Amid accelerating nursing home closures in upstate New York, nonprofit providers are hoping new legislation will help them cut costs and make care delivery more efficient.

State lawmakers passed the so-called CINERGY bill in June, but it was just delivered to Gov. Kathy Hochul (D) Thursday. She must sign it within 10 days to deliver providers in five upstate regions better ability to collaborate on efforts “to improve nursing home efficiency, staffing and quality of care.”

While nonprofit partnerships are already common, LeadingAge New York President and CEO Sebrina told McKnight’s Long-Term Care News that the legislation would help them to coordinate more formally and avoid charges of collusion or anticompetitive practices.

Resource sharing and cost savings are critical for providers in the state, where Barrett said 41 nursing homes have closed since 2014, including eight in 2024 and 2025. All but one of the most recent closures were upstate, and another 15 nonprofit closures or sales to for-profit entities are expected soon, she added. Half of those are also upstate.

“We’re seeing situations where it’s a very real possibility that closures happen and leave no not-for-profit options in a community,” Barrett said. Lawmakers “really recognize how drastic the situation is for NHs in their communities and the desperate financial conditions of nursing homes. I think they’re trying everything they can to help keep the nursing home doors open.”

While the state budget added $160 million in new Medicaid funding this year, the state’s Department of Health also slashed capital expenditure funding for nearly 100 nursing homes. Many had already started projects and now owe money the state won’t repay them, Barrett said.

The CINERGY (Collaborative to Improve Nursing Home Efficiency, Reduce Avoidable Hospitalizations, Guarantee Access, and Yield Area-Wide Performance Improvement) bill doesn’t commit any additional state funding. But it gives nonprofit and publicly owned facilities more leeway to develop financial solutions, such as sharing back office support staff, seeking group rates when purchasing supplies, or even outsourcing services such as laundry to each other. 

Those are things that for-profit chains often do across their footprint or through related parties, which smaller nonprofits don’t typically benefit from. 

“It’s allowing them to be creative and innovative and find some ways to save money, to partner together to help each other out,” Barrett said. “They’ll come up with a plan where they can share resources and work together. That plan will then go to the Department of Health for approval to ensure there are no antitrust issues.”

Barrett said the bill could lead to other financial opportunities ahead, though it does not as written. A similar CINERGY collaborative downstate provides $30M in supplemental Medicaid funding to about 40 non-profit participants, who are required to track and report various quality metrics and collaborate on ensuring access for patients being discharged from hospitals.

“It will allow our nonprofit nursing homes the ability to collaborate and encourage them to hit quality metrics for an opportunity in the future for increased reimbursement rates,”  state Sen. Samra Brouk (D) told local media late last month.