DOH Requests Financial Data from Hospital-Based Nursing Homes
(Sept. 2, 2025) Hospital-based nursing homes should have received a Dear Administrator Letter (DAL) on Aug. 28th requesting that they complete a targeted Health Electronic Response Data System (HERDS) survey on the Health Commerce System (HCS) by Oct. 14th. The survey is designed to collect the requisite 2023 financial data that will allow the Department of Health (DOH) to determine compliance with minimum spending requirements (i.e., provisions of section 2828 of the Public Health Law, commonly referenced as the “70/40” requirements). The information request mirrors the request that collected 2022 data. To access the survey, please log into the HCS and select “HERDS” from the Applications list. Click “Data Entry” and from the Activity option choose “NH Hospital Based Financial Information Survey 23.” Please note that the survey must be completed electronically (faxed or printed copies will not be accepted). While the facility’s Administrator may enter data for this survey, the Operator of the nursing home, or an executive officer with authority to certify on behalf of the facility and Operator, must complete the certification statement and submit the completed survey.
Members will recall that beginning with cost year 2022, nursing homes are required to spend at least 70% of their overall revenue on direct care (as defined in statute) and at least 40% of their revenue on resident-facing staff. In addition, homes are prohibited from having a “profit” margin that exceeds 5%. The legislation specifies that homes that fail to meet the 70/40 spending thresholds or that exceed a 5% margin will be subject to penalties and/or be required to remit “excess” revenue to the State. While DOH is able to determine compliance with minimum spending requirements for free-standing homes (i.e., those homes that file Residential Health Care Facility (RHCF)-4 cost reports that contain comprehensive financial data), DOH must rely on survey data for hospital-based homes whose cost reporting consolidates financial data with the sponsoring hospital.
While the Department has not issued any minimum spending requirement compliance determinations for 2022 at this time, members should be diligent in completing the survey for 2023. Although few, if any, LeadingAge NY members are at risk of failing to meet the spending requirements, we recommend that members review the provisions of the statute before completing the survey. A template that helps members estimate their direct spending and resident-facing staff costs is available here. Please keep in mind that starting with cost year 2023, the State enacted a demonstration program that allows homes that utilize 10% or less of nursing agency staff to only have Medicaid revenue, rather than all revenue, considered when compliance with 70/40 minimum spending requirements is determined. Additionally, starting with cost year 2023, a home that reduces its reliance on contract staff based on specified percent decreases would be subject to lower penalties than those that the home would otherwise have faced for failing to meet 70/40 requirements.
We encourage members to reach out to us if they have questions or concerns.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841