LeadingAge NY Challenges Nursing Home Capital Cut in Court

(April 22, 2025) LeadingAge NY and more than a dozen members filed suit in NYS Supreme Court last week, challenging the 10 percent cut in Medicaid reimbursement of capital costs imposed on nursing homes under the 2024-25 budget. The action seeks injunctive and declaratory relief annulling the State's imposition of the cut.

The association and its participating members allege that the cut violates the NYS Public Health Law, Title XIX of the Social Security Act, and the State and U.S. Constitutions. The petition notes that capital reimbursement is necessary to enable facilities to perform needed repairs, maintenance, and renovations that support the safety and quality of life of nursing home residents. In addition, nursing homes have incurred capital expenses in reliance on the State's approval of, and promise to reimburse, those costs, including long-term debt service obligations. Given that the state's nursing homes are already experiencing unsustainable losses, with 75 percent of not-for-profit homes experiencing negative operating margins, the capital cut is likely to exacerbate financial distress and shortages of nursing home beds.

LeadingAge NY will keep members updated on the progress of the lawsuit.

Contact: Karen Lipson, klipson@leadingageny.org