Insights

On May 10, 2024, the Centers for Medicare & Medicaid Services (“CMS”) published a Final Rule that, for the first time, imposes national minimum nurse staffing requirements for nursing homes. Specifically, the standard adopted by CMS requires minimum staffing of 3.48 hours per resident day (“HPRD”), as discussed in more detail below. CMS estimates that the new requirements will cost facilities $43 billion over the next 10 years, which is more than the $40.6 billion cost that CMS estimated for Proposed Rule of 3.0 HPRD. Some industry sources estimate that less than 25% of nursing facilities across the country currently meet the full scope of staffing standards laid out in CMS’ Final Rule due to a myriad of factors including labor shortages and increasing wage pressures. Indeed, the impact and cost of these staffing requirements will vary significantly by state. For example, CMS reported that at least one state will need to increase certain staff by nearly 96% to meet the minimum standards, while other states already meet the requirements.

In the latest sign that federal enforcers remain focused on increasing antitrust enforcement, last Thursday, the Justice Department (DOJ), Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS) revealed an online portal, HealthyCompetition.gov, to encourage the public to submit reports on potential anticompetitive and monopolistic conduct in the healthcare sector.  The initiative seeks to address concerns that such behavior may affect healthcare affordability and quality, and employee wages. 

On September 1, 2023, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (“CMS”) issued a much anticipated and contested proposed rule that seeks to establish minimum staffing level requirements for nursing homes.  The proposed rule represents the first time the federal government has proposed comprehensive nationwide nursing home staffing requirements, although various states have already enacted their own staffing requirements.

On July 21, 2023, the Department of Health Care Access and Information of the California Health and Human Services Agency released a Notice of Proposed Rulemaking (the “Proposed Rule”) with regulations that would implement new financial and ownership transparency requirements for skilled nursing facilities (“SNFs”) in California.

An amendment to New York’s Certificate of Need (CON) law, set to go into effect on June 22, 2023, will require every CON application to include a “health equity impact assessment.”  The new law, N.Y. Public Health Law § 2802-b, requires an assessment be prepared by an independent entity that addresses whether, and if so how, “a project will improve access to hospital services and health care, health equity and reduction of health disparities.” The assessment must also make “particular reference to members of medically underserved groups, in the applicant’s service area.” Importantly, this new requirement does not apply to CON applications filed before June 22, 2023. To date, the Department of Health (DOH) has not yet issued implementing regulations.

On July 29, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies and rates for skilled nursing facilities (SNFs) and enacts changes to the SNF Quality Reporting Program and the SNF Value-Based Purchasing Program beginning in FY 2023.

On March 2, 2022, the Supreme Court of the State of New York for New York County dismissed the petition by the New York Attorney General (“NYAG”) for dissolution of the National Rifle Association of America (“NRA”), finding that the NYAG’s allegations of NRA leadership corruption, if proven, would not constitute public harm justifying the “corporate death penalty”. In August 2020, the NYAG filed a complaint against the NRA and four NRA officers, alleging that the officers had diverted millions of dollars for their personal benefit, among other misconduct. In addition to the noteworthy effort to dissolve the NRA itself, the NYAG’s complaint sought restitution and other monetary relief from the officers, as well as their removal from NRA employment and permanent injunctions against their serving other not-for-profit or charitable organizations in New York. The decision allows the case to move forward with respect to fourteen remaining claims against the NRA and its leaders.

On January 25, 2022, the Departments of Labor, Health and Human Services (“HHS”), and the Treasury (the “Tri-agencies”) released their 2022 annual report to Congress on the Mental Health Parity and Addiction Equity Act (“MHPAEA”).

The American Rescue Plan Act of 2021, or COVID-19 bill, was signed into law by President Biden on March 11, 2021.  It passed the U.S. House originally on February 27, 2021, by a vote of 219 to 212, was amended by and passed the U.S. Senate on March 6, 2021, by a vote of 50 to 49, and the amended and reconciled bill was passed by the U.S. House on March 10, 2021 by a vote of 220 to 211.  The 242-page bill provides a total of $1.9 trillion in economic stimulus related to the COVID-19 crisis and includes stimulus checks for Americans, renewed unemployment benefits, employment related provisions, tax related provisions, education related provisions, child benefits related provisions and provisions related to the COVID-19 pandemic at large and health care in general.  The purpose of this Client Alert is to provide a summary of the health care provisions of the new law.

On July 8, 2020, the New York Department of Financial Services published Proposed Insurance Regulation 218 (11 NYCRR Part 230) in the State Register. If finalized as proposed, the regulation would become amongst the most draconian mental health parity compliance regimes in the country. The proposed requirements impose significantly more stringent standards on New York fully-insured plans than the federal rules. Other provisions appear in conflict with longstanding federal standards for how regulators and plans evaluate compliance with the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The following examples are among the more burdensome requirements in the proposed regulation:

On April 23, 2020, Congress passed the Paycheck Protection and Health Care Enhancement Act, including additional funding for small businesses, health care providers, and testing. As described in greater detail below, the new package approves over $480 billion in total additional funding for programs addressed previously in the CARES Act. Another stimulus bill addressing the COVID-19 pandemic is anticipated in May.

On December 16, 2019, Governor Cuomo signed into law legislation amending the New York Public Health Law to add a new section (§2803-x) imposing significant reporting obligations on nursing home operators and increasing New York State Department of Health (DOH) oversight over various transactions involving nursing homes.

Connecticut Governor Ned Lamont signed into law on June 25, 2019 “An Act Concerning Paid Family and Medical Leave” (Act), that provides paid time off to new parents and caregivers, positioning Connecticut as the seventh state in the U.S. to provide paid family leave. Neighboring states, New York and New Jersey, already offer similar benefits. The Act creates a Family and Medical Leave Insurance (FMLI) program that provides wage replacement to workers covered under the State’s Family Medical Leave Act (CTFMLA), which it also amends. As amended, CTFMLA provides twelve (12) weeks of payments during any twelve (12)-month period of family and medical leave in connection with the birth, or placement with the employee for foster care or adoption, of a son or daughter of the employee, to care for a seriously ill family member, or to care for a person’s own serious illness. An additional two (2) weeks of payments is provided to a covered employee for a serious health condition resulting in incapacitation that occurs during a pregnancy. The FMLI wage-replacement program will be funded by a 0.5 percent payroll tax on each employee and self-employed individual enrolled in the program. The tax will go into effect on January 1, 2021. Covered employees will be eligible to receive benefits beginning January 1, 2022.

On December 21, 2018, Governor Cuomo signed into law Chapter 411 of the Laws of New York of 2018 amending Section 601 (Members) of the New York Not-for-Profit Corporation Law (NPCL). Effective July 1, 2019, Section 601(a) will increase the minimum number of individual members that a not-for-profit membership corporation is required to have from one to three. The scope of the provision is limited in various ways.

On December 7, 2018, Governor Cuomo signed into law, effective January 1, 2018, an amendment to New York Tax Law that negated, for New York State tax purposes, the effect of a 2017 change to the Internal Revenue Code relating to unrelated business income tax (UBIT) that disadvantaged many 501(c)(3) organizations. As part of the federal legislation commonly known as the Tax Cuts and Jobs Act of 2017 (TCJA), certain expenditures related to transportation benefits for employees, including transit and parking, were made nondeductible for federal income tax purposes. Most notably, certain kinds of free parking for employees were made nondeductible. Because section 501(c)(3) organizations do not ordinarily pay income tax, in order to apply the tax cost consistently to tax-exempt organizations as well as taxable businesses, the TCJA made these amounts subject to the UBIT for tax-exempts. See Internal Revenue Code section 512(a)(7). This change in the law came as a surprise to the nonprofit community, which has been advocating repeal of this tax increase. Section 501(c)(3) organizations objected both to the tax cost of this change to the law as well as the complexity of computing these amounts and complying with the new law. From the point of view of the nonprofit sector, this expansion of UBIT has diverted funding and put nonprofits at risk.