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A law that would incentivize reductions in the use of temporary staffing agencies in nursing homes awaits action by Governor Hochul, who must either sign or veto the law by December 23.

[UPDATE: Gov. Hochul signed this bill into law (S.6897/A.7328) on December 22. The Governor’s press release can be found here.]

The law would create a four-year “demonstration project” which is intended to promote a more long-term nursing home workforce.  To accomplish this, the law would amend Public Health Law section 2828, a 2022 law that imposes penalties on nursing homes that violate minimum spending requirements for direct resident care and staffing.

If the new law is signed in its current form, a facility that limits its use of resident-facing temporary agency staff to 10 percent or less of its total staffing hours during the last quarter of 2023 (and 9 percent or less in 2024) could exclude its non-Medicaid operating revenue for purposes of the minimum spending requirements. In addition, the revised law would reduce penalties for violating minimum spending requirements if certain conditions are met. For example, eligible facilities that reduce their use of agency staff “by at least 30 percent during any year in which such remittance or amounts owed to the state are payable” would be permitted to keep half the amount they would otherwise be required to remit. Temporary staffing levels would be measured using facility reported Payroll Based Journal (PBJ) data.

The law received widespread support in the legislature. Whether or not the law is signed by the Governor this year, the concerns that the amendment seeks to address will remain for the foreseeable future as operators continue to grapple with pervasive staffing shortages and expensive temporary staffing agencies.

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