Over $510 Million Annually Diverted from NY Resident Care
In December of 2021 more than 200 nursing homes (“Plaintiffs”) filed a federal lawsuit against New York State, to stop implementation of a new state law on nursing home spending. That law requires nursing homes to spend at least 70% of their revenue on resident care and limits the facility operator’s profits to 5%.
The new law was deemed necessary to address the serious and persistent failure of many nursing home operators to provide sufficient staffing and supplies to meet residents’ basic clinical needs. As a result of lax monitoring and oversight, many nursing home operators have been permitted to skimp on staffing and services for years, profiting at the expense of basic dignity and safety. The tragic impact of the COVID-19 pandemic made it clear that something must be done to ensure that a reasonable amount of the money that New Yorkers pay to nursing homes for care is actually used to provide their care. To help the public gain insights into the quality and integrity of these nursing homes, The Long Term Care Community Coalition (LTCCC) compiled a dataset with information on the facilities named in the lawsuit, the money those facilities are claiming would have been “confiscated” if the law had been in effect in 2019, and relevant information about their safety and quality.
The lawsuit claims that it is unfair for the state to require nursing homes to spend a minimum amount of money on care or limit the profits they can pull from a nursing home. For 239 nursing homes, the Plaintiff’s complaint details the amount of excess income each operator would have had to pay to the state in 2019, if they had been required to limit profits to 5% and spend 70% of their income on residents. Altogether, these facilities reported excess income of over $510 million in 2019 alone.
Millions Diverted from Care
- The Plaintiff’s reported excess income could have paid the annual salary and benefits of nearly 5,600 additionalfull-time Registered Nurses. RNs are generally the only staff in the facility with the training to provide clinical oversight. Higher RN staffing levels are associated with positive resident outcomes including reduced pressure ulcers, infections, pain, and mortality.
- The facilities’ reported excess income was the equivalent of over 26 million additional nurse aide hours(hourly wage, excluding benefits). Nurse aides provide 90% of the care and services residents receive. Low nurse aide staffing is associated with higher rates of pressure ulcers, falls, and degrading conditions for residents.
- The average excess annual income claimed by the providers was $2,144,770. This figure excludes profits extracted via related party transactions. That is equivalent to almost 112,000 nurse aide hours per facility.
Poor Care + Demeaning Conditions = Big Profits
- Low-Performing but High-Profit. 36 of the 239 (15%) Plaintiffs are, according to federal records, among the worst facilities in the country. They alone are claiming $45 million in excess annual income. Seven of these nursing homes have an abuse warning icon on their listing with the U.S. government.
- Inadequate Care Staff. 85% of the Plaintiffs provide nurse staffing below 4.1 hours per resident per day (HPRD), the minimum needed to meet a resident’s basic clinical needs.
- Skimping on RNs. 73% of the Plaintiffs provide RN staffing below .75 HPRD, the minimum needed to meet a resident’s basic clinical needs.
- For-Profit. 95% of the Plaintiffs are owned and operated by for-profit entities. Statewide, New York’s share of for-profit entities is 65%.
Contact NY Elder Law Attorney, Robert Friedman, at 716-542-5444 for estate planning and Nursing Home Medicaid planning.