‘Powerful Data’ Could Inform CMS’ Nursing Home Minimum Staffing Standards

As federal minimum staffing requirements loom for skilled nursing providers, analysts with the Medicare Payment Advisory Commission (MedPAC) unveiled crucial data detailing the effects of state-level standards on the industry.

While research found state minimum staffing requirements increased staffing levels and in some cases improved quality measures, there were some unintended consequences: a decrease in indirect staffing and skill mix, or the number of registered nurses (RNs) and licensed practical nurses (LPNs) relative to certified nursing assistants (CNAs).

Between the first quarter of 2019 and the fourth quarter of 2021, there was a six-minute decline in hours per resident day for CNAs, while RNs and LPNs saw a minimal increase in 2020 before returning to near pre-pandemic levels in 2021, according to MedPAC principal policy analyst Kathryn Linehan and research assistant Lauren Stubbs.

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The percentage of contract staff contributing to total hours per resident day nearly tripled from 3% in Q1 2019 to 8.4% in Q4 2021.

While multiple board members commented on the “powerful” data, others were unsure if MedPAC would be “positioned or capable” of drawing up their own suggestion for a minimum staffing requirement.

Instead, members hope the data will better inform CMS’ development of new standards where they are warranted.

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“This kind of information available from the PBJ data and additional analyses can provide context for sector-wide cost changes associated with reliance on more expensive contracted labor,” Stubbs told MedPAC board members.

Thirty-eight states and the District of Columbia have implemented stricter minimum staffing requirements than what exists at the federal level, according to Linehan and Stubbs – the Centers for Medicare & Medicaid Services (CMS) hasn’t changed federal staffing requirements since 1987.

Its last mandated report in 2016 found staffing level data was inaccurate; CASPER was the source of staffing data prior to the implementation of the payroll-based journal (PBJ).

While PBJ data is more accurate, it still has its limitations, MedPAC analysts said. One example scrutinizes workload intensity, which may have increased during the pandemic. In other words, patient acuity increased but the hours per resident day remained consistent.

Another limitation – data may not reflect all staff hours worked, as only paid hours are measured.

The therapy staffing data set and geriatric nurse practitioners aren’t included in this data either, the analysts said, and CMS suspended data collection in Q1 of 2020 due to the pandemic.

State breakdown

Other than implementing a minimum staffing standard, select states have implemented methods across the board to encourage higher staffing levels. Eleven states utilize wage pass-through policies, where nursing facilities must spend a portion of a Medicaid rate on staff compensation.

Thirty-two states, as well as D.C., use a cost-based payment policy, in which nursing facility Medicaid rates are directly tied to the costs of direct care.

Sixteen states went a value-based payment route; performance on a staffing measure increases payment to the facility.

While looking at state approaches to increasing staffing, one thing is clear: MedPAC and CMS cannot ignore state-level variation in its approach to staffing minimums, although it’s something normally left to the Medicaid-specific commission, according to Linehan.

MedPAC analysts and board members agreed that CMS could entertain state policy options for what is currently an unfunded federal mandate. Operators have long lamented the fact that the proposed Biden reforms, including a minimum staffing requirement, aren’t backed by federal dollars.

“I’m super excited that we’re doing this work,” said David Grabowski, MedPAC board member and Harvard University professor. “If you talk to individuals in nursing homes, all they want to talk about, all they do talk about, is staff right now. I’m glad we’re also talking about it. This is really important.”

Plugging away at a unified PPS

MedPAC also delved into a discussion around a unified prospective payment system for all post-acute care settings (PAC PPS) – efforts that first started as part of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, which called for uniform payment assessment items and quality measures.

Carol Carter, principal analyst for MedPAC, acknowledged a drastically changed landscape for SNFs and home health in particular, with PPS overhauls like the Patient-Driven Payment Model (PDPM) and increased costs of care associated with the pandemic.

Patient preference shifted during the pandemic as well, with more people avoiding nursing homes in the early months of Covid.

“While some of those changes will be temporary, others are likely to be permanent,” Carter said of Covid changes to staffing levels, provider costs and service provision.

MedPAC researchers began with a report issued in June 2016 on the matter, followed by another report in July 2022, this time prepared by Health & Human Services (HHS) Secretary Xavier Becerra.

A third report prepared by MedPAC is due in June of next year. Prior to that, researchers will conduct an analysis of Secretary Becerra’s prototype design in November of this year, draw up a draft report in March and conduct final discussions in April 2023.

Carter said features of a PAC PPS would need to be episode-based and have a base rate with the exception of a home health agency (HHA) adjuster.

Other payment adjusters include case mix, a targeted rural payment policy, adjustment for the timing of HHA stays, outlier policies for short stays and high-cost stays, and no inpatient rehabilitation facility (IRF) teaching adjustment.

“Beneficiaries who look similar in terms of their condition and comorbidities are treated in different settings … because Medicare uses separate payment systems for each setting, payments can differ substantially,” Carter told the MedPAC board. “In addition, there were shortcomings in home health and SNF PPS that encourages providers to furnish unnecessary rehabilitation therapy and to selectively admit certain types of patients over others.”

Grabowski pointed out that this was a more serious issue before PDPM was implemented, and thatPDPM is already more closely aligned with the unified model the commission is looking to achieve.

“We had this very narrow evaluation window and then the world completely changed … it was hard to really tell what was going on but it came online in the fourth quarter of 2019 and I think the results are important here,” Grabowski said of PDPM.

Some initial results, he said, were that therapy decreased dramatically and patient characteristics increased, perhaps a result of patient “upcoding,” or submitting for a more severe and expensive diagnosis or procedure than what was actually diagnosed or performed.

“The big takeaway here is, as we rely on coding from different post-acute care providers, let’s make certain that that is accurate … we have to rely on [hospital claims] telling us what the characteristics are; I’m very suspicious based on what’s happened in PDPM that we’re going to get back accurate information,” Grabowski said.

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