Ninety-two New York nursing homes are suing the state’s Department of Health (DOH) and its commissioner, alleging that recent cuts to capital funding violate their equal protection rights. The lawsuit, filed in the US District Court for New York’s Northern District, claims that the DOH’s decision to end funding in 2025 for capital expenditures at older facilities is unconstitutional.
These facilities, representing over 15% of New York’s nursing homes, rely on state funding for essential maintenance, including repairs to HVAC systems, roofs, elevators, and more. The lawsuit argues that an April amendment to Public Health Law § 2808, which slashed capital reimbursement by 10% to save the state $50 million, unfairly targets older facilities.
“This decision puts an undue burden on facilities that are already struggling to maintain aging infrastructure,” says David Grabowski, a professor of health care policy at Harvard Medical School. “Without adequate funding for capital improvements, these nursing homes may be forced to defer critical maintenance, potentially compromising resident safety and quality of life.”
The plaintiffs contend that the DOH’s actions lack a rational basis, as newer facilities are not subject to the same funding restrictions. They seek an end to what they call “unequal and irrational treatment” and demand a process to ensure that reimbursement rates adequately cover necessary capital costs.
This lawsuit comes on the heels of another legal battle between New York nursing homes and the state over the controversial “70/40” spending requirement. In June, a New York Supreme Court judge dismissed a lawsuit challenging the constitutionality of this law, which mandates that nursing homes spend 70% of revenue on patient care, with 40% of that dedicated to staffing.
Industry experts warn that these ongoing disputes could have serious consequences for New York’s elderly population. A 2023 report by the Center for Healthcare Quality and Payment Reform found that nearly 20% of New York nursing homes are operating at a financial loss, and further funding cuts could exacerbate this crisis.
“It’s crucial that the state and nursing home providers find a way to work together to ensure the long-term financial stability of the sector,” says Stephen Hanse, president and CEO of the NYS Health Facilities Association. “Without adequate funding for both operating and capital expenses, we risk a decline in the quality of care for our most vulnerable residents.”
The outcome of this lawsuit remains uncertain, but it highlights the growing tension between New York’s nursing homes and state regulators. As the population ages and the demand for long-term care services increases, finding a sustainable funding solution will be essential to ensure the well-being of New York’s elderly citizens.