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Committee debates nursing-home reforms: 80% direct-care requirement and safeguards on private-equity ownership
Summary
Lawmakers debated two related proposals: a bill requiring nursing homes to spend at least 80% of revenue on direct patient care and legislation to impose financial safeguards and ban required arbitration for private-equity owners. Supporters pressed for protections against asset stripping and accountability; critics warned the measures could impose unintended constraints and urged rate increases instead.
Two high-profile bills addressing long-term care financing and ownership drew extended discussion in the Human Services Committee.
One bill would require nursing homes to spend no less than 80% of revenue on direct patient care. Senator Lesser said the bill spells out allowed costs and directs the commissioner of social services to oversee compliance; supporters argued the standard would ensure Medicaid and state funds flow to resident care rather than overhead or investor payouts. Senator Perlow, however, said the statutory definition of "direct care" as written may exclude necessary services such as laundry, dietary and housekeeping — services DSS counts as allowable Medicaid costs — and noted DSS opposes the bill for that reason.
A related measure would establish financial safeguards for nursing homes owned by private-equity companies, prohibit forced arbitration in certain cases and require greater transparency about ownership and asset transfers. Representative Meskers and others argued regulators need stronger tools to prevent the stripping of facility assets that could leave residents and the state exposed. Representative Kidd cited a local nursing-home closure after private-equity ownership and urged tighter oversight. Senator Anwar drew on research he described as showing higher mortality rates in private‑equity‑owned homes, saying, “the death rate is 11% higher” in those facilities, a claim members flagged for later verification.
Opponents cautioned against blanket restrictions on owners. Representative Case and other members said underfunding and inadequate Medicaid reimbursement are central drivers of facility distress and that higher reimbursement rates, not ownership bans, are the structural remedy. Several members asked that oversight be framed so that it holds owners accountable while preserving options to invest in facility infrastructure.
The committee advanced both measures to the floor and discussed follow-up work on definitions, auditing, certificates-of-need and coordinating with appropriations for rate implications.
What happens next: The bills move to the chamber floor for further consideration; committees expect additional technical work on definitions of direct care, asset-tracking, and how any oversight interacts with Medicaid reimbursement.
