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Gov. Hochul postpones new law that caps nursing home profits at 5%

New York State Governor Kathy Hochul has postponed a controversial new law requiring nursing homes to boost spending on resident care and staffing while capping profits at 5%.

Hochul signed the order on Monday, January 31 that suspends the law through March 1, according to Albany Times-Union. The law passed in 2021 would require facilities to spend at least 70% of their annual gross revenue on resident care and 40% on staff who work directly with residents. It would also cap profits at 5%.


Nursing home facilities are suing over the new law. The lawsuit comes amid claims from two reports that facilities would have reported over $510 million in “excess” profits had the law been in effect in 2019. Those reports were based on financial information submitted by facilities in the lawsuit.

The law was passed in 2021 amid heavy scrutiny over COVID-19 deaths of tens of thousands of nursing home residents in New York.

A spokesperson for the state Department of Health said that while nursing homes were encouraged to comply with the law, they would not be penalized for failing to do so given the current staffing crisis.