kirstein, dkirstein@leadingageny.org, by Sept. 6th.
Contact: Karen Lipson, klipson@leadingageny.org, or Darius Kirstein, dkirstein@leadingageny.org.