CMS' Staffing Proposal Will Cost Nursing Homes $6.8B for 102K Nurse Hires, Industry Backed Report Finds

Fierce Healthcare | By Dave Muoio

Meeting the Biden administration’s minimum staffing proposals for nursing homes would require facilities nationwide to hire more than 102,000 additional nurses at a cost of $6.8 billion, well above the government’s $4 billion estimate, according to a report released Tuesday by an industry group. 
 
“That is money that is simply not out there,” Mark Parkinson, president and CEO of the American Health Care Association (AHCA) and its sister organization the National Center for Assisted Living, said during a press event Tuesday. “Even at the administration’s number of $4 billion—that’s almost $400,000 per nursing facility, and nursing facilities just don’t have that money. They will not be able to implement this proposal.”
 
Earlier this month, the Centers for Medicare & Medicaid Services (CMS) floated a plan to require participating nursing homes to provide a minimum of 0.55 hours of care from a registered nurse per resident per day, 2.45 hours of care from a nurse aide per resident per day and have at least one registered nurse on-site at all times.
 
The proposal was widely panned by AHCA and other industry groups, which said that many of their facilities are financially underwater and already struggling to find workers. Healthcare labor costs have increased in recent years due in part to the low, but somewhat improving, supply of clinical workers. 
 
The new analysis—conducted on behalf of AHCA by professional services firm CliftonLarsonAllen (CLA)—sought to measure the gap between current nursing home’s current staffing and the burden full compliance would require using “more up-to-date” 2022 cost reports that reflect rising wage growth, Cory Rutledge, chief assurance officer at CLA, told reporters.
 
To date, 94% of nursing homes are falling short of at least one of CMS’ proposed staffing requirements while 36% are falling short of all three requirements, according to the report.
 
While about 60% of nursing homes nationwide are already in the red, Rutledge noted that the compliance burden would be heavier among the facilities more reliant on government funds. On average, facilities that currently fall short of all three requirements counted 56% of their total patient days from Medicaid patients, whereas those that did meet the criteria had a 43% Medicaid census.
 
Nursing homes’ alternative to more hires would be to trim down the number of residents they’re caring for. In a hypothetical where nursing homes collectively took this route, CLA found that more than 287,000 nursing home residents, or about 26% of the national total, would be impacted.

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