New York Nursing Homes To See 5% Profit Cap in 2022

Under a new budget established by Governor Andrew Cuomo’s office, all nursing home operators in New York will be required to return all profits in excess of 5% to the state beginning in January 2022.

Prior to the budget being announced, Governor Cuomo released a statement in late February regarding potential changes: “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. 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.”

The 5% profit cap will apply to the difference between total revenues and all operating and non-operating expenses. Excess revenues collected by the state will be deposited into an existing nursing home quality pool to ensure funds are available for nursing homes to meet high-quality standards.

In a statement from Governor Cuomo regarding the new budget, he said, “Now, more than ever, it is important that nursing homes are staffed to provide high-quality care and safety for their residents. 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.”

The new budget requires nursing home operators spend 70% of revenues on direct patient care costs, which includes 40% on staffing. The minimum spending requirement applies to costs like laundry, housekeeping, nursing, and ancillary services.

The budget and profit cap were announced the same day Governor Cuomo signed a formal repeal of COVID-19 liability protections granted to nursing homes, hospitals, and other health care providers. Governor Cuomo previously faced criticism for supporting the lawsuit shields and for the March 2020 order that required nursing homes to admit residents from hospitals regardless of COVID-19 testing results.

There’s hope that the new budget and regulations will hold facilities accountable for their spending and ensure quality care is provided to all residents. Unfortunately, the budget will not reverse the systemic issues nursing homes face.

If you believe your loved one has been injured or mistreated in their nursing home or long-term care facility, legal options may be available. At Thomas Law Offices, we believe negligent care providers should be held accountable for their actions, and we’re prepared to help your family. Contact us for more information.