Will NY follow New Jersey in raising nursing home wages, capping how much nursing homes can profit?

Oct 11, 2020

New York lawmakers may try to reform the state’s nursing home industry in light of thousands of COVID-19 deaths, and they don’t have to look far to find an example in another state. 

 

 


New Jersey recently passed legislation aimed at bolstering and better preparing nursing homes to handle the ongoing pandemic. The four new bills, passed by lawmakers in August and signed into law by Gov. Phil Murphy last month, increase the minimum wage for nursing home workers and limit how much money nursing homes can profit instead of investing it in resident care, among other changes.

 

A report commissioned by the New Jersey Department of Health and published in June found that the pandemic exacerbated long-standing issues in that state’s nursing homes, where more than 7,000 residents have died of COVID-19. Facilities were unprepared to prevent infection, the report found, and under-resourced due to staffing shortages.

 

“Once that report came out ... we had to do something to make sure we did something to improve the care in the nursing facilities,” said New Jersey Assemblywoman Cleopatra Tucker, who sponsored one of the bills. 

 

Tucker’s bill mandates nursing home care staff be paid at least $3 more than the state’s minimum wage. The June report found that the state’s nursing home workers, the overwhelming majority of whom are women of color, earn close to the current state minimum wage of $11 an hour, and have to work at multiple facilities to support themselves.

 

Tucker’s bill also created what may be the first medical loss ratio of its kind in the nation. It mandates nursing homes put 90% of their revenues toward caring for residents — not profits or administrative salaries. Three-fourths of the state’s nursing homes are for-profits, the report found, and they often aren’t transparent about their financials.

 

“This is not just a New Jersey issue,” Tucker said. “We hope by New Jersey passing this law, other states will look into it and see what they can take from these bills that we passed to make sure that the people in their states are taken care of properly as well.”

 

 Advocates in New York, where some estimate COVID-19 has killed as many as 11,000 nursing home residents, hope for the same thing.

 

Lindsay Heckler, an attorney with the Center for Elder Law and Justice in Buffalo, has been pushing for nursing home reform. She said, given the public outrage over the crisis in nursing homes, it’s possible New York lawmakers propose legislation like New Jersey’s, including a medical loss ratio.

 

“It's my understanding that members of the New York State Legislature are working on their own package of legislation in response to the nursing home hearings that they held earlier this summer,” Heckler said. “I believe there is a potential for a medical loss ratio to be part of that.”

 

Calls to several New York state lawmakers, including those involved in the nursing home public hearings in August, were not returned.

 

 Another advocate, Richard Mollot, executive director of the New York City-based Long Term Community Care Coalition, would also like to see a medical loss ratio in New York, where, like New Jersey, most nursing homes are for-profits. 

 

“Short of that kind of accountability, it's very hard because nursing homes can legally do what they want,” he said. “And the for-profits especially, they're not even subject to some of the requirements for not-for-profits in terms of that accountability for the money. So they can really do whatever they want.”

 

 Heckler said she likes that New Jersey’s medical loss ratio is paired with raising wages for nursing home care staff, which she said can help workers do a better job and attract more people into the field.

 

“People who work in nursing homes, this is a career, it's a noble career, and they should be paid accordingly,” Heckler said. “When you're paid accordingly to what the position entails, you have a better sense of pride, that's a lesser stressor.”

 

New York’s nursing home industry, perhaps unsurprisingly, does not support reforms like New Jersey's.

 

Stephen Hanse, president and CEO of the New York State Health Facilities Association, which represents 400 nursing homes and assisted living facilities across the state, argues that “New York has been ahead of [what] New Jersey is doing now.”

 

He noted that New York already has a higher statewide minimum wage than New Jersey. Certified nursing assistants in New York actually make on average $3 more an hour than those in New Jersey, the state’s June report found.

 

Plus, Hanse said New York already takes some steps to limit nursing home profits. A 2012 executive order says health care executives can’t make more than $199,000 a year if the funds come from taxpayer dollars. 

 

Also, Hanse said New York hasn’t increased Medicaid reimbursement rates to nursing homes in 13 years.

 

“So really nursing homes throughout New York, and throughout the nation for that matter, are truly struggling financially,” he said. “And as such, the time is not now. You really need to get through this [pandemic], see where we are before you put in any type of law.”

 

While New Jersey’s health department commissioned the report that supports reforms, there’s no guarantee the New York State Department of Health would do the same. 

 

In August, the department issued a report in opposition to a safe staffing bill, which would create minimum staffing level thresholds in nursing homes. The department argued that facilities don’t have enough money to hire additional workers, and that even if they did, there’s not enough workers to meet the demand. 

 

However, Heckler feels that the status quo is not working.

 

“If things were working as they should, we wouldn't have lost thousands of nursing home residents during this [pandemic],” she said. “I understand it's a challenging time, especially at the beginning and height of the pandemic in New York, but business as usual, our current method of nursing home structure is not working. We are, quite frankly, in some of these older, larger buildings, warehousing people, and it's not appropriate, and things need to change.”

 

 The New York State Legislature’s 2021 session is set to begin in January.