Industry Critics Blast ‘Tremendously Unfunded’ CMS Nursing Home Staffing Mandate, Warn of Severe Access Issues

As the nursing home industry finally gets a first look at the long-awaited proposed minimum staffing mandate released early Friday, leaders across the sector say that its most critical aspects deal with implementation timing, a “good faith” provision, and requirements for registered nurses (RNs).

As it stands, the proposed rule has major implications for access issues with about 294,000 nursing home residents at risk of displacement across the sector, according to audit, tax and consulting firm CliftonLarsonAllen (CLA), while operators and nursing home advocates say it is grossly underfunded. This, while the industry still struggles with staffing shortages and as caregiver numbers slowly inch up toward pre-pandemic levels, as highlighted by the federal government’s latest jobs report, also released Friday.

The proposal calls for Medicare- and Medicaid-certified nursing homes to provide a staffing equivalent of 3 hours per resident per day (PRPD), with 0.55 hours of care from registered nurses (RNs) and 2.45 hours of care from nurse aides. Non-rural nursing homes will have 3 years and rural nursing homes have 5 years to meet these standards. The rules also call for facilities to have an RN on staff 24 hours a day, daily.


From here, the Centers for Medicare & Medicaid Services (CMS) will open up a 60-day comment period, which is bound to garner a lot of feedback from the sector. One such counterpoint will likely pertain to the 24/7 RN requirement, one that will take time to implement, according to Rick Matros, CEO of Sabra Health Care REIT (Nasdaq: SBRA), a real estate investment trust (REIT) that is among the largest owners of nursing homes in the United States.

“It typically takes CMS 12 to 18 months to implement, and then you’ve got three to five year phase-ins for the general rule, and a two to three year phase-in on the RN [provision]. You’re really looking at 2027, 2028, which gives the industry a lot of time to recover,” said Matros. “The fact that there’s this much time is really critical.”

Other industry insiders also lauded the period CMS has allotted for phasing in the proposal as about the only upside in it.


“I appreciate it. It’s good to see that CMS recognizes the significant labor shortfalls that are in rural communities throughout our nation,” said Stephen Hanse, president and CEO with the New York State Health Facilities Association and New York State Center for Assisted Living (NYSHFA/NYSCAL). “So while it’s important that the draft regulations provide that phase in, it is critical to have these because it takes time to recruit and retain staff.”

And that’s where the good news ends for the sector, experts believe. The proposed mandate will likely have unintended consequences and will ultimately prove to be more harmful than helpful, contributing to a worsening of access to nursing homes, according to CLA chief assurance officer Cory Rutledge.

Consumer advocacy organizations and other experts in the sector, however, lauded CMS for moving forward with a mandate and called for even more robust requirements, with a faster implementation timelines.

“Many of us have been calling for this for this for decades,” David Grabowski, a professor at Harvard Medical School who has been a leading nursing home researcher and has served on the Medicare Payment Advisory Commission (MedPAC), told SNN. “This was long overdue, and it is a good start. However, I do believe the staffing requirements seem relatively modest, there will be too many exemptions, and the rollout is somewhat slow.”

Compounding mandates cause headaches, confusion

Access to skilled nursing facilities (SNFs) has been exacerbated by a shortage of workers, especially in rural communities.

Steven Tack, CEO of Quality Life Services based in Western Pennsylvania where the organization runs 10 SNFs in rural counties, told Skilled Nursing News (SNN) that his organization is already dealing with the negative fallout from the state staffing mandate. And so the federal mandate will just add insult to injury if nursing homes are forced to abide by the conditions of both the federal and state mandates.

In attempts to meet Pennsylvania’s minimum staffing mandate – which at 3.7 PRPD is stricter than its proposed federal counterpart – Tack’s organization has been grappling with employing expensive agency workers along with licensed practical nurses (LPNs).

Pennsylvania requires a certain level of LPNs in its staffing ratio, Tack said, while the role was conspicuously absent from the proposed federal mandate.

“We could be at [3.0] plus our Pennsylvania LPN ratios, which could take our minimums to 3.6, 3.7, 3.8 and we’re already having a shortage,” Tack said of the compounding mandates. He plans on seeking more insight from local policymakers, he said.

Zach Shamberg, president and CEO of the Pennsylvania Health Care Association (PHCA), said the proposal creates a “dumpster fire” for providers in states that have already implemented higher staffing standards and ratios – with different roles included.

“We are particularly surprised that CMS has devalued the role of [LPNs] … Pennsylvania employs nearly 12,000 LPNs. Our state ratios include this position, but because this position is not unionized in all states, we suspect that that is why CMS and the Biden administration are not mandating it,” said Shamberg. “The same goes with therapists, social workers and other caregivers that CMS doesn’t value because they don’t count these essential workers toward the hours of care provided each and every day.”

Hanse was similarly surprised that LPNs were not included in the federal proposal. New York is another state with an existing staffing minimum mandate, which also includes the role in its calculation.

Even toned down, staffing mandate comes at hefty cost

Only 19% of SNFs would be able to meet mandate requirements, Rutledge said, while 81% would not. About 98,000 additional nursing FTEs would be required, a cost today of $6.6 billion.

“That price would continue to increase annually because of inflation and projected nursing shortages into the future,” Rutledge said. “Absent the money and labor availability, the only other mechanism that one could leverage to meet the staffing mandate is to remove residents to get up to the 3.0 hours per patient day.”

CLA’s analysis suggests approximately 294,000 of the country’s most frail adults would be displaced from SNFs in order to meet the staffing minimum mandate.

“We all know that there’s no plan outlining what to do with those 294,000 frail older adults who depend on skilled SNFs for their basic daily care. Nor is there any plan for the ongoing access issues that would plague our society for the foreseeable future under the mandate,” said Rutledge.

Even CMS’ own unintentionally released study on the staffing mandate predicted a staffing minimum of 3.88 hours per patient per day would cost $5.3 billion per year.

Hanse considers the cost, and lack of support, to be another major flaw.

“It is a tremendously unfunded mandate in that by their own estimates, CMS projects its draft proposal to cost providers $4.1 billion a year,” he added.

The Biden administration will launch a national effort to bolster nursing home staffing, including allocating $75 million for initiatives such as scholarships and tuition reimbursement programs.

In its statement, the American Health Care Association still called the proposed mandate “unfunded,” despite the $75 million federal boost.

“I don’t even know what kind of analogy to use, it’s so meaningless,” added Matros; the actual cost for supporting the mandate easily dips into billions of dollars, according to past reports.

Simply put, the funding would not move the needle in the long run, Rutledge said. From a practical standpoint, he said he would also call it an unfunded mandate, compared to the $6.6 billion needed in the sector to meet the staffing proposal.

“$75 million simply won’t cover it. Moreover, the impact of that $75 million won’t be seen for years. The $6.6 billion – that’s true when the mandate takes place,” said Rutledge.

Still, it is “fairly unique” for CMS to pay for this type of training via the $75 million allocation, Grabowski pointed out, saying that he does think it “will help” nursing homes bolster their labor pools. And he would like to see a more rapid implementation of the mandate.

“I would love to see this policy implemented within the next 12-18 months,” Grabowski said in an email to Skilled Nursing News. “There is no reason to wait that long. All of the workforce issues present today will be present [in three to five years]. Let’s start taking on this problem as soon as possible.”

Leaders with the National Association of Health Care Assistants (NAHCA) agreed three years is “way too much time,” and that the proposed phase-in period suggests neither CMS nor the providers have considered the CNA or resident voices.

Given demographics and a decline in supply that’s due to continue, however, Matros is optimistic the industry will exceed pre-Covid occupancy levels by the time proposed staffing levels are phased in. The timing allows for more recovery on the labor front, and for workforce initiatives to strengthen the workforce pipeline, he said.

The nursing and residential care facility sector saw a 17,000 increase in jobs for the month of August, according to a report released by the Bureau of Labor Statistics on Friday. Skilled nursing facilities specifically saw an 8,900 increase between July and August, BLS reported.

Mandate focuses on 24/7 RN care

The proposal requires an RN to be on-site at facilities around the clock, while care assessment requirements also will be tightened. Under the current rules, if a care issue occurs at say 9 p.m. on a Wednesday, there doesn’t need to be an RN on site, said Grabowski.

Now, an RN will need to be at the facility at all times to help manage care. Licensed practical nurses (LPNs) were conspicuously absent from the rule.

This is one of the most concerning aspects of the proposed mandate – there just aren’t that many RNs available, Matros said. Facilities won’t be able to lean on LPNs when RNs aren’t available like in the past.

Matros expects the RN requirement to be the main topic among commenters during the 60-day period.

“I was surprised that the initial proposal places requirements on the number of RNs and CNAs but ignores LPNs,” said Grabowski. “I am worried that this will introduce an unintended consequence in that nursing homes will lower overall staffing in response to this requirement.”

No mention of LPNs in the mandate could lead to lower overall staffing in some facilities, he said, with nursing homes likely to substitute away from LPNs and toward CNAs.

Operators have been doing much of the same with LPNs and RNs, according to a study conducted in April 2021 and published in the Journal of Nursing Regulation, which found that LPNs were “pretty much interchangeable” with RNs, as the role is more cost effective.

Good faith provisions were a pleasant surprise

Operators would need to meet all of the following criteria to be exempt from proposed minimum standards: workers being unavailable, or a facility is at least 20 miles from another long-term care facility; demonstrating a good faith effort to hire and retain staff; providing documentation of a financial commitment to staffing.

Also, a facility would need to prove it has not failed in submitting PBJ data, is not a Special Focus Facility, has not been cited for widespread insufficient staffing resulting in resident harm, and has not been cited at the “immediate jeopardy” level of severity, with respect to insufficient staffing within 12 months preceding a survey where noncompliance is found.

“At least for me, I was less sure that we would get the good faith provision, so that’s a real positive,” Matros said of the exemption criteria.

Such provisions could be CMS’ way of counterbalancing the RN requirement, he said, but he still hopes the agency will offer more flexibility with LPN staffing, as well as more time to phase in the RN requirement.

“I would take double the phase-in period if we can get it, but that’s not going to happen,” he added.

(With additional reporting contributed by Zahida Siddiqi)

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