State Seeks Federal Approval for Nursing Home Workforce Funding

The Department of Health (DOH) has filed a Medicaid State Plan Amendment (SPA) seeking federal financial participation for workforce funding for nursing homes. The funding is designed to assist providers in meeting the costs of staffing requirements that will be enforced beginning April 1, 2022 using Payroll-Based Journal (PBJ) data submitted for that date forward. By filing the SPA before the end of the quarter, the State preserves its ability to begin receiving federal matching funds for the initiative back to April 1, 2022.

The Amendment seeks approval to make annual payments of $187 million for each of three years, beginning this year. It contemplates quarterly payments to those facilities that are required to add staff to meet the mandated staffing thresholds. Facilities that need to add staff but that fail to spend 40 percent of their revenue on resident-facing staff (per the minimum spending requirements commonly referred to as "70/40") would have their staffing funding reduced by the amount needed to reach the 40 percent spending requirement. It would categorically exclude from funding those facilities not subject to 70/40 requirements.

The need for funding would be determined by calculating the number of annual hours that a facility would need to add to meet the staffing requirements (i.e., 1.1 hours per resident day of Registered Nurse (RN)/Licensed Practical Nurse (LPN) time, 2.2 hours of Aide time, and a total of 3.5 hours per day of total nursing time). Annual hours would be computed using quarterly average hours per resident day based on PBJ data from the fourth quarter of a given year, increased to represent 12 months. Facility costs would be calculated using Bureau of Labor Statistics (BLS) hourly wage data. DOH proposes to use 2020 Q4 PBJ data and 2020 Residential Health Care Facility (RHCF) Cost Reports for calculating the 2022 funding need for each facility. The funding available for the year would be distributed proportionally based on that need.

It is important to note that the federal review process may result in changes to these provisions and that they are not final until federal approval is secured. However, we have some significant concerns about the approach that we are communicating to the Department and will keep members apprised. A copy of the filed SPA is available here.

Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841