The volume of non-compliant fines quadrupled in the post-pandemic period between 2020 and 2022, with a staggering 36,370 such fines being issued to nursing homes, costing the industry a total of $560 million nationwide, according to the 2024 Marcum Three-Year Nursing Home Statistical Review.
The high cost to the sector from fines was despite the amount charged per fine being cut by more than half. Fines were roughly $33,127.44 pre-pandemic, dropping down to $15,417.13 per fine between 2020 and 2022.
In contrast, there were 8,510 fines issued between 2017 and 2019, resulting in $281 million in fines nationally.
“As providers face penalties for not meeting the mandate, will they turn away residents because there is not enough staffing to provide quality of care? Penalties have already increased drastically comparing pre-COVID to current years,” Marcum researchers said in the report.
Marcum LLP is one of the nation’s largest accounting and advisory firms. Its report dives into significant challenges and trends within the nursing home sector, including the controversial nursing home staffing proposal. Marcum also reports substantial strides in patient census with a 5.33% increase in occupancy for 2022.
Meanwhile, staffing costs soared and operators saw a stark rise in operational costs, as inflation reached double-digits in 2022 and wage inflation increased by 15.71% between 2020 and 2022. Marcum’s net cost report shows the operational loss per patient day increased by 16.78% in 2022.
Such challenges have led to a decline in the overall number of nursing homes, especially in the Northeast, and points to access issues down the line.
Lack of LPN expenses could help
Taking the staffing proposal into account, Marcum calculated a “what if” scenario where current licensed practical nurse (LPN) expenses were converted into registered nurse (RN) or certified nursing aide (CNA) expenses, a useful scenario considering the LPN role was conspicuously absent from the proposal.
Additional cost affiliated with the proposal’s staffing changes decreases from $5.1 billion to $4.1 billion if LPN expenses are divided up between RNs and CNAs.
There are two caveats here, however. Providers and nursing home associations suspect the Centers for Medicare & Medicaid Services (CMS) may still add LPNs to the rule, and in turn increase the mandated hours per resident per day. Also, Marcum’s estimation excludes the cost of onsite RNs as part of the 24/7 component of the proposal.
If fines are issued for not meeting the federal staffing proposal, more than 50% of the provider community would be affected. Currently, 40 out of 50 states are not in compliance with the proposal’s three hours per patient day, according to the report.
Moreover, in 14 states, more than 80% of providers don’t meet proposal requirements, researchers noted.
Volume of fines quadrupled
While the amount per fine decreased, according to the report, the volume of fines given quadrupled.
It’s a trend Skilled Nursing News has heard anecdotally from operators across the country.
Pre-pandemic, West Virginia had the highest amount per fine, with upwards of $90,000 charged, followed by Maryland with just under $80,000. Fines issued between 2020 and 2022 were highest in the District of Columbia, with just under $40,000 charged, while Michigan had the second highest cost per fine, with just over $30,000.
The total amount of fines by state had some notable spikes between 2020 and 2022, with Illinois issuing more than $60,000 fines total, followed by Texas at just over $50,000.
Interestingly, the number of fines as a percentage change between the pre-pandemic period of 2017 and 2019 and post-pandemic period of 2020 to 2022 was most notable in Nevada. The state saw a whopping 7000% change in the number of issued fines.
Nevada appears to be an outlier, with almost all other states falling under a 1000% change in the number of fines. The average percentage change in the number of fines issued was 327.38%, according to the report.
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