The new law also caps nursing home profits at 5 percent and requires owners to redirect any additional funds to the state’s nursing home “quality pool,” which rewards nursing homes providing high quality care.
The lawsuit alleges that the new requirements violate the U.S. Constitution as an improper “taking” of private property for public purposes and contradict the Supremacy Clause by confiscating Medicare funds. It also alleges “procedural missteps” in the implementation of the law.
The new requirements were part of a budget deal reached last spring over concerns of nursing home spending. A union representing the state’s nursing homes estimated the new requirements would lead to an additional $500 million spent on resident care.
