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With the media assault on nursing homes and oft-told tales of patient neglect, nursing homes became subject to stringent federal standards with the passage of the Nursing Home Reform Act (NRA) of 1987. The law covers many aspects of resident care and rights, staffing, the quality of care, restraints, privacy, and record keeping. The law applies to all the various types of nursing homes who receive funds under Medicaid or Medicare programs.

The NRA sets standards for care, establishes a list of rights for residents, such as the right to be treated with dignity and to exercise self-determination, sets up a monitoring system for nursing homes, and specifies sanctions for non-compliance. Despite all this, critics say enforcement of the law has been inadequate.

In addition to federal law, states have enacted their own statutes on nursing home care and services. Some state laws are a beefed-up version of the federal law. Typically, the state laws require a nursing home to be licensed in order to operate, provides for annual inspections, sets up a procedure for handling complaints, prohibits discrimination, and imposes sanctions for violation, such as licensure suspension and revocation. Any reports of alleged abuse or violations are investigated by the state regulatory agency.