State budget pits nursing homes against hospitals in fight for dollars

ALBANY — Nursing homes across New York, especially on Long Island, are making a last-minute push for a funding boost from the state to hire more workers.

Nursing home officials say they need to fill about 850 jobs just on the Island to meet their bare minimum staffing needs. But they are facing competition from within the health care world: the powerful hospital lobby.

"Staffing is very hard," said Sebrina Barrett, CEO of LeadingAge New York, which represents nonprofit nursing homes and other types of adult care homes across the state.

"Fifty percent of Long Island [nonprofit] nursing homes are operating at a deficit, so it is hard to go out and compete for the staff they need," Barrett said.

At stake is a 10-figure pot of money for hospitals and nursing homes being hashed out by Gov. Kathy Hochul and the State Senate and Assembly to help New York providers in the wake of federal health care spending cuts carried out by President Donald Trump.

Hochul proposed a special $1.5 billion Medicaid earmark specifically to address the cuts while the Assembly has endorsed spending $2.4 billion. The Senate also supports spending increases on health care but through different funds.

Competition for funds

The rub is that neither branch of government has outlined how the money should be divided.

Pending lawmakers' decisions, the hospital lobby has said it should get two-thirds of the pot because hospitals essentially account for two-thirds of the Medicaid spending. It also says the Trump budget bill targets hospitals, not nursing homes directly.

"This is very simple," said Kenneth Raske, CEO of the Greater New York Hospital Association, one of the biggest spending and most influential lobby groups at the state Capitol.

"Ultimately, there has to be a distribution based on the impact of [Trump’s budget]," Raske said. He contends that hospitals will lose about $8 billion of federal aid over three years "and that’s not true of nursing homes."

He added: "I represent nursing homes too, and we’re proud of it. But I know what’s fair."

Nursing homes tell lawmakers it should be 50-50 because skilled nursing facilities have endured huge staff losses since the pandemic while hospitals have added staff. At the same time, Trump has rescinded federal requirements for staffing, a move some in the industry say will put safety at risk.

Staffing levels

Even critics of the state’s Medicaid spending agree with the staffing analysis.

Hospital employment in the state since the pandemic has grown from about 390,000 to 412,00, a gain of 22,000, according to the Empire Center, a fiscally conservative think tank that analyzes state and federal spending.

Nursing home employment dropped from about 121,000 to 104,000.

"They are in a shrinking mode while hospitals are in a growing mode," William Hammond, an Empire Center fellow, said.

He questioned the need for boosting Medicaid spending, noting that New York already has the highest-in-the-nation spending rate on Medicaid and that enrollment in the program has declined since the pandemic.

Hochul has proposed a roughly 11%, or $4 billion, increase for Medicaid spending overall; Hochul's proposed $1.5 billion earmark for hospitals and nursing homes is a subset. The governor has said it is needed to offset federal reductions. The Democrat-led Senate and Assembly have signaled they generally agree with her.

'We feel justified'

The governor and lawmakers are trying to finish negotiations on a $260 billion state budget, which was due April 1. Sources said legislators want to give at least the $1.5 billion Hochul proposed. It’s not clear, however, how the money would be sorted.

Long Island nursing homes need to add the equivalent of 600 full-time registered nurses, licensed practical nurses and certified nurse aides to meet staffing requirements, LeadingAge says. But because just 70% of nursing home nurses work full-time, practically speaking to add 600 full-time equivalents means about 850 actual workers.

"We feel justified asking for half of those Medicaid monies," said Stuart Almer, CEO of Commack-based Gurwin Healthcare System. He said government reimbursement rates for Medicaid haven’t kept up with cost trends and some nonprofits nursing homes have closed. Certified nurse aides, especially for home care, are the biggest need right now, he said.

"Hospitals are in a hiring mode ... we know we can never compete with hospitals on salaries," Gurwin said. State aid would help industry staffing, he said, adding: "We’re in a high turnover business."

By Yancey Roy

yancey.roy@newsday.com@yanceyroy