Federal Long Term Care Staffing Mandates:  Impacts on Facilities Across the Country and in Alabama

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On May 10, 2024, the Centers for Medicare & Medicaid Services (CMS) published its controversial final rule imposing minimum staffing requirements for long term care facilities (the “Final Rule”)[1]. When it takes effect on June 21, 2024, the Final Rule will require minimum levels of nursing staff, including 24/7 on-site RN coverage and a 3.48-hour minimum of total nurse staffing per resident per day (HPRD), of which 0.55 hours must be provided by RNs and 2.45 hours provided by nurse aides, or CNAs. Facilities may provide the remaining 0.48 hours with a combination of nursing staff (RNs, licensed practical nurses, licensed vocational nurses, or nurse aides). The Final Rule also expands requirements for facilities to conduct staffing assessments. Urban facilities will have three years to fully comply with the new Final Rule, and rural facilities will have five years to comply.[2]

Nationwide impact

Using PBJ nurse staffing data from October to December 2023, the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) estimates that only 6% of nursing homes currently meet all of the requirements imposed by the Final Rule.[3] While almost 60% of facilities currently provide at least 3.48 HPRD, half of facilities cannot meet the 0.55 RN HPRD requirement, and 70% cannot meet the 2.45 HPRD nurse aide requirement at current staffing levels.[4] Eighty percent of facilities nationwide will have to hire more RNs to meet the 24/7 RN requirement, including 92% of rural facilities.[5] Facilities serving mostly Medicaid beneficiaries are less likely to meet the HPRD requirements, as are small facilities and facilities in rural areas.[6]

Overall, nursing homes will need to hire nearly 102,000 additional nurses and nurse aides to comply with the mandate, including more than 77,000 CNAs and nearly 24,000 RNs.[7] AHCA/NCAL estimates the cost facilities will incur to hire these additional caregivers at $6.5 billion per year, based on annual facility per FTE costs from 2022 and 2023 Medicare Cost Reports.[8]

CMS estimates the total annual cost at $4.38 billion in year three when the mandate is fully implemented and acknowledged in comments to the Final Rule that industry estimates ranged from $4 billion to $7.1 billion annually.[9] In its impact analysis, CMS predicts that facilities will have three possible approaches to address the increased costs associated with the staffing mandates: (1) reduce profit margins; (2) reduce other operational costs; and (3) increase prices charged to payors.[10] If all additional staffing costs were passed along to payors, CMS estimates that Medicaid would be expected to pay about two-thirds of those costs, with Medicare paying 11% and other payers bearing the remaining 22%. Importantly, however, CMS acknowledges that its cost estimates assume that facilities and not payors will bear the costs of the mandate.[11]

Comments published in the Final Rule expressed concern about system-wide impacts, including potential reductions in admissions and census, closures, and the impact of those scenarios on residents and families.[12] AHCA/NCAL estimates that nearly one-quarter (290,000) of residents would be at risk of displacement, should facilities elect to reduce daily census to meet the new requirements. [13] In response to these concerns, CMS states that it will use available data for monitoring residents' health and safety, as well as any unintended consequences, during the multi-year implementation of the Final Rule.[14]

Impact on Alabama facilities

Using Q4 2023 PBJ data, AHCA/NCAL estimates that only 13% of Alabama facilities will meet the 24/7 RN requirement of the Final Rule; 48% will meet the 0.55 RN HPRD requirement; 51% will meet the 2.45 CAN requirement; and 70% will meet the 3.49 total HPRD requirement. [15] It further predicts an annual cost of $61.1 million for Alabama facilities to meet all of the requirements, which will necessitate hiring an additional 712 CNAs and 306 RNs across the state. [16] Of that cost, the required increase in CNAs will cost $31.5 million annually. Additional RNs to meet the 0.55 HPRD and 24/7 RN requirement will cost $28.8 million annually.[17] A total of 3,555 residents of Alabama’s 20,761 average daily census are at risk of displacement if Alabama facilities reduce census to meet the new mandates.[18]

Responses to the Mandate

The Final Rule has been criticized by industry groups and Members of Congress as a one-size-fits-all requirement that ignores the current nursing home workforce crisis and threatens access to care.[19] At the time the Rule was proposed in September 2023, Brandon Farmer, President and CEO of the Alabama Nursing Home Association (ANHA), warned that the mandate could unnecessarily strain Alabama facilities as they work to recover from the COVID-19 pandemic and staffing shortages.[20] “The pool in the universe of applicants to draw from has shrunk since COVID, the pandemic, and then you’re competing with other health care providers along the continuum, hospitals, private physician offices,” Farmer explained.[21] The ANHA has worked with the Alabama Legislature and the state’s Board of Nursing to train more nurses by creating grant programs to support LPN training at community colleges as well as apprenticeship opportunities.[22]

CMS announced that it is developing a $75 million national staffing campaign to increase the number of nurses in nursing homes by providing financial incentives for nurses to work in nursing homes.[23] The agency has not yet announced any specifics about this program. In the meantime, legislation has been introduced in both houses of Congress to prohibit the U.S. Department of Health and Human Services (HHS) from implementing or enforcing the staffing requirements.[24]

If you need assistance navigating nursing home surveys or another other long-term care or post-acute care issue, please reach out to Maynard Nexsen.

_{[1] CMS, Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting, 89 FR 40876 (May 10, 2024).
[2] For more information about the Final Rule, hardship exceptions and industry response, see Maynard Nexsen Newsroom, “Federal Long Term Care Staffing Mandates: Key Requirements, Compliance Dates, Hardship Exceptions, and Ongoing Controversy” (May 7, 2024).
[3] AHCA/NCAL, Staffing Mandate Analysis.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] 89 FR 40949-40950.
[10] 89 FR 40949.
[11] Id.
[12] 89 FR 40887.
[13] AHCA/NCAL, Staffing Mandate Analysis.
[14] 89 FR 40988.
[15] AHCA/NCAL, Staffing Mandate Analysis.
[16] Id.
[17] Id.
[18] Id.
[19] AHCA/NCAL, ICYMI: Strong Bipartisan Opposition Results From Biden Administration Finalizing Federal Minimum Staffing Mandate For Nursing Homes (April 24, 2024).
[20] WSFA 12, Alabama association pushes back on Biden nursing home staffing level mandate, (Sept. 6, 2023).
[21] Id.
[22] Id.
[23] CMS, Biden-Harris Administration Takes Historic Action to Increase Access to Quality Care, and Support to Families and Care Workers (April 22, 2024).
[24] See S.3410 - Protecting Rural Seniors’ Access to Care Act (Introduced Dec. 5, 2023); H.R.7513 - Protecting America’s Seniors’ Access to Care Act (Introduced Mar. 1, 2024).}