Federal Staffing Minimums Could Cost the Nursing Home Industry $10B

Establishing minimum staffing requirements at the federal level, like what the White House proposed back in February, may require nursing home providers to spend billions of dollars each year to hire tens of thousands of additional staff.

That’s according to a new report from accounting and consulting firm CliftonLarsonAllen (CLA) in concert with the American Health Care Association (AHCA).

The analysis specifically modeled the impact that implementing a staffing minimum of 4.1 hours per resident day (HRPD) could have on the industry, in addition to 3.6 HRPD and 3.1 HRPD.

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4.1 HRPD is used as an example most frequently as it was brought up during a 2001 study evaluating nursing home staffing levels.

Of the 14,550 facilities analyzed using Payroll Based Journal (PBJ) data from Q4 2021, only 6% meet the 4.1 HRPD requirement — compared to 13% who meet the 3.6 HRPD and 27% meeting the 3.1 HRPD.

It would cost $10 billion a year and require hiring more than 187,000 certified nursing assistants (CNAs), licensed practical nurses (LPNs) and registered nurses (RNs) to meet the 4.1 standard, according to the CLA data.

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The “multi-faceted” approach to proposing a minimum staffing ratio includes stakeholder commentary tied to the SNF Prospective Payment System (PPS), a study and listening sessions to be held in August, according to the Centers for Medicare & Medicaid Services (CMS).

CMS is expected to issue a proposed staffing minimum one year after President Biden’s State of the Union address, officials have said.

AHCA President and CEO Mark Parkinson said the report highlights the need for “substantial and consistent” financial resources from the federal government should staffing standards be increased at the national level.

“Even then, nursing homes would have the impossible task of finding another 187,000 nurses at a time when vacant positions sit open without applicants for months on end,” Parkinson said in a news release. “The unintended consequences of this sort of unfunded mandate would be devastating to hundreds of thousands of vulnerable residents who could be forced out of their nursing home.”

Meeting the proposed staffing minimums will require many facilities to make difficult decisions like reducing or limiting census growth, CLA Principal Deb Emerson said in the news release.

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