Nursing homes were emerging all over the country, but there were no federal standards for their design or operation. They were not licensed, buildings were unsafe, there were allegations of abuse and neglect, and nursing care was sometimes non-existent. Most states licensed hospitals, because the Hill-Burton Act required it, but few licensed nursing homes. The 1950 SSA amendments for the first time demanded that states that received federal matching funds must create systems to licensing both nursing homes and hospitals. This provision was added to "raise the standards of those institutions that have been understaffed and underfinanced, that have been firetraps, and in which people have been badly treated." Effective in 1953, "If a State plan for old-age assistance, aid to the blind, or aid to the permanently and totally disabled provides for payments to individuals in private or public institutions, the State must have a State authority to establish and maintain standards for such institutions."
The law did not specify minimum state licensure standards or procedures, nor was there any way to ensure that the states enforced the standards, but it was the first attempt to consistently regulate the industry at the state level. As a result, a number of nursing homes which couldn't meet the new standards closed in the 1950's, while others demolished their old buildings and built new ones.