N.Y. PBH Law § 2828 — New York Code / Act PBH / Article 28 / Section 2828
Residential health care facilities; minimum direct resident care spending
Status: in_force

* § 2828. Residential health care facilities; minimum direct resident\ncare spending. 1. (a) Notwithstanding any law to the contrary, the\ndepartment shall promulgate regulations governing the disposition of\nrevenue in excess of expenses for residential health care facilities\nconsistent with this section. Beginning on and after January first, two\nthousand twenty-two, every residential health care facility shall spend\na minimum of seventy percent of revenue on direct resident care, and\nforty percent of revenue shall be spent on resident-facing staffing,\nprovided that amounts spent on resident-facing staffing shall be\nincluded as a part of amounts spent on direct resident care.\n  (b) Fifteen percent of costs associated with resident-facing staffing\ncontracted out by a facility for services provided by registered\nprofessional nurses or licensed practical nurses licensed pursuant to\narticle one hundred thirty-nine of the education law or certified nurse\naides who have completed certification and training approved by the\ndepartment shall be deducted from the calculation of the amount spent on\nresident-facing staffing and direct resident care.\n  (c) (i) Except as provided in subparagraph (ii) of this paragraph,\nsuch regulations shall further include at a minimum that any residential\nhealth care facility for which total operating revenue exceeds total\noperating and non-operating expenses by more than five percent of total\noperating and non-operating expenses or that fails to spend the minimum\namount necessary to comply with the minimum spending standards for\nresident-facing staffing or direct resident care, calculated on an\nannual basis, or for the year two thousand twenty-two, on a pro-rata\nbasis for only that portion of the year during which the failure of a\nresidential health care facility to spend a minimum of seventy percent\nof revenue on direct resident care, and forty percent of revenue on\nresident-facing staffing, may be held to be a violation of this chapter,\nshall remit such excess revenue, or the difference between the minimum\nspending requirement and the actual amount of spending on\nresident-facing staffing or direct care staffing, as the case may be, to\nthe state, with such excess revenue which shall be payable, in a manner\nto be determined by such regulations, by November first in the year\nfollowing the year in which the expenses are incurred. The department\nshall collect such payments by methods including, but not limited to,\nbringing suit in a court of competent jurisdiction on its own behalf\nafter giving notice of such suit to the attorney general, deductions or\noffsets from payments made pursuant to the Medicaid program, and shall\ndeposit such recouped funds into the nursing home quality pool, as set\nforth in paragraph (d) of subdivision two-c of section twenty-eight\nhundred eight of this article. Provided further that such payments of\nexcess revenue shall be in addition to and shall not affect a\nresidential health care facility's obligations to make any other\npayments required by state or federal law into the nursing home quality\npool, including but not limited to medicaid rate reductions required\npursuant to paragraph (g) of subdivision two-c of section twenty-eight\nhundred eight of this article and department regulations promulgated\npursuant thereto. The commissioner or their designees shall have\nauthority to audit the residential health care facilities' reports for\ncompliance in accordance with this section.\n  (ii) Notwithstanding the requirements prescribed by subparagraph (i)\nof this paragraph, the provisions of a demonstration project established\npursuant to a chapter of the laws of two thousand twenty-three that\namended this subparagraph shall apply to those residential health care\nfacilities who qualify for such demonstration project.\n  2. For the purposes of this section the following terms shall have the\nfollowing meanings:\n  (a) "Revenue" shall mean the total operating revenue from or on behalf\nof residents of the residential health care facility, government payers,\nor third-party payers, to pay for a resident's occupancy of the\nresidential health care facility, resident care, and the operation of\nthe residential health care facility as reported in the residential\nhealth care facility cost reports submitted to the department; provided,\nhowever, that revenue shall exclude:\n  (i) the capital portion of the Medicaid reimbursement rate;\n  (ii) funding received as reimbursement for the assessment under\nsubparagraph (vi) of paragraph (b) of subdivision two of section\ntwenty-eight hundred seven-d of this article, as reconciled pursuant to\nparagraph (c) of subdivision ten of section twenty-eight hundred seven-d\nof this article; and\n  (iii) any grant funds from the federal government for reimbursement of\nCOVID-19 pandemic-related expenses, including but not limited to funds\nreceived from the federal emergency management agency or health\nresources and services administration.\n  (b) "Expenses" shall include all operating and non-operating expenses,\nbefore extraordinary gains, reported in cost reports submitted pursuant\nto section twenty-eight hundred five-e of this article, except as\nexpressly excluded by regulations and/or this section. Such exclusions\nshall include, but not be limited to, any related party transaction or\ncompensation to the extent that the value of such transaction is greater\nthan fair market value, and the payment of compensation for employees\nwho are not actively engaged in or providing services at the facility.\n  (c) "Direct resident care" includes the following cost centers in the\nresidential health care facility cost report: (i) Nonrevenue Support\nServices - Plant Operation & Maintenance, Laundry and Linen,\nHousekeeping, Patient Food Service, Nursing Administration, Activities\nProgram, Nonphysician Education, Medical Education, Medical Director's\nOffice, Housing, Social Service, Transportation; (ii) Ancillary Services\n- Laboratory Services, Electrocardiology, Electroencephalogy, Radiology,\nInhalation Therapy, Podiatry, Dental, Psychiatric, Physical Therapy,\nOccupational Therapy, Speech/Hearing Therapy, Pharmacy, Central Services\nSupply, Medical Staff Services provided by licensed or certified\nprofessionals including and without limitation Registered Nurses,\nLicensed Practical Nurses, and Certified Nursing Assistant; and (iii)\nProgram Services - Residential Health Care Facility, Pediatric,\nTraumatic Brain Injury (TBI), Autoimmune Deficiency Syndrome (AIDS),\nLong Term Ventilator, Respite, Behavioral Intervention,\nNeurodegenerative, Adult Care Facility, Intermediate Care Facilities,\nIndependent Living, Outpatient Clinics, Adult Day Health Care, Home\nHealth Care, Meals on Wheels, Barber & Beauty Shop, and Other similar\nprogram services that directly address the physical conditions of\nresidents. Direct resident care does not include, at a minimum and\nwithout limitation, administrative costs (other than nurse\nadministration), capital costs, debt service, taxes (other than sales\ntaxes or payroll taxes), capital depreciation, rent and leases, and\nfiscal services.\n  (d) "Resident-facing staffing" shall include all staffing expenses in\nthe ancillary and program services categories on exhibit h of the\nresidential health care reports as in effect on February fifteenth, two\nthousand twenty-one.\n  (e) "Cost Report" shall mean the annual financial and statistical\nreport submitted to the department pursuant to sections two thousand\neight hundred five-e and two thousand eight hundred eight-b of this\narticle, and regulations promulgated pursuant thereto, which includes\nthe residential health care facility's revenues, expenses, assets,\nliabilities and statistical information.\n  3. For the purposes of this section, residential health care\nfacilities shall not include (a) facilities that are authorized by the\ndepartment to primarily care for medically fragile children, people with\nHIV/AIDS, persons requiring behavioral intervention, persons requiring\nneurodegenerative services, and other specialized populations that the\ncommissioner deems appropriate to exclude; and (b) continuing care\nretirement communities licensed pursuant to article forty-six or forty\nsix-a of this chapter.\n  4. The commissioner may waive the requirements of this section on a\ncase-by-case basis with respect to a nursing home that demonstrates to\nthe commissioner's satisfaction that it experienced unexpected or\nexceptional circumstances that prevented compliance. The commissioner\nmay also exclude from revenues and expenses, on a case-by-case basis,\nextraordinary revenues and capital expenses, incurred due to a natural\ndisaster or other circumstances set forth by the commissioner in\nregulation. At least thirty days before any action by the commissioner\nunder this subdivision, the commissioner shall transmit the proposed\naction to the state office of the long-term care ombudsman and the\nchairs of the senate and assembly health committees, and post it on the\ndepartment's website.\n  5. The commissioner shall issue regulations, seek amendments to the\nstate plan for medical assistance, seek waivers from the federal Centers\nfor Medicare and Medicaid Services, and take such other actions as\nreasonably necessary to implement this section.\n  6. The commissioner shall, if necessary, update reporting forms\ncompleted by residential health care facilities under section twenty-\neight hundred five-e of this article to include information to ensure\nall items referred to in this section and organize such information\nconsistent with the terms of this section.\n  * NB There are 2 § 2828's\n