Lawsuit Says New Rules for New York Nursing Homes Unconstitutional

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A month-long lawsuit has been filed against the New York State Health Commissioner by hundreds of nursing home operators.

The federal lawsuit argues that recent changes made by state lawmakers to the operation of nursing homes are unconstitutional.

The state legislature in April this year passed sweeping reforms to how nursing homes spend their money, following a huge outcry from advocates and lawmakers over how nursing homes operate. nurses during the pandemic.

An investigation by the attorney general’s office into nursing home practices during the pandemic found that some for-profit facilities with small staff also had higher numbers of resident deaths. That same report also showed that the administration of former Governor Andrew Cuomo underestimated nursing home deaths by more than 50%.

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In response, state lawmakers have passed numerous bills in an attempt to reform the healthcare system. Included in this was legislation that will require nursing homes to spend at least 70 percent of their income on direct resident care. At least 40% of this amount must be spent on direct caregivers.

Now, the operators of more than 250 nursing homes, including many professional associations, have filed a lawsuit in the U.S. District Court in Albany, saying the changes “illegally lay down obligations on how the facilities must. spend the money they have received or will receive from the federal government under the Medicare program for services already rendered to Medicare-eligible patients that are not paid for by state funds. And in order to subsidize New York State’s Medicaid program, it confiscates federal Medicare dollars intended to reimburse plaintiffs. “

Stephen Hanse, president of the New York State Health Facilities Association, says many of these nursing homes just don’t have the money to hire additional staff, which could force many of these facilities to close.

“The number one problem we are facing right now is a long-term care staffing crisis,” explained Hanse. “We don’t have the workers. Before the pandemic we didn’t have the workers and now the pandemic has only exacerbated the deficit.”

About 80% of nursing home care in New York City nursing homes is paid for by Medicaid, but the state has reduced Medicaid reimbursements for these facilities for more than 12 consecutive years.

“New York, under the previous administration, is the only state in the country to cut Medicaid funding to nursing homes,” Hanse said. “All other states except four others have increased Medicaid, at least temporarily, to help nursing homes provide care to their residents and meet the costs of fighting COVID.”

The lawsuit also shows how the state health department will confiscate nursing home profits that exceed 5 percent and demand that all excess funds be directed to the “quality pool” of nursing homes in the country. ‘State. This quality pool was created over 12 years ago to improve Medicaid reimbursement rates for nursing homes that provide high quality care to residents.

The 133-page lawsuit lists dozens of nursing homes that would have to pay hefty penalties if this law were to come into effect.

For example, the Upper East Side Rehabilitation and Nursing Center Inc. would have been assessed a penalty of $ 12,910,436 if the 70% / 40% spending mandate was in effect.

And the Boro Park Center for Rehabilitation & Health Care in Brooklyn would have received a penalty of $ 8,640,255 under this endowment rule.

The state’s health department declined to comment on pending litigation at this time.

The 1199SEIU, which represents many workers in state nursing homes, sent a statement saying that “the legislature has acted in response to many concerns about understaffing and poor quality nursing homes. of our state by passing legislation to ensure that a largely for-profit industry devotes the majority of its income to the residents they care for. It is disappointing that the industry is focusing its energy and attention on tackling these reasonable standards rather than working with all stakeholders to address common challenges and improve the quality of care.

Assembly member Ron Kim, who has fought hard for many of these reforms, said oversight of the facilities was long overdue.

“This is what you are committed to,” said Assembly member Kim. “You receive public interest funds. There must be some sense of responsibility that you spend the money on care and if you cannot provide such care then you definitely should not be in this business. “

The lawsuit also argues that the state has yet to receive approval from the federal government to enforce these new requirements, which take effect on Saturday, January 1.


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