Minimum Staffing Rule Will Cost Nursing Homes $11.3B/Year

The American Health Care Association (AHCA) has increased its estimates of what a staffing minimum of 4.1 hours of nursing care per resident day would cost nursing home operators and how many nurses would be needed to meet the mandate proposed by the Biden Administration last month.

AHCA now says that it will cost nursing home operators $11.3B annually to meet the proposed staffing minimum and require an additional 191,000 nurses and nurse aides to provide the 4.1 hours of care per resident each day.

In July, the association estimated the annual cost at $10B and the new nursing staff at 187K. AHCA said it is revising the estimates upward due to increased labor costs and persistent nationwide workforce shortages of nurses.

AHCA’s new report was prepared in tandem with accounting and consulting firm CliftonLarsonAllen (CLA), who also wrote the group’s July report. A statement that accompanied the update made it clear that the trade association stands in opposition to the Biden Administration’s proposed minimum staffing requirement.

“This report once again highlights how our nation’s policymakers should be investing in our long-term caregivers, not mandating quotas,” said Mark Parkinson, CEO of ACHA.

“Nursing homes have been doing everything they can to recruit and retain staff—including increasing wages—but it has not been enough to stem the time. If Washington wants to increase staffing in nursing homes, then they need to put their money where their mouth is,” Parkinson said.

Despite increasing occupancy levels at nursing homes, a separate CLA report found that nearly 60% of skilled nursing facilities currently are operating with negative margins.

“The additional burden of meeting minimum staffing requirements with no funding mechanism will potentially increase the number of facilities operating with negative margins,” said Deb Emerson, principal of CLA, in a statement.

According to the updated AHCA report, 94% of the nation’s 15.500 nursing homes currently would be unable to comply with a 4.1-hours-per-resident-day standard of care due to inadequate staffing.

The updated report also said that up to 450,000 nursing home residents could be at risk of displacement if skilled nursing facilities that are unable to scale up their staffing and therefore may need to reduce the number of residents.

The Biden Administration is preparing to impose minimum staffing requirements on nursing homes next year, the Washington Post reported last month. Health and Human Services Secretary Xavier Becerra told the newspaper the Administration is acting in response to the catastrophic impact of the pandemic on nursing homes—an estimated 160,000 nursing home residents died from COVID-19, as well as 2,700 staff members.

Becerra did not indicate which minimum staffing level will be enacted, but the Administration is expected to follow recommendations made in a 2001 report produced by the Centers for Medicare and Medicaid Services, the agency that regulates the nursing home industry.

The agency recommended in the 2001 report that nursing homes should deliver at least 4.1 hours of nursing care to every resident each day, the equivalent of one nurse for every seven residents on day and evening shifts.

Several attempts have been made to impose the recommendation—most recently in 2016 under the Obama Administration—but each time a fierce lobbying effort by the industry beat them back.

According to the Government Accountability Office, only about a third of the nursing homes in the US were meeting the 4.1-hour care threshold before the pandemic started. The shortage of nurses—which existed before the pandemic and deepened during it as many nurses joined The Great Resignation—has significantly lowered that number.