Minimum Staffing Requirements Could Cost Nursing Homes $10B Annually

Nursing homes would have to spend up to $10 billion per year and hire almost 188,000 nurses to comply with increased minimum staffing requirements, according to a report from the American Health Care Association (AHCA) and accounting and consulting firm CLA (CliftonLarsonAllen LLP).

The Biden Administration has proposed establishing a minimum staffing requirement for nursing homes to ensure residents receive the highest-quality care. However, meeting these standards may be challenging as nursing homes are already facing significant staffing shortages, stakeholders have pointed out.

Researchers used data from the Payroll Based Journal and annual Medicare cost reports to estimate the potential cost of meeting minimum staffing requirements.

The analysis compared potential costs for registered nurses (RNs), licensed practical nurses (LPNs), and certified nursing assistants (CNAs) for three different minimum staffing requirements: 4.1 hours per patient day (HPPD), 3.6 HPPD, and 3.1 HPPD.

During the fourth quarter of 2021, only 6 percent of nursing homes met the 4.1 HPPD requirement. Thirteen percent and 27 percent met the 3.6 and 3.1 HPPD criteria, respectively.

When looking at the individual disciplines, facilities were more likely to meet the requirement for LPNs, with 85 percent or more of nursing homes meeting all three staffing criteria for LPNs.

Unsurprisingly, fewer nursing homes met the 4.1 HPPD requirement compared to the other requirements, with just 13 percent of facilities meeting the requirement for CNAs, 31 percent for RNs, and 85 percent for LPNs.

Overall, it would cost nursing homes around $10 billion per year to meet the 4.1 HPPD staffing requirement, the report found. In addition, facilities would have to hire 187,112 nurses and nurse aides to meet the standard.

For the 3.6 HPPD standard, nursing homes must spend $6.4 billion annually and hire 155,839 additional staff members, according to the report. It would cost $3.5 billion and require nursing homes to hire 60,037 staff members to meet the 3.1 HPPD standard.

“This report makes it crystal clear that increasing staffing standards in nursing homes requires substantial and consistent government resources,” Mark Parkinson, president and chief executive officer of AHCA, said in a press release.

“Even then, nursing homes would have the impossible task of finding another 187,000 nurses at a time when vacant positions sit open without applicants for months on end. The unintended consequences of this sort of unfunded mandate would be devastating to hundreds of thousands of vulnerable residents who could be forced out of their nursing home.”

For each scenario, nursing homes would have to spend the least and hire the fewest staff to meet the LPN requirement, while facilities would have to invest the most to meet the requirements for CNAs. For example, nursing homes would need to spend $304 million per year and hire around 4,200 LPNs to meet the 4.1 HPPD requirement, while facilities would need to spend $5.8 billion and hire almost 140,000 CNAs.

If the Biden Administration establishes a federal minimum staffing requirement, nursing homes will likely need to reduce the number of residents they care for to meet the standard.

To comply with the 4.1 HPPD requirement, nursing homes would have to displace 18 percent of residents (205,400 residents). For the other two standards, 11 percent (124,631 residents) and 6 percent (68,953 residents) of residents would be at risk of displacement.

“Every nursing home wants to hire and develop more caregivers, but they can’t do it alone. An enforcement approach will not solve this long-term care labor crisis.,” Holly Harmon, RN, senior vice president of quality, regulatory, and clinical services at AHCA, stated in the press release. “We urge the Administration and Congress to put forth meaningful aid and policies that will help us recruit and retain the dedicated caregivers our nation’s seniors deserve.”

In its recently released Skilled Nursing Facility Prospective Payment System proposed rule for fiscal year 2023, CMS included a request for information on long-term care facility staffing requirements.

The agency also updated its guidance on health and safety standards for long-term care facilities. The guidance included new requirements for surveyors to use Payroll Based Journal staffing data to identify potential noncompliance with CMS staffing requirements.