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Minimum Staffing and Spending Regulations Will Negatively Impact Residents, LeadingAge NY Says in Comments on Proposed Regulations

LeadingAge NY submitted comments on revised proposed nursing home minimum staffing regulations and minimum direct care spending regulations last week. The extensive comments noted that LeadingAge NY members strive to provide the highest quality of care and quality of life for residents and overwhelmingly satisfy the minimum direct care spending requirements. However, the minimum staffing requirements are infeasible in the context of the current health care workforce emergency. Approximately 80 percent of New York’s nursing homes were unable to comply fully with the minimum nurse and aide staffing hours required by these regulations in the first quarter of 2022.

Given the inevitability of penalties as a result of the staffing requirements, the interaction of the staffing and spending laws can drive a downward financial spiral for nursing homes, including those that are doing their utmost to comply – the payment of staffing penalties, which are not countable for meeting minimum spending requirements, may in turn trigger violations of the minimum spending law and seizures of "excess" revenue, further draining facilities of funds needed to recruit and retain staff.

Comments on Minimum Staffing Regulation

LeadingAge NY's comments were overall highly critical of the State's effort to enforce staffing minimums on nursing homes in the context of a workforce emergency. However, there were some positive aspects of the staffing regulation. The comments welcomed the references in the regulation to medication technicians – an advanced certified nurse aide (CNA) title that has not yet been recognized in New York State. LeadingAge NY also expressed support for the regulation's measurement of compliance on a quarterly average basis, rather than a more frequent basis. In addition, the comments expressed appreciation for the revision that eliminated the minimum penalty for non-compliance even after a Department of Health (DOH) determination that there are mitigating circumstances. The association called for this change in its Jan. 17th comments on the original proposed staffing regulation.

The association's comments on the staffing regulation were, nevertheless, critical of the description and implementation of the mitigating circumstances tests for purposes of avoiding or reducing potential penalties. They also requested clarification of the eligibility criteria for additional Medicaid funding to support compliance with the staffing requirements. The eligibility criteria set forth in the regulation appear to be inconsistent with the methodology set forth in the State's Medicaid State Plan Amendment. LeadingAge NY has criticized the Medicaid State Plan Amendment for providing funds to facilities that fail to meet minimum spending requirements, while denying funds to facilities that have managed to comply with minimum staffing requirements at the risk of severe financial distress.

Comments on Minimum Direct Care Spending Regulation

LeadingAge NY's comments on the minimum direct care spending regulation focused on the inappropriate exclusion of certain critical expenses from countable direct care expenditures and the inclusion of capital reimbursement and other operating revenue in the countable revenue category. Specifically, the comments pointed to negative impacts of excluding capital expenses from direct care spending, while including capital reimbursement in operating revenues. This policy will discourage facilities from making capital investments that create vibrant communities and homelike environments with strong infection prevention controls. In addition, the exclusion of expenditures on security, grounds, and medical records from direct care will discourage spending in these key cost centers. On the revenue side, LeadingAge NY called for the exclusion from countable revenues of investment income, philanthropic donations, Vital Access Provider (VAP) and CINERGY payments, as well as transformation grants, quality pool funds, and retroactive Medicaid payments. The comments also urged DOH to work with LeadingAge NY and other associations that represent hospital-based nursing homes to develop a reliable cost reporting alternative that is not financially or otherwise burdensome on affected facilities, with sufficient advance notice to enable timely reporting for the relevant fiscal year.

LeadingAge NY will keep members updated as these regulations move through the adoption process. The comments are available here and here.

Contact: Karen Lipson, klipson@leadingageny.org, or Darius Kirstein, dkirstein@leadingageny.org