The contentious Nursing Home Minimum Staffing Rule, which establishes minimum staffing requirements for federally funded long-term care facilities (LTC) such as skilled nursing facilities (SNFs) for Medicare and nursing facilities (NFs) for Medicaid, has been finalized. The Rule was published on May 10, 2024, and became effective June 21, 2024. The Rule was proposed by the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) in September 2023 and received almost 47,000 public comments. The Rule received much attention and has been controversial, as many facilities find the requirements unattainable due to practical and financial challenges, which are further discussed below. This article will detail the HHS and CMS’s reasoning for the Rule’s proposal, the extensive requirements of the Rule, and the potential and expected consequences of the Rule.
The Nursing Home Minimum Staffing Rule comes as part of the Biden Administration’s long-awaited plan to “improve the safety and quality of care in federally funded nursing homes.” For example, on February 28, 2022, the Biden Administration released a Reform Plan that identified the following areas of improvement in LTCs.
The Reform Plan stated that its purpose was to ensure taxpayer dollars support LTCs that provide safe, adequate, and dignified care. The establishment of the Rule was part of the Reform Plan’s larger initiative to ensure adequate staffing and dignity as well as better quality care. In anticipation of potential other changes, under the Reform Plan, CMS is expected to explore ways to accelerate phasing out rooms with three or more residents and to promote single-occupancy rooms to protect patient privacy and dignity.
The Reform Plan stated that LTCs would face inspections more frequently and face harsher penalties for health and safety violations. According to the Reform Plan, Medicare and Medicaid surveys found that from 2013 to 2017, 82% of all inspected LTCs had an infection prevention and control deficiency. The Reform Plan also stated there needs to be an overhaul of CMS’s Special Focus Facility (SFF) program, which identifies poor-performing LTCs.
The Reform Plan also set forth aims for more transparency of quality of care and facility ownership so that residents and their loved ones could make informed decisions about care. Providing a sufficient number of staff, which eventually became part of the Rule, was part of this goal. The Reform Plan directed CMS to implement Affordable Care Act requirements with regards to transparency in corporate ownership of LTCs.
Subsequent to the Reform Plan, on April 18, 2023, President Biden issued Executive Order 14095, “Increasing Access to High-Quality Care and Supporting Caregivers,” which directed HHS to contemplate actions to effectuate his Reform Plan and consider negative impacts on safety and quality of care, including the reduction of nursing staff turnover. Shortly thereafter, HHS and CMS proposed the Rule in September 2023.
HHS and CMS finalized the Rule on May 10, 2024. According to the fact sheet that accompanied the Rule, the purposes of establishing minimum staffing standards are to improve working conditions and wages for LTC staff and to provide safer and higher quality of care to residents within LTCs. According to CMS, new studies and existing literature have shown that nurse staffing levels are closely correlated with the quality of care that LTC residents receive, as well as with improved health outcomes. These studies also showed that increased burnout and substandard safety and quality stem from chronic understaffing, especially of registered nurses (RNs) and nurse aides (NAs). Thus, the Rule aims to result increase safety and quality while reducing burnout and staff turnover.
Many commentators and media outlets felt that the Rule would never go into effect because the legislature would nullify the Rule. Considering the somewhat lengthy history surrounding the Rule, as well as the purposes behind it, there are doubts that the Rule will be nullified by legislative action. However, it is important to note that at least two lawsuits have been filed by numerous states challenging the validity of the rule and are arguing that CMS did not have the statutory authority to issue the Rule. At this stage, and with the elimination of the Chevron deference doctrine, it is impossible to determine whether the Rule will survive and it may take years to determine.
As a result, LTCs should not rely on the possibility that the Rule may get nullified any time soon and should begin to prepare for compliance, especially in light of the current nurse staffing shortage.
The final rule revises Parts 438, 442, and 483 of Title 42 of the Code of Federal Regulations (CFR), which cover requirements for LTCs, but this article will focus primarily on Part 483.
The revised Part 483 sets forth the major changes for staffing requirements for LTCs. For example, the previous Section 483.35(b)(1) only required an RN to be present for at least eight consecutive hours a day, seven days a week, but there was no requirement that the RN had to provide direct resident care. In addition, the previous 483.35(a)(1) and (2) required LTCs to only provide the services of a “sufficient number” of licensed nurses (RNs and LPNs) and other nursing personnel, such as nurse aides (NAs), 24 hours a day to provide nursing care.
The Rule fundamentally changed these requirements. Now, LTCs are required to provide a minimum total nurse staffing standard of 3.48 hours per resident day (HPRD) that must include at least 0.55 hours of direct RN care per resident day and 2.45 hours of direct NA care per resident day. CMS did not create a minimum LPN/licensed vocational nurse (LVN) staffing requirement because CMS found insufficient evidence that supported a particular minimum standard for LPN/LVNs.
In addition, LTCs are required to have an RN onsite 24 hours a day, seven days a week, who is available to help mitigate against preventable safety events and deliver critical care to residents at any time. CMS made clear that the 24/7 RN can provide the required direct care and would count toward the .55 HPRD of RN direct care.
CMS stressed that these staffing requirements are floors, and that if the LTC’s patient population requires additional staffing, then the LTC must provide that additional staffing. To assist LTCs in determining whether additional staffing is needed, CMS revised the annual facility assessment requirements under a new section, 42 CFR § 483.71. CMS changed the facility assessment to make sure that facilities will increase the minimum staffing needs if resident acuity requires an increase. In changing the facility assessment, CMS allowed non-employees and contractors, including union representatives, to be involved in the annual assessment as a safeguard against intimidation toward employees who believe additional staffing is required. It is important to note that CMS made clear that even if the yearly facility assessment under § 483.71 shows that an LTC needs less than the minimum staffing requirement, the facility still has to comply with the minimum standards.
The Rule provides a hardship exemption for the total nurse staffing standard of 3.48 hours per resident day requirements, as well as separate hardship exemptions for the 0.55 hours per resident day of RNs, 2.45 hours per resident day of NAs, and the 24/7 RN requirements. The hardship exemptions, which are temporary, are available if the applicable licensed nurse population ratio in the area is a minimum of 20% below the national average. LTCs cannot request a survey specifically for the purpose of requesting an exemption but, instead, must wait until the standard recertification survey to prove an exemption, which puts LTCs in a precarious circumstance. If the LTC cannot establish a hardship exemption during a recertification survey, then the LTC will be out of compliance with the Rule, which is a condition of Medicare participation.
There are significant enforcement remedies that may be imposed by CMS or the state if an LTC is out of substantial compliance with the requirements including, among other things: termination of the provider agreement with the state/CMS, civil monetary penalties, state monitoring, transfer of residents, directed plan of correction/in-service training, and closure of the facility.
CMS acknowledged that these new minimum staffing requirements will increase staffing in more than 79% of LTCs nationwide, and the specific RN and NA HPRD requirements exceed the existing minimum staffing requirements in nearly all states. CMS also recognized that compliance with the new minimum staffing requirements will cost LTCs at least $53 million in year one, $1.43 billion in year two, and then $4.4 billion by year three, with an overall cost of $43 billion by year 10.
At the same time, CMS believes that the .55 RN HPRD will save Medicare approximately $320 million per year and $2.55 billion over ten years. CMS believes that the 24/7 RN and 3.48 HPRD staffing requirement in combination will achieve substantial savings, but CMS did not measure those savings.
A major reason LTCs expressed opposition to the Rule is the sheer difficulty in coming into compliance. Practical reasons such as the extensive nursing staff shortages throughout the country have caused many commenters to find the requirements unattainable. Commenters also shared concerns with the costs and burdens on LTCs in coming into compliance without dedicated funding, with the fear that the burdens will force LTCs to reduce admissions or close down altogether. A study conducted by the American Health Care Association found that only 6% of nursing homes currently meet all of the requirements of the final rule, and that 80% of nursing homes will have to hire more RNs to meet the 24/7 RN requirement, including 92% of rural facilities. The research estimated that nearly one-quarter (290,000) of residents are at risk of displacement from their current nursing home due to the staffing mandate.
CMS responded to such comments by pointing to evidence showing that appropriate staffing made a crucial difference in quality of care that will, it believed, ultimately reduce costs. CMS also stressed the need for the Rule by noting the consequences of inadequate staffing, such as poor resident outcomes, adverse events, and delayed or omitted basic care tasks. To address the comments about the nursing shortage, CMS stated that it was working to develop programs that make it easier for individuals to enter careers in LTCs, investing over $75 million in financial incentives such as tuition reimbursement.
CMS stated that it expects LTCs to have three possible approaches to addressing the increased costs associated with the higher staffing levels: (1) reduce their margin or profit; (2) reduce other operational costs; and (3) increase prices charged to payors. CMS also feels that facilities can take advantage of the exemptions.
To give LTCs significant time to recruit additional staff needed to meet the requirements, the Rule will be implemented in three phases: LTCs were required to comply with the facility assessment requirements by August 8, 2024; non-rural LTCs must comply with the requirement for an RN onsite 24 hours a day, seven days a week by May 11, 2026; and rural LTCs must comply by May 10, 2027. Facilities must comply with the minimum staffing requirement of 0.55 and 2.45 hours per resident days for RNs and NAs by May 10, 2027, for non-rural LTCs and May 10, 2029, for rural LTCs.
CMS stated that it intends to publish details on how compliance will be assessed in advance of each implementation date for the different components of the Rule. Keep in mind that CMS already collects staffing and census data from LTCs. In that regard, Section 6106 of the Affordable Care Act required LTCs, starting on July 1, 2016, to electronically submit, on a quarterly basis, direct care staffing information based on payroll data and patient census data. CMS developed a system for LTCs to submit this data, known as the Payroll Based Journal (the PBJ System).
As a result, CMS can assess compliance with the Rule strictly based on the PBJ System. However, in response to comments to the Rule, CMS stated that it will not rely solely on data submitted in the PBJ System to determine compliance. Instead, CMS intends to use a combination of PBJ System data and onsite surveys to assess compliance. It is difficult to assess the meaning behind CMS’s comments considering that CMS has warned that compliance will be objective and not subjective.
Some commenters to the Rule noted that PBJ System data is available on a quarterly basis and, therefore, could be used to cite non-compliance on a frequent basis. For example, some commenters asked if day-to-day fluctuations in the daily nurse staffing requirements will result in an enforcement action. However, CMS would not say how violations will be measured. In other words, CMS did not indicate whether one day of non-compliance will result in an enforcement action or whether CMS will require more than just one day of non-compliance.
It is strongly recommended that LTCs, in preparation for the upcoming implementation dates, should (1) revisit internal policies to align with the Rule’s requirements on a staggered basis; (2) conduct annual risk assessments and implement auditing and monitoring plans; (3) foster relationships with contracting partners to fill staffing gaps where needed; and (4) lock in essential long-term suppliers, especially third-party staffing agencies.
