2023 New York Laws › PBH - Public Health › Article 28 - Hospitals › 2828 - Residential Health Care Facilities; Minimum Direct Resident Care Spending.

* §  2828. Residential health care facilities; minimum direct resident
care spending. 1. (a) Notwithstanding  any  law  to  the  contrary,  the
department  shall  promulgate  regulations  governing the disposition of
revenue in excess of expenses for  residential  health  care  facilities
consistent  with this section. Beginning on and after January first, two
thousand twenty-two, every residential health care facility shall  spend
a  minimum  of  seventy  percent of revenue on direct resident care, and
forty percent of revenue shall be  spent  on  resident-facing  staffing,
provided  that  amounts  spent  on  resident-facing  staffing  shall  be
included as a part of amounts spent on direct resident care.
(b) Fifteen percent of costs associated with resident-facing  staffing
contracted  out  by  a  facility  for  services  provided  by registered
professional nurses or licensed practical nurses  licensed  pursuant  to
article  one hundred thirty-nine of the education law or certified nurse
aides who have completed certification  and  training  approved  by  the
department shall be deducted from the calculation of the amount spent on
resident-facing staffing and direct resident care.
(c)  (i)  Except  as  provided in subparagraph (ii) of this paragraph,
such regulations shall further include at a minimum that any residential
health care facility for which total  operating  revenue  exceeds  total
operating  and non-operating expenses by more than five percent of total
operating and non-operating expenses or that fails to spend the  minimum
amount  necessary  to  comply  with  the  minimum spending standards for
resident-facing staffing or  direct  resident  care,  calculated  on  an
annual  basis,  or  for  the year two thousand twenty-two, on a pro-rata
basis for only that portion of the year during which the  failure  of  a
residential  health  care facility to spend a minimum of seventy percent
of revenue on direct resident care, and  forty  percent  of  revenue  on
resident-facing staffing, may be held to be a violation of this chapter,
shall  remit  such excess revenue, or the difference between the minimum
spending  requirement   and   the   actual   amount   of   spending   on
resident-facing staffing or direct care staffing, as the case may be, to
the  state, with such excess revenue which shall be payable, in a manner
to be determined by such regulations, by  November  first  in  the  year
following  the  year  in which the expenses are incurred. The department
shall collect such payments by methods including, but  not  limited  to,
bringing  suit  in  a  court of competent jurisdiction on its own behalf
after giving notice of such suit to the attorney general, deductions  or
offsets  from  payments made pursuant to the Medicaid program, and shall
deposit such recouped funds into the nursing home quality pool,  as  set
forth  in  paragraph  (d)  of  subdivision two-c of section twenty-eight
hundred eight of this article. Provided further that  such  payments  of
excess  revenue  shall  be  in  addition  to  and  shall  not  affect  a
residential  health  care  facility's  obligations  to  make  any  other
payments  required by state or federal law into the nursing home quality
pool, including but not limited to  medicaid  rate  reductions  required
pursuant  to  paragraph (g) of subdivision two-c of section twenty-eight
hundred eight of this article  and  department  regulations  promulgated
pursuant  thereto.  The  commissioner  or  their  designees  shall  have
authority to audit the residential health care facilities'  reports  for
compliance in accordance with this section.
(ii)  Notwithstanding  the requirements prescribed by subparagraph (i)
of this paragraph, the provisions of a demonstration project established
pursuant to a chapter of the laws  of  two  thousand  twenty-three  that
amended  this  subparagraph shall apply to those residential health care
facilities who qualify for such demonstration project.
2. For the purposes of this section the following terms shall have the
following meanings:
(a) "Revenue" shall mean the total operating revenue from or on behalf
of residents of the residential health care facility, government payers,
or third-party  payers,  to  pay  for  a  resident's  occupancy  of  the
residential  health  care  facility, resident care, and the operation of
the  residential  health  care  facility  as reported in the residential
health care facility cost reports submitted to the department; provided,
however, that revenue shall exclude:
(i) the capital portion of the Medicaid reimbursement rate;
(ii) funding  received  as  reimbursement  for  the  assessment  under
subparagraph  (vi)  of  paragraph  (b)  of  subdivision  two  of section
twenty-eight hundred seven-d of this article, as reconciled pursuant  to
paragraph (c) of subdivision ten of section twenty-eight hundred seven-d
of this article; and
(iii) any grant funds from the federal government for reimbursement of
COVID-19  pandemic-related  expenses, including but not limited to funds
received  from  the  federal  emergency  management  agency  or   health
resources and services administration.
(b) "Expenses" shall include all operating and non-operating expenses,
before  extraordinary gains, reported in cost reports submitted pursuant
to section twenty-eight  hundred  five-e  of  this  article,  except  as
expressly  excluded  by regulations and/or this section. Such exclusions
shall include, but not be limited to, any related party  transaction  or
compensation to the extent that the value of such transaction is greater
than  fair  market  value, and the payment of compensation for employees
who are not actively engaged in or providing services at the facility.
(c) "Direct resident care" includes the following cost centers in  the
residential  health  care  facility  cost report: (i) Nonrevenue Support
Services  -  Plant  Operation  &   Maintenance,   Laundry   and   Linen,
Housekeeping,  Patient  Food Service, Nursing Administration, Activities
Program, Nonphysician Education, Medical Education,  Medical  Director's
Office, Housing, Social Service, Transportation; (ii) Ancillary Services
- Laboratory Services, Electrocardiology, Electroencephalogy, Radiology,
Inhalation  Therapy,  Podiatry,  Dental,  Psychiatric, Physical Therapy,
Occupational Therapy, Speech/Hearing Therapy, Pharmacy, Central Services
Supply,  Medical  Staff  Services  provided  by  licensed  or  certified
professionals   including  and  without  limitation  Registered  Nurses,
Licensed Practical Nurses, and Certified Nursing  Assistant;  and  (iii)
Program   Services   -  Residential  Health  Care  Facility,  Pediatric,
Traumatic Brain Injury (TBI),  Autoimmune  Deficiency  Syndrome  (AIDS),
Long     Term     Ventilator,    Respite,    Behavioral    Intervention,
Neurodegenerative, Adult Care Facility,  Intermediate  Care  Facilities,
Independent  Living,  Outpatient  Clinics,  Adult  Day Health Care, Home
Health Care, Meals on Wheels, Barber & Beauty Shop,  and  Other  similar
program  services  that  directly  address  the  physical  conditions of
residents. Direct resident care does  not  include,  at  a  minimum  and
without    limitation,    administrative   costs   (other   than   nurse
administration), capital costs, debt service, taxes  (other  than  sales
taxes  or  payroll  taxes),  capital  depreciation, rent and leases, and
fiscal services.
(d) "Resident-facing staffing" shall include all staffing expenses  in
the  ancillary  and  program  services  categories  on  exhibit h of the
residential health care reports as in effect on February fifteenth,  two
thousand twenty-one.
(e)  "Cost  Report"  shall  mean  the annual financial and statistical
report submitted to the department pursuant  to  sections  two  thousand
eight  hundred  five-e  and  two  thousand eight hundred eight-b of this
article, and regulations promulgated pursuant  thereto,  which  includes

the  residential  health  care  facility's  revenues,  expenses, assets,
liabilities and statistical information.
3.   For  the  purposes  of  this  section,  residential  health  care
facilities shall not include (a) facilities that are authorized  by  the
department to primarily care for medically fragile children, people with
HIV/AIDS,  persons  requiring behavioral intervention, persons requiring
neurodegenerative services, and other specialized populations  that  the
commissioner  deems  appropriate  to  exclude;  and  (b) continuing care
retirement communities licensed pursuant to article forty-six  or  forty
six-a of this chapter.
4.  The  commissioner  may waive the requirements of this section on a
case-by-case basis with respect to a nursing home that  demonstrates  to
the  commissioner's  satisfaction  that  it  experienced  unexpected  or
exceptional circumstances that prevented  compliance.  The  commissioner
may  also  exclude  from revenues and expenses, on a case-by-case basis,
extraordinary revenues and capital expenses, incurred due to  a  natural
disaster  or  other  circumstances  set  forth  by  the  commissioner in
regulation. At least thirty days before any action by  the  commissioner
under  this  subdivision,  the  commissioner shall transmit the proposed
action to the state office of  the  long-term  care  ombudsman  and  the
chairs  of the senate and assembly health committees, and post it on the
department's website.
5. The commissioner shall issue regulations, seek  amendments  to  the
state plan for medical assistance, seek waivers from the federal Centers
for  Medicare  and  Medicaid  Services,  and  take such other actions as
reasonably necessary to implement this section.
6. The  commissioner  shall,  if  necessary,  update  reporting  forms
completed  by  residential  health care facilities under section twenty-
eight hundred five-e of this article to include  information  to  ensure
all  items  referred  to  in  this section and organize such information
consistent with the terms of this section.
* NB There are 2 § 2828's