Governor Signs Nursing Home Minimum Spending Demonstration Bill
On Dec. 22nd, Governor Hochul signed into law a bill that makes changes to nursing home minimum spending requirements, a statutory provision commonly referred to as “the 70/40 law.” The bill, now Chapter 747 of the Laws of 2023, modifies Section 2828 of the Public Health Law by adding a four-year demonstration program to mitigate penalties for homes that may be out of compliance if they have been successful in reducing the use of contract nursing staff. In addition, homes with low contract staff utilization would have non-Medicaid revenue excluded when minimum spending percentages are calculated. Please note that the provisions are subject to a pending chapter amendment reflecting further changes to the bill based on a negotiated agreement between the Governor and the Legislature. The Governor’s approval memo indicates that the negotiated changes are technical in nature, and LeadingAge NY's understanding is that the final agreement is substantively similar to the passed bill.
The penalty reductions are structured as a four-year demonstration program that would affect spending years 2023 through 2026. If the forthcoming chapter amendments are just technical, the Department of Health (DOH) will exclude all revenue other than Medicaid when examining compliance with minimum spending requirements for cost year 2023 for a facility whose contract nursing staff utilization is 10 percent or lower. This 10 percent threshold drops to 9 percent for the 2024 cost year and 8 percent for 2025 and subsequent years.
In addition, a facility facing a penalty for failing to meet minimum spending requirements would be eligible for a 50 percent reduction of that penalty if it has decreased contract nursing staff utilization by at least 30 percent. A facility that decreases contract staff utilization by between 20 and 30 percent would be eligible for a 25 percent reduction of its penalty. Penalty reductions would not apply to homes whose contract staff utilization is higher than 50 percent.
LeadingAge NY will confirm whether there are any changes to this information when the exact chapter amendment language becomes available. Please keep in mind that the demonstration program impacts spending year 2023. For the 2022 spending year, the provisions in effect prior to the enactment of Chapter 747 will apply.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841