LeadingAge CEO Calls Out Political Inaction on ‘Dangerously Broken’ Nursing Home Funding System

Decades-long underfunding of nursing homes continues to create unnecessary hardships for aging Americans as access issues deepen. And yet, attempts to change the current financial system have fallen on deaf ears.

In an effort to get the attention of lawmakers in Washington, LeadingAge President and CEO Katie Smith Sloan took aim with this view at the long-term care financing system in an editorial for The Hill on Monday, calling reimbursement “dangerously broken.”

It’s inevitable that residents and their families will experience first hand the country’s insufficient approach to financing long-term care with the nation’s rapidly aging population, she said.


“The question is: Will our leaders finally care enough to take action? If the past is prologue, the answer is a terrifying ‘no,” she said, pointing to a lack of progress on past federal legislation to revamp financing. She specifically noted inaction on the CLASS Act, a part of the Affordable Care Act, and the WISH Act, or Medicare Long-Term Care Services and Supports Act of 2018.

This is on top of stringent regulatory requirements from the Centers for Medicare & Medicaid Services (CMS), including the federal minimum staffing proposal released in September. Currently under review, federal regulators may take up to three years to finalize it as allowed by Medicare rules. This means a deadline of September 2026, according to the Fall 2023 Unified Agenda, posted on the website for the White House Office of Management and Budget.

CMS estimates a cost of $40.6 billion over 10 years for the proposed staffing rule and $147 million for the Medicaid institutional payment transparency reporting requirement, the latest Unified Agenda notes. The document also cites an estimated Medicare savings of $2.5 billion over 10 years due to fewer hospitalizations and emergency department visits, as well as increased resident discharges to home or the community.


That said, many operators and associations including LeadingAge say the proposed rule as written is unattainable considering the existing staffing shortage from the pandemic and little funding support.

The long-term care financing system will continue to fail residents unless financing is updated timely to reflect the rising cost of care, Smith Sloan also noted in her editorial.

In the meantime, operators have had to take matters into their own hands to meet increased expenses – and have frequently come up short.

To highlight the woefully inadequate funding to facilities, Smith Sloan noted the case of Rhode Island’s Linn Health & Rehabilitation, whose expenses have increased by close to 35% this year. The state’s reimbursement, meanwhile, has only gone up about 8%. To meet the funding shortfall, best efforts by residents at Linn raised a meager $2,000 through a bake sale, but funds failed to make a dent.

The Linn facility is losing $100,000 a month, with the cost of caring for a Medicaid-eligible resident hitting $411 per day, while it receives on average $255 per day per Medicaid resident, Smith Sloan noted.

Overall, Smith Sloan believes the country can do better to fund long-term care writing, “a comprehensive and equitable long-term care financing system would make all the difference.”

There’s enormous potential for funding changes, she added, and federal entities must seize such an opportunity, with the spaces still in the limelight.

“The solutions are complicated – but smart approaches abound. The variable is political will,” said Smith Sloan.

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