Nursing Homes are in Financial Crisis and are in Need of Help

by | Jan 10, 2023 | Brothers of Mercy

Nursing Homes are in Financial Crisis and are in Need of Help


There are approximately 614 nursing homes in New York State. I say approximately because nursing homes have been closing at an increasing rate, particularly those that are community-based nonprofits. If not closing, these facilities are forced to take vital beds offline or sell to private owners.

The end of 2022 marks 15 years since the state raised the daily Medicaid rate paid to nursing homes to account for inflation. Except for a meager 1% increase this year, it has been 15 years since the last “trend factor” was provided in 2008. Meanwhile, inflationary costs have risen by 42%. With Medicaid the predominant payer for care (about 75% of all resident days are paid by Medicaid), many nonprofit nursing homes are on the verge of financial collapse.

Our seniors deserve better. The financial hardships faced by nursing homes directly impact nursing home residents who depend on us for custodial care (e.g., bathing, dressing, eating) and skilled care. This crisis has resulted in a reduction of nursing home beds, the inability of hospitals to discharge to nursing homes, and for-profits purchasing not-for-profits, all of which instantly decrease the quality of care provided to residents.

Today, the shortfall between what it costs to provide care for one day to one resident and what we are paid by NYS exceeds $110. Action to increase Medicaid rates must be taken in 2023.

Unfortunately, New York has distinguished itself as being dead last, or, at best, second to last, in what it reimburses nursing homes compared to actual costs, according to studies comparing nursing home rates across states. It is one of very few states that does not update its rate regularly, even though the law requires periodic updates. The political will to prioritize care for our most vulnerably older adults is simply missing.

Adding insult to the financial injuries is the ongoing staffing crisis impacting all sectors of the healthcare delivery system. While this is impacting services at all levels, nursing homes are unable to compete for a quality workforce. Due to staffing limitations, the Brothers of Mercy is, for the first time in our history, leaving beds vacant. Statewide, over 6,700 beds are off-line for the same reason. This has a direct impact on hospital capacity – when hospitals cannot discharge patients who need nursing home services, there are no hospital beds for patients in urgent need of care.

Nursing homes from across the state are asking every legislator and the Governor to take notice of the damage caused by financial neglect and prioritize long term care in the next state budget by providing a 20% increase in the nursing home rate – which is still less than half the increase in costs we have absorbed over the past 15 years.