Cuomo, facing nursing home controversy, endorses capping how much nursing homes can profit

Feb 15, 2021

Gov. Andrew Cuomo spent most of his COVID-19 briefing Monday defending his administration’s handling of nursing homes, but, amid growing scrutiny over his own actions, he also for the first time endorsed limiting how much nursing homes can profit over resident care.

 


“If you're a for-profit nursing home, I believe it should be mandated how much you put back into the facility and how much profit you can make,” Cuomo said. “I believe that.”

 

For-profit nursing homes make up 65% of the state’s 613 total nursing homes. Last month’s New York State Attorney General’s Office report found some for-profit nursing homes transfer funds to related parties rather than invest in resident care, and try to get by with the lowest number of staff possible. 

Cuomo said he’s long believed there’s a “tension” in for-profit nursing homes.

 

“Do you want to hire more staff, or do you want to make more profit? Do you want to buy more PPE and stockpile more PPE, or do you want to make more profit? Do you want to buy new equipment, new beds, new sheets, new furniture, invest in the facility, or do you want to make more profit?” he said. “That tension is a problem, and that has to be resolved legislatively.”

 

The state of New Jersey has already done something similar. As WBFO reported in October, New Jersey created what’s believed to be a first-in-its-kind medical loss ratio. It mandates nursing homes put 90% of their revenue toward care, while only 10% can go toward profits and administrative salaries.

 

Cuomo did not mention specific percentages Monday, but a medical loss ratio bill recently introduced in the New York State Senate would mandate nursing homes put at least 70% of their revenue toward care. That bill, S.4336, is sponsored by state Sen. Gustavo Rivera, D-Bronx, and is currently in the Senate Health Committee. 

 

Cuomo said his profit-capping proposal would be included in the 30-day amendments to his 2021 executive budget proposal. The budget is due to be passed by lawmakers April 1.

 

The proposal is already getting a cold reception from for-profit nursing homes. The New York State Health Facilities Association, which represents both for-profit and nonprofit nursing homes, released a statement Monday afternoon condemning the state’s handling of nursing homes.

 

Stephen Hanse, president and CEO of NYSHFA, said in a statement that New York took a “hospital centric” approach during the pandemic that led to limited staffing, testing and PPE for nursing homes. 

Hanse also said New York has cut Medicaid reimbursement rates to nursing homes for 12 years, leaving a $55-a-day-per-resident shortfall between what New York pays for a Medicaid resident’s care and what it actually costs to care for that resident.

 

“Policymakers and legislators must stop the blame game, work in partnership with nursing home providers and view long-term care as an investment not an expense,” Hanse said.

 

A medical loss ratio for nursing homes has long been on the wish lists of advocates for the state’s nursing home residents. Lindsay Heckler, an attorney with the Center for Elder Law and Justice in Buffalo, told WBFO in October she believed a medical loss ratio could be part of lawmakers’ nursing home reform bills in the 2021 legislative session. 

 

Richard Mollot, executive director of the Long Term Community Care Coalition, a New York City-based advocacy group, told WBFO that without a medical loss ratio, nursing homes can “really do whatever they want” with their money.

 

Cuomo’s endorsement of a medical loss ratio is somewhat out of step with some of the pro-nursing home moves his administration has made during the pandemic.

 

Cuomo, with a provision in last year’s budget, granted legal protection to nursing home executives threatened with lawsuits stemming from COVID-19 outbreaks. His Department of Health released a report in August advising against a safe staffing bill that would have created minimum staffing level requirements for nursing homes to follow. The report said nursing homes didn’t have enough money to hire additional nurses.

 

But Cuomo has faced growing criticism over his response to nursing homes.

 

His administration for months refused to reveal the number of nursing home residents who died of COVID after being taken to a hospital, causing the state’s nursing home COVID death toll to be undercounted by about 40%. The administration finally revealed the number last month after a court order.

 

The New York Post reported Friday that Cuomo’s top aide admitted they withheld the true number out of fear it would be used against them by the Trump administration’s Department of Justice

 

Cuomo on Monday apologized to families of deceased nursing home residents for the anxiety that the withholding of the number created, but also said he did not think an independent investigation was necessary because “there’s nothing to investigate.”