The nursing home industry says chronic understaffing and inadequate Medicaid reimbursements could lead to closures if the proposed federal minimum staffing standards become law.

“The fundamental problem is the staff are not there,” said Stephen Hanse, president and CEO of NYS Health Facilities Association, which represents nursing homes in the state.

But advocates, economists, and academics said the nursing home crisis is the result of poor pay and working conditions for demanding jobs.

“It’s completely absurd to think there’s some kind of worker shortage,” said Monique Morrissey, an economist for the Economic Policy Institute, which has published several reports on nursing home care.

Morrissey said nurse aides are paid on a similar scale to fast-food workers, and registered nurses are paid less than their peers working in hospitals. In addition, most workers are women, with about one-third minorities, making a median hourly pay of $15.22. And union contracts cover fewer than 10% of employees in the industry.

“But this is particularly acute for nurse aides, many of whom live at or below poverty or just above poverty, most of whom don’t have good benefits, including healthcare benefits, which is tragic given that they’re working in healthcare,” she said.

If there is any middle ground, it is that everyone agrees the industry will have to hire more workers and put more of its revenues toward direct care of nursing home residents.

The COVID-19 pandemic exposed how nursing home residents were put at risk, while some facilities operated without enough workers. More than 200,000 nursing home residents died during the pandemic.

As a result, the Biden administration proposed these minimum staffing standards:

• A registered nurse on site 24 hours a day, seven days a week.
• Registered nurses must provide 33 minutes of care per resident per day.
• Nurse aides must provide 2 hours and 27 minutes of care per resident per day.

Put another way, the proposal requires 3 hours of direct care for patients each day by registered nurses and nurse aides.

The estimated cost over 10 years for the federal proposal is $40.6 billion, almost all of which will be covered by nursing homes unless they increase their own rates. But the industry believes the true costs could be as much as $10 billion each year.

A bipartisan contingency of almost 100 federal lawmakers wrote the Biden administration on Oct. 20 to express “significant concerns” about the proposed rule, arguing it could lead to “widespread nursing home closures.”

“Instead of moving forward with a regulatory mandate that would exacerbate staffing shortages, the Centers for Medicare and Medicaid Services should collaborate and work alongside nursing homes across the country to find innovative solutions to improve the provision of care for seniors and other vulnerable populations,” lawmakers said in the letter.

Richard Mollot, executive director for the Long Term Care Community Coalition, said the federal proposal falls short of what independent studies have recommended.

“We are encouraging people to comment and speak out and say you need to go back to square one,” Mollot said. “The average nursing home resident needs 4.1 hours of nursing staff time. What CMS is proposing is 3 hours of nursing staff time, so, that is quite alarming.”

The Centers for Medicare & Medicaid Services said the staffing standards would increase staffing in more than 75% of nursing homes and exceed those in most states. New York’s minimum staffing standard passed in 2022 requires nursing homes to provide 3.5 hours of care per resident per day by nursing aides, licensed practical nurses (LPNs) and registered nurses.

Many share a big concern that the federal proposal excludes minimum staffing standards for LPNs.

Morrissey disagreed with a CMS-sponsored study claim that LPNs care did not show any improvement in health and safety outcomes. Rather, care should improve if nursing homes are properly using LPNs.

“If you hire a lot of LPNs and you’re reducing RNs, you might not see improvement of care,” she said. “But if you’re hiring LPNs to work with RNs, it definitely contributes to good care.”

Brian McGarry, assistant professor at the University of Rochester’s Department of Medicine, said LPNs are integral elements of a strong nursing home workforce.

“I think it’s really a blind spot in this policy that it only incentivizes facilities to employ CNAs and RNs and really leaves out a big chunk of this workforce,” McGarry said.

In addition, the Biden-Harris Nursing Home Reform initiative proposes that states report the percentage of Medicaid payments spent on compensation for direct care workers and support staff.

McGarry said staffing levels at most nursing homes are too low. Common complaints about the nursing home industry are that large corporate entities have multiple limited liability companies, which makes it difficult to track how operators spend Medicaid funds.

“I think we also need to increase transparency and the ability to sort of track where dollars are going and how those are being spent in ensuring that those dollars are actually being put into patient care,” McGarry said.

If such a tracking system were in place, McGarry said states should consider investing more into nursing home care and quality.

“The sense that we need to invest more in nursing homes and in long-term care is accurate,” McGarry said.

Hanse said New York has disinvested in the nursing home industry, which has made it even more difficult for operators to make ends meet.

“I see right now significant issues,” Hanse said.

“The only sector of healthcare on the healthcare continuum that is still below pre-pandemic 2019 employment levels are nursing homes,” Hanse said. “And it is extremely difficult, and it really goes hand in hand with a failed [Medicaid] reimbursement system.”

Hanse said New York has historically underpaid nursing home Medicaid reimbursements. Although the state budget included up to a 7.5% increase, Hanse said nursing homes still get the short end of the stick.

“So, the 7.5% doesn’t even make up for inflation,” he said. “New York needs to continue to invest in nursing homes so we can spend that money and attract and retain a solid workforce as we go into the future.”

Numerous studies have shown how staffing levels closely correlate with the quality of care provided to nursing home residents.

But enforcement has been a big problem for some states, including in New York, Mollot said.

“And in order for it to be effective, it has to be monitored,” Mollot said. “And there has to be penalties involved to make it meaningful.”

The federal standard proposes enforcement, including termination of provider agreements, denial of Medicaid/Medicare payments, and civil penalties.

Morrissey said enforcement efforts should be aggressive or the industry is unlikely to respond by improving resident care.

“And a lot of nursing homes just basically say that they’d rather pay the fines or just gamble that they’re not even going to get caught at it,” she said.

The commenting period for the federal proposal closes Nov. 6. To review the proposal and comment, click here.