Skilled Nursing News reported New York’s new law limiting nursing home profits. However, large chains manipulate financial documents to look unprofitable so this law will have little effect. The new rules attempt to exclude expenses to any related party transaction or compensation that exceeds fair market value.
“Facilities have put profits over care for far too long and as we look forward, we must learn from the past and prepare for the future,” Cuomo said in a statement. “These facilities must be transparent and we have to have the tools necessary for holding bad actors accountable — that is the only way families will have peace of mind and I won’t sign a budget that doesn’t include these common-sense reforms.”
Starting in January 2022, nursing home operators in New York will return all profits in excess of 5% to the state. The 5% profit cap applies to the difference between total revenues and all operating and non-operating expenses, according to an analysis of the budget from the law firm Garfunkel Wild PC.
The proposal would increase staffing and establish spending as a percentage of revenue for specific care categories. The budget will require operators to spend 70% of revenues on direct patient care costs. 40% on staffing. The “minimum spending requirement” applies to expenses such as laundry, housekeeping, nursing, and ancillary services.
“Now, more than ever, it is important that nursing homes are staffed to provide high quality care and safety for their residents,” from the statement announcing the new budget. “These initiatives will have a positive impact on nursing home residents and staff, delivering the quality of care needed for the most vulnerable New Yorkers in a safe environment.”