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Nursing homes say state budget’s 1% Medicaid increase is not enough

Binghamton nursing home resident Brenda Margolis receives a COVID-19 vaccine in December of 2020.
New York State Department of Financial Services
Binghamton nursing home resident Brenda Margolis receives a COVID-19 vaccine in December of 2020.

New York nursing homes will see a Medicaid reimbursement rate increase under the new state budget passed over the weekend, but they argue it's still not enough.

Just as Gov. Kathy Hochul proposed in her executive budget earlier this year, the 2023 state budget will indeed restore a Cuoma-era 1.5% Medicaid cut and add an additional 1%.

Stephen Hanse, president and CEO of the New York State Health Facilities Association, a nursing home lobbying group, called the increase a step “in the right direction,” but that “more needs to be done.”

“While we're grateful for the investment of the 1% increase in Medicaid, we have a ways to go before New York can really adequately reimburse for the care of our Medicaid residents in nursing homes,” he said.

The taxpayer-funded Medicaid system is how nursing homes get reimbursed for taking care of residents who can’t afford to pay, and accounts for about 70-80% of nursing homes’ revenue.

The nursing home industry says a lack of cost-of-living adjustments over the last 14 years has resulted in a $55 shortfall between what the state reimburses them and the actual cost of caring for a Medicaid resident.

It would take a 32% Medicaid increase to make that up, they say.

“We recognize that the state would not be able to do that in one budget cycle,” Hanse said. “However, we've recognized that 1% is not enough and more needs to be done.”

Robert Mayer is CEO of the Weinberg Campus in Getzville, which includes the Rosa Coplon Living Center nursing home. He’s unsure the Medicaid increase will do much to help his nursing home and others across the state recover financially from the COVID-19 pandemic and boost worker wages.

“I mean, it's certainly a positive to see something going in the right direction after all these years of cuts and no cost-of-living increases,” Mayer said. “But it's woefully inadequate to really solve the problem.”

This comes as the state is implementing the nursing home safe staffing law and profit cap, which resident advocates and health care unions say will improve care. Hochul had paused the laws for three months, citing a shortage of health care workers, but ended the pause on April 1.

Nursing homes say there’s still not enough staff for them to comply with the laws. A report commissioned by the nursing home industry found they’d have to hire 5,600 additional workers to meet the safe staffing law’s requirement that residents get at least 3.5 hours of direct nursing care a day.

“Every single nursing home in the state of New York would welcome the opportunity to be able to meet the 3.5 staffing law. Unfortunately, the workers are not there,” Hanse said. “And the legislature needs to do more to implement initiatives in partnership with providers and labor to help recruit and retain a viable, vibrant workforce.”

The $220 billion state budget does make some efforts to grow the health care workforce. Over $1 billion has been earmarked for paying retention bonuses to health care workers, including up to $3,000 bonuses for workers earning less than $125,000 and who remain in their positions for one year.

Tom Dinki joined WBFO in August 2019 to cover issues affecting older adults.
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