Federal prosecutors in Brooklyn are investigating a push by Gov. Andrew Cuomo's administration to enact broad protections for nursing homes from lawsuits and criminal prosecution early in the Covid-19 pandemic, according to people familiar with the matter.
Nursing homes were included in a provision giving liability immunity to doctors, hospitals and their executives, as well as healthcare workers on the front lines of the coronavirus outbreak last spring, surprising some lawmakers and healthcare officials. The provision's language originated in Mr. Cuomo's office and was presented to state lawmakers in final drafts of the state's $178 billion budget, according to lawmakers and legislative officials.
Federal prosecutors' examination of how nursing homes came to be included in the immunity law is part of a broader probe into the Cuomo's administration's actions regarding nursing homes during the Covid-19 pandemic. Investigators' interest in the immunity law was earlier reported by The City, a nonprofit news organization in New York.
Prosecutors are also examining the state's handling of nursing-home-death data, including a public report in July about factors that led the virus to spread in the facilities, The Wall Street Journal has previously reported.
The prosecutors have subpoenaed a range of information from the governor's office related to nursing homes, according to a person familiar with the subpoena.
State lawmakers have criticized the Cuomo administration for delaying the release of a fuller tally of nursing-home deaths. More than 15,000 nursing-home residents have died of Covid-19 in New York, state Health Department records show. Officials said the records were released as soon as their accuracy was confirmed.
A spokesman for the U.S. attorney's office in Brooklyn declined to comment.
Rich Azzopardi, a senior adviser to Mr. Cuomo, said New York was one of many states that also enacted forms of liability immunity for healthcare workers and facilities.
The nursing-home investigation has added to the pressure Mr. Cuomo faces from sexual-harassment allegations. Three former aides and a current employee in the Executive Chamber have accused the governor of sexual harassment or inappropriate behavior. State Attorney General Letitia James is overseeing an investigation into the allegations. Democrats and Republicans have called for Mr. Cuomo to resign or be impeached.
Mr. Cuomo has said he didn't touch anyone inappropriately and has apologized if his personal interactions with staff made anybody uncomfortable. He has said he would cooperate with the harassment probe.
"In order to fight this unprecedented pandemic, we had to realign our entire healthcare system using every type of facility to prepare for the surge, and in New York we recruited more than 96,000 volunteers -- 25,000 from out of state," Mr. Azzopardi said in a statement. "This was passed by 111 members of the Legislature and if we had not done this, these volunteers wouldn't have been accepted and we never would have had enough front-line healthcare workers."
In a January report, the New York state attorney general's office said the immunity provisions may have led some facilities to make financially motivated decisions. Financial incentives resulted in some for-profit owners pushing staff to admit more Covid-19 patients from hospitals to meet admissions goals, the report said.
"It was a license to kill," State Sen. Alessandra Biaggi, a Democrat from the Bronx, said of the immunity provision.
When Ms. Biaggi asked state Health Commissioner Howard Zucker about the immunity provision during a February budget hearing, Dr. Zucker said he found criticism "pretty offensive to all those who were working so hard on this pandemic."
"I do not believe that immunity that was put in there is going to cause someone to say, well, we'll just push for profit," Dr. Zucker said. "I ask you to remember the situation that we were in at that point in time."
Hospitals and nursing homes have said the immunity provided essential protection in the early months of the pandemic when they were forced to make good-faith decisions about allocating care and resources.
The immunity provision came together in late March 2020 during a surge in coronavirus patients, a shortage of ventilators and a lack of personal protective equipment. The state Health Department issued a March 25 directive that said no nursing home could refuse to admit residents who had been hospitalized solely because they tested positive for coronavirus, in a bid to preserve the number of hospital beds available during a healthcare crisis.
Nurses and doctors were protected from malpractice claims by Covid-19 patients with a March 23 executive order, but healthcare groups like the Greater New York Hospital Association and LeadingAge New York sought broader immunity in the budget. Mr. Cuomo was in close contact in March with hospital executives and GNYHA officials, according to the governor's official schedules.
The broader immunity provision that was enacted shielded nursing homes and hospitals from civil and criminal liability stemming from treatment of Covid-19 patients, and for harm to non-Covid-19 patients, provided services were rendered "in good faith."
GNYHA President Kenneth Raske wrote to his group's members on April 2 that the association had drafted and aggressively advocated for the legislation. But the hospital representatives, who were working directly with Mr. Cuomo's counsel and not legislative leaders, didn't ask for nursing homes to be included in the budget provision and were surprised to see them included in the final language, according to a person familiar with the matter.
Some nursing-home industry advocates were also surprised, said Michael Balboni, executive director of the Greater New York Health Care Facilities Association, a nursing-home trade group.
"We were almost in constant contact with the state and the state Health Department on a variety of issues," Mr. Balboni said. "This was not one of them."
James Clyne Jr., president of LeadingAge New York, an association of not-for-profit long-term-care providers, said his group contacted the governor's office and asked for liability protection after the governor released his March 23 executive order shielding doctors and nurses.
"We thought it was important for nursing homes to be included," Mr. Clyne said.
Top advisers to Democratic leaders of the New York state Assembly and Senate were first alerted to the immunity push by an email from Beth Garvey, a lawyer for Mr. Cuomo, according to a legislative official. The email was sent early in the morning of March 28 and made a broad reference to "health care immunity," the official said, and didn't include any potential legislative language.
The chairmen of the Assembly and Senate healthcare committees, Assemblyman Richard Gottfried and Sen. Gustavo Rivera, said the provision's wording was negotiated without their input.
Ms. Biaggi said she didn't learn of the immunity provision until April 1 -- the day by which a new state budget must be in place. A Senate official told legislators the provision came from Mr. Cuomo's office, she said.
In May, the Cuomo administration rescinded the March 25 directive requiring nursing homes to take previously hospitalized Covid-19 patients. The Health Department said in a July report that the policy was "not a significant factor in nursing home fatalities" and attributed the spread of the virus to staff who brought it inside the facilities.
In August, state lawmakers enacted a law that narrowed the immunity provision only to care that was provided for Covid-19.
--Rebecca Davis O'Brien and Jacob Gershman contributed to this article.