Image of male nurse pushing senior woman in a wheelchair in nursing facility

New York providers are challenging a state effort that could cost operators $246 million in funding and cause dramatic “upheaval” to care and services for nursing home residents.

A coalition of more than 100 state and regional nursing homes filed a lawsuit Thursday against the state’s Department of Health and officials in State Supreme Court in Albany County. The coalition includes LeadingAge New York and the New York State Health Facilities Association. 

The suit challenges the state’s proposed change to the way it calculates reimbursement rates for long-term care facilities. The state is seeking to change the methodology it uses to calculate case-mix index adjustments, which sets Medicaid reimbursement rates for skilled nursing facilities.

“These changes are arbitrary, capricious, contrary to law, and should be enjoined before they cause dramatic care and services upheaval and resident disruption,” the coalition wrote in court documents.

Providers allege this change means the state is effectively cutting Medicaid by an average of $11.47 per resident per day, or $246 million per year statewide. The cuts are scheduled to be implemented Nov. 6 and be made retroactive to July 1, 2019, according to documents. 

“A cut of this magnitude will directly jeopardize access to quality resident care,” said James Clyne Jr., president of LeadingAge New York. 

Providers are seeking a preliminary injunction against the proposed changes. They have argued that the state adopted the changes without getting approval from the Centers for Medicare & Medicaid Services and without considering recommendations from industry stakeholders. 

They also said state officials disregarded a mandatory circuit-breaker designed to protect providers and residents from dramatic rate cuts and altered data analysis to make their rate adjustments.

The cuts could cause nursing homes to close, lose programs and threaten current staffing levels and wages, they added. 

“It is my sincere hope that the court in this matter will put a stop to the state’s devastating cuts and protect nursing home residents, providers and their staff throughout New York,” said Stephen Hanse, president and CEO of the New York State Health Facilities Association.