LTCCC Policy Brief: New York’s Direct Care Minimum Spending Ratio

In April 2021, a law was passed in New York establishing new requirements for how much the state’s nursing homes must spend on care for their residents and setting forth limits on what nursing homes may spend on other categories of expenses. The law, set to go into effect at the start of 2022, was delayed multiple times through Executive Orders. In March 2022, Governor Kathy Hochul signed an Executive Order reinstating the provisions, and DOH notified nursing homes that the provisions are in “full effect” as of April 1, 2022. New York’s law was a critically needed, reasonable, and carefully targeted solution to address the failure of too many nursing home operators to provide sufficient staffing and supplies to meet the basic needs of their residents.

Download the full policy brief, “New York’s Direct Care Minimum Spending Ratio,” or access individual sections in the toggle boxes on the left.

Introduction

In April 2021, New York State passed a law establishing a direct care minimum spending ratio to ensure that the bulk of funds received by nursing homes are spent on resident care. The law will improve oversight of and accountability for the vast sums of taxpayer money nursing homes receive, and to ensure the bulk of it is spent for care and staffing. Read more…

Description of the Problem

Because of these inadequate standards and often lax oversight, many nursing home owners and operators have become increasingly sophisticated in using taxpayer dollars for their own benefit. Read more…

Analysis

This section examines the current policy approach, key definitions of the law, status in New York, and precedents in other states. Read more…

Conclusion

New York’s law, requiring nursing home providers to spend 70 percent of their revenue, largely taxpayer dollars, on resident care, of which 40 percent must be on staffing, was a critically needed, reasonable, and carefully targeted solution to address the failure of too many nursing home operators to provide sufficient staffing and supplies to meet the basic needs of their residents. Read more…