Biden Sets New Nursing Home Staffing Rules

The Biden Administration has announced it has adopted new minimum staffing rules for nursing homes. But the regulations appear to give facilities time to meet the requirements.

Separately, the Administration also is requiring that home care agencies allocate at least 80 percent of their Medicaid payments to staff compensation. States would have flexibility to adjust the rules for small and rural home care providers.

Nursing facilities that receive federal funding through Medicare and Medicaid (effectively all of them) will have to employ enough staff to provide at least 3.48 hours of daily care for each resident. That includes a minimum of 2.45 hours of nurse aide time and 0.55 hours of registered nurse assistance. The remaining staff time could be filled with RNs, aides, or licensed practical nurses (LPNs). Facilities also must have an RN on site 24 hours-a-day, seven days a week.

The White House says the new rule will require a facility with 100 residents to have at least two RNs and at least 10 nurse aides as well as two additional care staff per shift. Facilities caring for patients and residents with higher needs will be required to increase staffing beyond the minimums.

Exemptions

However, the new requirements will be phased in over several years, and facilities located in communities facing a shortage of direct care workers will be granted exemptions if they can show they made a good faith effort to hire staff. Facilities will be required to disclose any delays or waivers to consumers.

While the White House announced its decision to finalize the new rules on April 22, the specific regulations have not yet been made public. The Administration first proposed the standards last fall and has received tens of thousands of comments, both pro and con.

Operators that fail to meet the standards could lose Medicare and Medicaid funding, effectively putting them out of business.

How Many Will Meet The Standards?

The research organization KFF estimates that in 2023 the average nursing facility provided 3.77 daily staffing hours for each resident, a bit more than the new CMS rule. However, nurse aide time would need to be increased slightly to meet the requirements for those staffers. KFF found that 2023 staffing remained below 2020 levels, after dropping during the pandemic.

However, the averages appear to mask wide staffing variation among facilities. In a separate 2023 report, KFF estimated that about half of facilities would meet the RN requirement while only 28% would meet the new nursing aide standard. Overall, only about one-in-five nursing facilities would meet the combined minimum standards. The Centers for Medicare and Medicaid Services (CMS) estimates that about one-quarter of facilities currently would meet the minimum nursing requirement, including the onsite 24/7 rule.

The American Health Care Association, the trade group representing mostly for-profit nursing homes, says about nine in 10 facilities would fail to meet at least one of the staffing requirements. One-third of facilities would fail to meet all three standards.

The industry insists it cannot support the new staffing requirements with the payments it receives from Medicare and Medicaid. However, recent research suggests that many facilities use related-party transactions and other accounting gimmicks to low-ball reported profits. Thus, many likely can afford to hire more staff.

Some AHCA supporters in Congress have moved to block the rules while some consumer advocates have demanded a 4.1 hour minimum.

A Complicated Link

The Biden Administration explicitly links low staffing to low quality. In its fact sheet, the White House says, “too many nursing homes chronically understaff their facilities, leading to sub-standard or unsafe care.”

However, the story may be more complicated. Many researchers have concluded that that while low staffing levels may be associated with poor nursing home quality, they may not necessarily cause those problems. Rather, they may be a sort of canary in the coal mine, where facilities that skimp on nurses and aides also fail to meet other quality standards. For example, the facilities may be outdated, food may be inadequate or unhealthy, and quality of physical therapy poor.

In those facilities, operators may shift dollars away from other services to meet nurse and aide staffing minimums, or find other ways to game the new rules.

Similarly, staff turnover may be at least as important as staff size. A well-run facility with high-quality staff may be able to operate better than one that meets mandated staff size but with constant employee churn.

The new home care rules apply to Medicaid operators only. States, which set their own rules for Medicaid, will have to disclose what they pay for home care services and how they set those rates. They’ll also have to establish a rate-setting advisory panel that includes patients and families and direct care workers, though it is not clear how much authority those organizations would have.

The nursing home rules are a first attempt to set staffing standards for facility-based care. It will be important to see how they are implemented and whether they really do improve quality of the care.

Full disclosure: I serve as an unpaid board member of a non-profit senior living organization that operates nursing facilities.