Staten Island Nursing Home Warns It Could Shut Down Without Higher Medicaid Rates — And It’s Taking New York to Court

Staten Island, N.Y. — Leaders of Silver Lake Specialized Care and Rehab Center say the Brighton Heights nursing home could be forced to shut its doors unless New York increases Medicaid reimbursement rates that they argue have not kept pace with the cost of care.

Michael Kraus, the facility’s administrator, said the 278-bed nursing home is under severe financial strain because Medicaid payments for many residents fall far below what it costs to deliver services. “We’re at the end of the road,” Kraus said. “That’s why we’re bringing a lawsuit. I’ve tried every avenue — gone to the state, appealed to the state.”

A lawsuit seeking higher rates and emergency relief
In January, the nursing home filed a lawsuit asking the state Department of Health to reassess its reimbursement rates, provide an emergency grant, and act on a separate grant application submitted in 2024 that the facility says remains unresolved.

Ventilator unit costs at the center of the dispute
Court filings argue Medicaid is Silver Lake’s primary revenue source and that its rates are among the lowest on Staten Island, with gaps of hundreds of dollars per day compared with other facilities listed by the state last year.

The complaint also points to how slowly rates have increased. In 2009, top Medicaid rates were about $211 per day for a regular unit and $549 for a ventilator unit. By 2025, those rates rose to roughly $292 and $576, respectively — figures the facility says still trail inflation-adjusted costs.

Kraus said ventilator care is the biggest pressure point, estimating it would cost about $750 per day out of pocket. “We’re getting reimbursed under 35 cents on the dollar,” he said. The lawsuit also says the for-profit facility has not posted a profit since 2008.

Quality penalties and the state’s response
Silver Lake is also challenging roughly $100,000 a year in penalties tied to New York’s Nursing Home Quality Initiative and argues the fines amount to an unconstitutional “excessive” punishment.

The state had not responded in court as of midweek. A Health Department spokesperson declined to comment on the litigation, but cited recent budget steps and Gov. Kathy Hochul’s proposed $1.5 billion Medicaid rate investment. Local lawmakers said they are working on options, including a proposed respiratory therapy demonstration program.