'A cry for help': NY health panel urges nursing home help in state budget

And a new bill would create a state securities whistleblower program.

Good afternoon — it’s Friday and National Exercise Day.

In today’s CapCon:

• Members of a state public health panel say lawmakers have two choices: raise Medicaid rates for nursing homes or accept that more will close.

• Health plans have their own Medicaid request for the Legislature that they say could help insulate the impact of federal funding cuts.

• A new bill would mirror a federal whistleblower program at the state level by offering a share of the funds recovered through an enforcement action.

• What’s up at the Capitol next week.

• Eyes & Ears: Catch up on what you might’ve missed this week.

Names in today’s CapCon: Kathy Hochul, Jeffrey A. Kraut, Scott P. La Rue, John Rugge, Michael Gianaris, Eric Linzer, Mark Walczyk, Jenifer Rajkumar

---

The state budget was due April 1. We’re keeping you updated on negotiations around the spending plan in the meantime.

Advocates have pushed for higher Medicaid rates (Lori Van Buren/Times Union)

🗣️ Public health panel says Medicaid rates are driving nursing home closures

It probably won’t surprise you to learn that health care facilities, including hospitals and nursing homes, want the state to increase Medicaid reimbursement rates.

New York’s rates cover about 75% of the cost of care in nursing homes on average, according to LeadingAge New York, which advocates for nonprofit long-term care facilities. Those homes have to eat the rest of that cost.

Gov. Kathy Hochul and lawmakers have taken steps to increase Medicaid rates across the board in recent years but, with historic underfunding and the rise of inflation, that hasn’t saved the industry from collapse.

Many nursing homes can’t break even, forcing them into an unsustainable cycle of cost over care. At some point, cost wins.

That’s forced nursing homes to either sell to for-profit companies to survive or close altogether. At least a dozen nursing homes have closed in New York since 2021.

When the ownership of a nursing home is transferred to another entity, that transaction has to be approved by an obscure state entity called the Public Health and Health Planning Council — pronounced like “fih-pick” to industry insiders.

The council is usually more of a rubber stamp on those requests than an overseer. It’s the same with hospitals that seek approval to merge with another health care system.

But in their most recent meeting a few days ago, members of the council pushed back on three applications for changes in ownership and ultimately rejected them, saying they were stuck between a rock and a hard place.

“I would say this is either a cry for help, but we're in a no-win situation,” said Jeffrey A. Kraut, chair of the council and the executive vice president of strategy at Northwell Health. “No attention is being paid from the Legislature as best as I could see.”