An Overdue New Federal Rule to Improve Nursing Home Staffing

By James C. Sherlock

What would happen if the federal government were to propose for the first time specific nursing home staffing minimums?

We are about to find out.

A new rule.  A new federal proposed rule introduced yesterday has already survived fierce opposition from the industry, which tried to kill it in the womb.  They are not done opposing, but the administration seems to have its course set.

And the new rule is clearly within the letter and spirit of the Social Security Act that requires safe, quality care.

The new proposed federal rule consists of three core staffing proposals:

  1. minimum nurse staffing standards of 0.55 hours per resident day (HPRD) for Registered Nurses (RNs) and 2.45 HPRD for Nurse Aides (NAs);
  2. a requirement to have an RN onsite 24 hours a day, seven days a week (currently 8 hours a day); and
  3. enhanced facility assessment requirements.

While the final rule minimums will be phased in over a three-year period, five for rural facilities, they would, if in force today, render non-compliant 245 of the 281 Virginia nursing homes that are rated for staffing by CMS.

There are also groundbreaking provisions for transparency on the percentage of Medicare and Medicaid payments spent on direct care staff, not just for nursing homes but also for community and home care.

The new proposed rule is potentially a great improvement for prospective patients coming out of the hospital to recuperate and rehabilitate or entering long term care.

Which includes a lot of very vulnerable Virginians.

Virginia’s nursing homes, as I have reported for years, are disproportionately understaffed compared to those in the rest of the country.  Dramatically so.  We know that because the (CMS) forces nursing homes to report staffing checked against their payrolls.

For the General Assembly, the new federal regulations will effectively trash the nursing home staffing law they passed so infamously and nearly unanimously this year and the Governor signed.  Good riddance.

Virginia’s state regulators wear both federal and state hats.   Federal law and regulations take precedence.

The feds have never before put hard numbers on staffing requirements.  That they now finally will do so offers opportunity and a new mandate to:

  • the Department of Medical Assistance Services (DMAS), Virginia Medicaid);
  • the Virginia Department of Health’s (VDH) Office of Licensure and Inspection (OLC), Virginia’s federally-mandated state survey authority that conducts federal inspections under federal rules for CMS, which pays OLC to do them;
  • the Virginia Department of Behavioral Health and Developmental Services (DBHDS); and
  • other departments within the state Health and Human Resources Secretariat.

They “must” – that term is in the federal regulations – when the rule is final step up more forcefully under their codified federal authorities and responsibilities, unconflicted by weaker Virginia laws and regulations.

I personally trust the current leadership and staffs of those agencies to do it well.

Workforce expansion.  It will take work to fill the expanded workforce requirements.

  • Virginia will have to train and educate more RNs.  Programs to attract people to that career must be examined;
  • The community colleges and the nursing home chains will need to train more nurses aides;
  • The jobs need to be made less chaotic, more doable, more attractive.  No one has to work in a nursing home.  The new rule won’t produce better nursing home staffing everywhere until the working environments in some of the worst ones improve, which in turn requires government enforcement; and
  • To help nurses be more efficient and effective on the job.

More money.  For the industry in Virginia, and thus for the General Assembly, it is a lightening bolt.

The Virginia Health Care Association (VHCA) will lobby the General Assembly for increased payments from Medicaid.  The American Health Care Association will lobby Congress for Medicare payment increases.  In both cases the hospital lobby will back them.

Both will likely get most of what they want.

Bad actors.  There are plenty of scofflaws among the owners of Virginia’s nursing homes.  They are attracted to Virginia for a number of reasons, none good.

Warren Buffet once said of high risk investors everywhere that we find out as the tide goes out who has been swimming without bathing suits.  But then we already know.

Centers for Medicare & Medicaid Services (CMS) publishes the data.

Medicaid payment transparency.  In a very meaningful change:

The proposed rule includes provisions that are intended to promote public transparency related to the percentage of Medicaid payments for services in nursing facilities and intermediate care facilities for individuals with intellectual disabilities that are spent on compensation to direct care workers and support staff.

The Medicaid institutional payment transparency reporting provisions, if adopted as proposed, would … require, among other things, that states report to CMS and publicly on the percentage of Medicaid payments for certain home and community-based services that are spent on compensation for direct care workers. [Emphasis added.]

That is a huge deal.  You can see why.  A new way to identify unclad swimmers.

Enforcement. These new minimums will only matter if enforced.  Strong sanctions for non-compliance must be levied.  And they must be more painful to owners than the current practice of fines, small relative to the costs of nurses, that can be factored into business models.  The sanctions need to include a credible threat of new patient denials.

Then there are the ultimate sanctions of receivership or loss of license to operate. Those sanctions are available now and have been for decades.  But they have never been levied in Virginia.

COPN.  Virginia’s Certificate of Public Need (COPN) law, as with hospitals and medical imagery machines, protects nursing home incumbents from competition.

COPN protection is one of the things, along with the exceptionally high occupancy rates it drives, an anti-regulation General Assembly captured by the industry and historically weak enforcement, which together attract bad actors to invest their money in nursing homes here.

Bottom line.  CMS for the Biden administration is doing a very good thing.  The new proposed rule is long overdue.  Like any rule, it depends upon enforcement.

But there are opportunities there, not just in training additional nurses and nurses aides, but also in technology insertion to reduce the requirement for higher numbers of nurses by making those already there more efficient and effective on the job and increase job satisfaction at the same time.

Both the government and the industry will benefit from that result, a rare alignment of interests and thus motivations.

There is an opportunity, if we will seize it, for Virginia to be a leader in this effort.  We have the right team in place in the Youngkin administration to make that happen.

More on a possible technology initiative next time.