Spotlight on Minimum Staffing Standards in Long Term Care Facilities

The long term care industry is currently in the midst of a labor crisis, with nursing homes in particular experiencing chronic and severe staffing shortages. Even before the COVID-19 pandemic, a rapidly aging population, stagnant reimbursement rates, and increasingly complex medical needs of residents contributed to pervasive workforce strain in the industry. The COVID-19 pandemic exacerbated this strain by putting caregivers on the front lines of a public health emergency and adding intense caregiving challenges, work hazards, and infection control requirements. Unfortunately, these factors resulted in an exodus of labor from the long term care industry.

In response, in February 2022 the Biden administration released a document outlining its commitment to ensuring that nursing homes employ a sufficient number of adequately trained staff to provide quality care to residents. The document specifically directed the Centers for Medicare & Medicaid Services (CMS) to implement national staffing standards for nursing homes. Over a year later, on September 6, 2023, CMS issued a proposed rule requiring nursing homes to do the following:

1. Maintain enough nursing staff to provide each resident with at least .55 hours of care per day from a registered nurse, and at least 2.45 hours of care per day from a nurse aide (“Minimum Staffing Standards”);

2. Maintain a registered nurse on-site 24 hours per day, seven days a week (“24/7 RN Requirement”); and

3. Use evidence-based, data-driven methods in developing and implementing enhanced facility assessments (“Enhanced Facility Assessments Requirement”).

The proposed rule sets forth a staggered timeline for compliance: Following publication of the final rule, nursing homes will have 60 days to comply with Enhanced Facility Assessments Requirement, two years to comply with the 24/7 RN Requirement, and three years to comply with the Minimum Staffing Standards (or longer, for “rural” facilities). In the event of noncompliance, CMS has indicated it will utilize standard enforcement remedies, including the imposition of Civil Monetary Penalties, Denials of Payment for New Admissions, and/or termination of provider agreements.

Under the proposed rule, nursing homes may be eligible for a temporary exemption from the Minimum Staffing Standards (but not the 24/7 Requirement or the Enhanced Facility Assessments Requirement) if they demonstrate the following:

1. Workforce unavailability based on a low-provider population ratio or if their location is at least 20 miles from the next closest long-term care facility;

2. Good faith efforts to hire and retain staff through the development and implementation of a recruitment and retention plan; and

3. A financial commitment to staffing, supported by documentation of their total financial resources spent to employ direct care staff relative to their revenue.

The foregoing notwithstanding, nursing homes will not be eligible for exemption from the Minimum Staffing Standards if (1) they have failed to submit data to the Payroll-Based Journal System, (2) they are a special focus facility, or (3) in the past 12 months, they have been cited for insufficient staffing by CMS.

It’s important to note that “staffing standards for nursing homes” is not a novel concept. Currently, federal law requires nursing homes to (1) maintain a level of staff “sufficient to meet the needs of [their] residents” and (2) employ a registered nurse at least eight hours a day, seven days a week (42 C.F.R. § 483.35(a) and (b)). Additionally, since 2001, CMS has informally maintained that the optimal staffing standard for nursing homes is 4.1 hours of direct care per resident per day. In addition to federal requirements, states also maintain their own staffing standards. About 34 states and the District of Columbia require defined staffing ratios or “hours per resident per day” requirements for nursing homes. The remaining states match or follow the federal requirement to provide “sufficient staffing.”

It follows, then, that long term care providers have long anticipated regulatory action related to national staffing standards. Nevertheless, the proposed rule has prompted a flood of discussion and criticism from stakeholders. The most common critiques can be summarized as follows:

1. The proposed rule fails to address the reality of a labor shortage. There simply aren’t enough applicants to fill the open positions. Of the applicants who are employed, they often don’t stay long. Nursing homes must compete with other employers (either in the long term care industry or otherwise) who can offer better hours, better pay, or a less regulated work environment.

2. The proposed rule fails to address the costs of compliance to be borne by the nursing homes. Given rising labor costs, nursing homes will have to spend an exorbitant amount of money to hire and retain enough staff to meet the staffing standards proposed under the rule. Reimbursement rates from government programs have long been stagnant. Without any additional federal funding, implementation of the staffing standards could seriously jeopardize current operations of nursing homes.

3. The proposed rule discounts direct care provided by LVNs, LPNs, and other caregivers. Only registered nurses and nurse aides will count toward the Minimum Staffing Standards, despite the fact that much of the nursing home workforce is comprised of licensed vocational nurses and/or licensed professional nurses. Also excluded from the proposed Minimum Staffing Standards are therapists, activity directors, and other aides who interact directly with residents daily.

4. The proposed rule fails to account for the rural/non-rural divide. Compared to their non-rural counterparts, rural nursing homes have, on average, smaller resident populations, a smaller local labor pool, and fewer resources. Critics state that rural nursing homes should therefore not be subjected to the same staffing standards as non-rural nursing homes.

Surprisingly, there have been extensive bipartisan efforts to oppose the staffing standards set forth in the proposed rule, including several joint letters penned to the Department of Health and Human Services, to CMS, and to the Office of Management and Budget. In addition, two separate bills have been introduced in Congress that, if passed, will prevent CMS from implementing the final rule unless it can demonstrate that doing so (1) will not result in the closure of skilled nursing facilities, (2) will not harm patient access, and (3) will not make workforce shortage issues worse.

In addition to federal bipartisan opposition, several state-level stakeholders have asserted that nursing home staffing standards should be left to individual states to decide. In November 2023, over 13 governors penned a letter to the Biden administration emphasizing that the proposed rule completely disregards the unique geographic and economic considerations of each state. The governors ended their letter by requesting a “genuine state-federal dialogue” on how best to serve residents of nursing homes.

As with all proposed rules, the question now is how long we all must wait before the final rule is published. CMS received a staggering 46,000 public comments during the comment period, and must now review each comment before proceeding with publishing the final rule. During this review period, CMS will consider modifying the proposed rule based on the public comments received (for example, broadening the Minimum Staffing Standards to include licensed practical nurses/licensed vocational nurses). Though many industry leaders estimate the process could take well over a year, federal rules (Section 1871(a)(3)(B) of the Social Security Act) allow CMS up to three years to finalize a Medicare rule, or even longer “under exceptional circumstances” (such as a record-breaking 46,000 public comments, perhaps). So for now, we’ll just have to wait and see.