New York’s Medicaid Crisis Is Crushing Nursing Homes – And It’s Time for State Leaders to Act
Nursing homes across New York State are sounding the alarm — and Albany isn’t listening. The latest evidence? The independent review board, the Public Health and Health Planning Council (PHHPC), who is responsible for approving the purchase and sales of nursing homes, recently denied applications for three nursing homes in Johnstown, Plattsburgh, and Hoosick. Their reason? Inadequate Medicaid reimbursement rates set by the state.
These denials aren’t just bureaucratic footnotes. They’re flashing red warning lights. When governmental bodies themselves cite Medicaid underfunding as the reason for blocking new ownership or investment in nursing homes, it’s clear: we are in the middle of a full-blown public health crisis.
The nursing homes in question were seeking routine regulatory approval for ownership changes—applications that in normal times would have faced little opposition or questions. Instead, PHHPC members openly acknowledged what providers have been saying for years: that New York’s Medicaid reimbursement rates fall short of covering the real cost of care. And while this acknowledgment is appreciated, it begs the obvious question—when will the state finally fix the problem?
Right now, the average nursing home in Upstate New York is losing $1.8 million every year. This causes a huge crisis for facilities trying to stay open, hire and retain staff, and provide quality care to some of the most vulnerable members of our communities. Many nursing homes are being forced to reduce admissions, shutter units, or close entirely.
It’s important to understand what’s really at stake here. Medicaid isn’t a fringe payer. It is the primary source of funding for most nursing homes in New York. And yet, the rates it pays haven’t kept pace with inflation, rising healthcare costs, or the urgent workforce shortages that plague the sector—especially in upstate communities. Upstate facilities are losing more money annually on average than Downstate because they are not receiving an appropriate reimbursement rate.
The New York Providers Alliance (NYPA) has long advocated for a reassessment of Medicaid reimbursement rates. These recent denials by PHHPC only highlight the urgency of that call. If the state’s own health council won’t approve nursing home applications because the funding model is broken, then Governor Hochul and the State Legislature must act—immediately and decisively.
The consequences of inaction are too great. If we force nursing homes to continue operating at a loss, we’re not just risking the closure of individual facilities—we’re jeopardizing the entire infrastructure of elder care in New York. Rural and underserved areas will be hit hardest, deepening already stark health disparities. Hospitals are experiencing strain, with emergency rooms facing significant backlogs. A lack of available beds in nursing homes is preventing the discharge of ER patients, further amplifying the issue.
New York has the ability—and the responsibility—to finally adjust its Medicaid rates to ensure they reflect the real cost of care. That means accounting for inflation, acknowledging regional cost differences, and giving providers the resources they need to deliver compassionate, dignified care. And that’s the real reform that matters.
Our state cannot continue to ignore this crisis. The PHHPC has made it clear: without adequate Medicaid funding, the future of nursing homes is in jeopardy. It’s time for Albany to listen and to lead.
Keith Chambery is the executive director of New York Providers Alliance and the Genesee Health Facilities Association
