New York Judge Blocks Funding Cuts to State Nursing Homes

New York nursing homes breathed a sigh of relief last week when a New York Supreme Court judge stopped the state from cutting Medicaid reimbursement funds to facilities across the state. Speaking on behalf of the nursing home industry, Ami Schnauber of LeadingAge New York told McKnight’s Long-Term Care News that the ruling is a “big relief” for its members across the state. The ruling comes after the New York Department of Health revamped its formula for determining Medicaid reimbursement rates. According to state officials, the new rates create a “more fair and accurate picture of [the needs of] nursing home patients.” 

The nursing home industry disagrees and says the state is trying to plug an unrelated budget shortfall by cutting necessary funding to the 80,000 New Yorkers who rely on Medicaid to pay for their nursing homes. While the health department says it does “not expect this change to result in any disruption to nursing home residents and the care they receive,” the nursing home industry disagreed and sued the state. In their arguments before Supreme Court Justice Kimberly O’Connor, the nursing homes said the $246 million cuts would cause “irreparable harm” to nursing home patients and force short-staffed nursing homes to lay off even more workers

Acting Supreme Court Justice Kimberly O’Connor appears to agree with the nursing homes and granted a preliminary injunction last week, temporarily stopping the cuts from taking effect. Justice O’Connor found numerous flaws with the policies and procedures followed by the New York Department of Health. Among other problems identified by the Court, the Supreme Court Justice found that the Department of Health “retroactively” applying its new formula for nursing homes and its blatant violation of union contracts negotiated by the state particularly problematic. The New York agency also failed to educate nursing homes or allow for the industry to review the proposals and provide input while they were being formulated, a violation of state law.  

LeadingAge New York, who filed the lawsuit, argued the state has not described the proposed changes or why they are being implemented in the first place. While sympathetic to budget shortfalls and the rise in Medicaid spending across New York, the nonprofit representing nursing homes said, “We recognize the state is facing a Medicaid deficit. That deficit is not a consequence of nursing home spending.”

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