New York State’s long-term care system is in crisis because of continued underinvestment in the state’s nursing homes and an inability to contend with other industries’ competitive wages.

Although Gov. Hochul proposed a five percent Medicaid rate reimbursement increase in the executive budget, and the legislature countered with 10 percent in their respective budget proposals, New York’s nursing homes will continue to severely struggle with inadequate Medicaid funding if long-term solutions are not actively sought. 

The financial crisis of the state’s nursing homes is affecting the health care system, contributing to hospital gridlock, and compromising access to care.

The undersigned organizations urge legislative leaders and the governor to increase the proposed rate to 20 percent, and to execute the state’s commitment to high-quality nursing home care and jobs in its FY 2023-24 state budget.

In 2021, New York State enacted public law section 2895-b (3)(a) to require minimum staffing standards in nursing homes. Under this new statute, nursing homes are  required to maintain average staffing hours equal to 3.5 hours of care per resident per day. In addition to the minimum staffing requirement, the state now requires nursing homes to spend at least 70 percent of revenue on resident care and 40 percent on direct care staff. 

To meet these standards, providers must increase their workforce, but face stiff competition from industries that can offer greater salaries in significantly less stressful environments.

Medicaid paid for approximately 72 percent of all resident days in New York State nursing homes in 2020. However, rates are based on 2007 costs (discounted by nine percent) and have not been increased for inflation in 15 years, with the exception of last year’s one percent increase. 

Since 2008, operating costs have increased by more than 40 percent. The dramatic increase in costs driven by the pandemic and inflation has exacerbated this problem and now jeopardizes the ability of many providers to continue caring for residents in the future. This model is simply not sustainable.

Short-term stopgap measures fail to recognize the continued burden that nursing homes have faced—and continue to face. We must collectively proceed with a thoughtful long-term coordinated approach in service of the state’s aging population and the providers and operators who support them.

New York’s nursing home sector is committed to working together to provide high-quality care to residents and family-sustaining jobs that can retain and attract a workforce for the long term. New York State must reinvest in its aging population and the facilities that serve it.

We strongly urge you to prioritize high-quality nursing home care for the most vulnerable individuals in our state and commit to sustained long-term funding solutions that include a 20 percent Medicaid reimbursement rate increase.

Signed by George Gresham, president, health care union 1199 SEIU; Stephen Hanse, Esq., president/CEO New York State Health Facilities Association/New York State Center for Assisted Living; James Clyne Jr., president, LeadingAge New York; Michael Balboni, executive director, Greater New York Health Care Facilities Association; Neil Heyman, president, Southern New York Association; Keith Chambery, executive director, New York Providers Alliance.