There is no law that expressly states bed rails are never to be used. Indeed the purpose of bed rails are to prevent patients from falling out of bed. You do not indicate the reason that your aunt is having a hard time. She should speak with the Nursing Home Administrator and insist on an unequivocal reason for the refusal to use the bedrails in your grandmother's case. That will dicate what the next step, if any, should be taken should the excuse given not be a reasonable or appropriate one, including but not limited to filing a complaint with the appropriate state agency.
I would think that is a standard of care/quality of care issue. You should check with a New York Attorney or the New York State Department of Health. Attached is a link to to reach the complaint hotline.
Please know that this answer is being provided to you in response to the limited information contained in your submission and should be considered for informational and/or educational purposes only. This response does not establish any attorney client privilege or relationship between you and me, as a responding attorney, and my post certainly does not attempt to counsel you on any of the pertinent legal facts and/or implications concerning your issue. To fully investigate and determine your legal rights, should you so choose, I recommend that you promptly consult with an attorney of your choosing as time may be of the essence.