Group of nursing home providers sue New York State over Medicaid formula

Nearly three dozen nursing homes have joined forces in a lawsuit against the state of New York over claims that they have been shortchanged Medicaid funds, according to a New York Daily News report.

“The lawsuit against the state Health Department, filed recently in Albany Supreme Court, seeks to throw out a change in the Medicaid funding formula enacted earlier this year that cuts this year’s money—and recoups payouts from the past two years,” the New York Daily News reported.

A change to the state’s Medicaid formula enacted in 2011 was retroactive to April 2009, meaning some nursing homes must now repay the funds collected “under the former, more generous formula,” according to the report. New York has been collecting those repayments by deducting funds from 2011 Medicaid payouts.

A spokesperson for New York’s Health Department told the New York Daily News that the Medicaid changes were instituted only after consulting with providers on a funding system that was fair for all types of nursing homes.

Legal counsel representing the group of providers was quoted saying that some nursing homes would eventually need to close if the policy remains unchanged and that the state must develop “something that’s fair to everybody and gives the proper reimbursement.”