Nursing homes are suing to stop New York from restricting their profits, one of the state’s cornerstones measures to take action against the drawn-out care industry right after the COVID-19 pandemic.
The lawsuit, documented Wednesday in U.S. District Court and signed by north of 250 nursing homes across the state, asks a government judge to pronounce the state’s nursing home benefit cap law unconstitutional.
“This law was done away from public scrutiny, without the contribution of providers, and is unfavorable, actually, to the people who work in nursing homes,” said Stephen Hanse, president and CEO of the New York State Health Facilities Association, one of several nursing home campaigning groups associated with the suit. “It has the possibility to close nursing homes the manner in which it contrarily impacts nursing homes that are great but struggling monetarily.“
The benefit cap was included in the 2021 state budget passed by lawmakers in April and is set to produce results on New Year’s Day. It mandates nursing homes put basically 70% of revenue toward direct care of residents, including essentially 40% toward paying direct care staff. It also limits nursing home profits to something like 5%.
Proposed by then-Gov. Andrew Cuomo, it was one of the state’s major legislative responses to the deaths of north of 15,000 nursing home residents to COVID-19. A report by state Attorney General Letitia James found some revenue driven nursing homes redirected cash to related parties rather than investing in staff and personal defensive equipment during the pandemic.
Nursing homes campaigning groups have undermined prosecution over the benefit cap for quite a long time. Michael Balboni, executive director of the Greater New York Health Care Facilities Association, told WBFO last month he anticipated that a filing should occur in December.
The lawsuit recorded Wednesday names New York State Health Commissioner Dr. Mary Bassett as the litigant. Bassett, who took office recently, would be accountable for authorizing the benefit cap.
A spokesperson for the state Department of Health says it does not remark on forthcoming suit.
The lawsuit makes several arguments as to why the benefit cap supposedly violates the U.S. Constitution or is otherwise invalid.
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