8 April 2021: NY to Cap Nursing Home Profits at 5%, Require 40% for Staff, 70% for Patient Care

State will cap nursing home profits at 5%

This report describes some of what's in New York's new law regulating for-profit nursing homes.

As part of the recently announced state budget deal, nursing home profits will be capped at 5% starting in January of 2022, according to Governor Andrew Cuomo.

"We have nursing home reform legislation to make sure that facilities are prioritizing patient care over profits," said Cuomo Wednesday morning.

In addition to the profits cap, facilities will be required to spend at least 70% of all revenue on "direct resident care," including 40% on staffing.

We think it is quite possible the legislation will result in the unintended consequence of reducing the quantity of nursing home services available in New York. Not because of the profit cap, but through mandating the minimum expenditures for direct care and staffing, which will artificially inflate the basic cost of providing these services. Those mandated higher costs will come without corresponding increases in either the quantity or quality of care provided.