CMA Alert | July 21, 2022

Improving Nursing Home Staffing Levels Can And Must Be Done

As the Biden Administration works to develop and implement a standard for minimum nurse staffing levels in nursing facilities,[1] facility owners and executives attempt to derail this progress by arguing that almost all facilities would need to increase their staffing levels and that the costs would be enormous. The American Health Care Association, the national trade association representing the business interests of facility owners and executives, cites a report by the consulting firm CliftonLarsonAllen[2] to make their case. The report finds that a 4.1 hours per resident per day staffing standard identified in a federally-mandated staffing report more than 20 years ago – which actually found that nurse staffing thresholds between 4.1 and 4.85 hours of nursing care per resident per day were necessary to avoid “critical quality of care problems”[3] – is not currently met by 94% of nursing facilities nationwide.[4]

Think about that admission – the major national nursing home trade association admits that the overwhelming majority of nursing facilities in the country do not have enough staff to meet a standard that was recognized more than 20 years ago as the minimum staffing level needed to provide residents with appropriate care.

Clearly, more nursing staff are necessary in 2022 to meet the greater health care needs of today’s nursing home residents. AHCA, however,  argues that meeting the 20+-year old staffing standard would require hiring 187,000 nurses and nurse aides, at a cost $10 billion a year.[5] Even if that estimate were true,[6] $10 billion is just over 5% of the $196.8 billion in national nursing home expenditures in 2020.[7]  Moreover, the $10 billion price tag for nursing staff, identified by CLA and AHCA, does not mean that facilities need $10 billion more than they receive now.[8] Nursing facilities divert a considerable amount of their revenues to profits, management fees, related party contracts, and other expenses unrelated to resident care.

A case filed by 238 of New York State’s 615 nursing facilities makes this point. Challenging a 2021-2022 state budget law that both requires nursing facilities to spend designated portions of their revenue on resident care and limits facility profits, New York facilities allege in their Complaint that if the budget law had been in effect in 2019, facilities would have had to return $824 million to the state.[9] In other words, the facilities admit that nursing facilities in New York State were paid $824 million in 2019 for excess profits and spending not related to resident care, as those terms are defined by the state’s budget law. One state, one year, close to one billion dollars.

A recent report by the Empire Center finds that for-profit nursing facilities in New York State hide profits in related-party transactions.[10] Analyzing in-depth a 17-facility state nursing home chain, the Center finds that the chain’s two owners “netted at least $13.8 million in profits and salaries from their combined nursing homes businesses,” more than eight times the $1.7 million officially reported as profits. Seventeen facilities, two owners, nearly $14 million in profits. In 2018, The New York Times reported that nursing facilities’ contracts with related companies “accounted for $11 billion of nursing home spending in 2015 – a tenth of their costs – according to financial disclosures the homes submitted to Medicare.”[11] Nursing facilities doing business with related companies employed fewer nurses and aides and were more likely to have serious health violations.

Conclusion

Decades of research document that nursing home residents cannot receive high quality of care and enjoy high quality of life, as promised by the 1987 Nursing Home Reform Law, unless nursing homes are appropriately staffed by sufficient numbers of well-trained, well-compensated, and well-treated staff. 

The nurse staffing needs of nursing facilities are considerable, the challenges of recruiting nursing staff are significant, and undoubtedly, there will be some additional costs to pay for more staff.  Addressing these challenges in a meaningful and comprehensive way must be the country’s public policy goal. The nursing home industry must be part of the solution, not a hindrance to better care for residents.

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[1] White House, “Protecting Seniors and People with Disabilities by Improving Safety and Quality of Care in the Nation’s Nursing Homes” (Feb. 28, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/; see Charlene Harrington, et al, “Appropriate Nurse Staffing Levels for U.S. Nursing Homes,” Health Serv Insights. 2020; 13: 1178632920934785, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7328494/ 
[2] CliftonLarsonAllen, “Staffing Mandate Analysis In-Depth Analysis on Minimum Nurse Staffing Levels and Local Impact” (Jul. 2022), https://www.ahcancal.org/News-and-Communications/Fact-Sheets/FactSheets/CLA-Staffing-Mandate-Analysis.pdf 
[3] Abt Associates, Inc., Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes. Report to Congress: Phase II Final, Overview of the Phase II Report: Background, Study Approach, Findings, and Conclusions, p. 15 (2001), https://www.justice.gov/sites/default/files/elderjustice/legacy/2015/07/12/Appropriateness_of_Minimum_Nurse_Staffing_Ratios_in_Nursing_Homes.pdf.  See also Charlene Harrington, Christine Kovner, Mathy Mezey, Jeanie Kayser-Jones, Sarah Burger, Martha Mohler, Robert Burke, David Zimmerman, “Experts Recommend Minimum Nurse Staffing Standards for Nursing Facilities in the U.S.” The Gerontologist (2000) Vol. 40 (1): 5-16 
[4] AHCA, “Report: Increasing Nursing Home Staffing Minimums Estimated at $10 Billion Annually” (Press Release, Jul. 19, 2022), https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/Report-Increasing-Nursing-Home-Staffing-Minimums-Estimated-at-$10-Billion-Annually.aspx 
[5] AHCA, “Report: Increasing Nursing Home Staffing Minimums Estimated at $10 Billion Annually” (Press Release, Jul. 19, 2022), https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/Report-Increasing-Nursing-Home-Staffing-Minimums-Estimated-at-$10-Billion-Annually.aspx 
[6] A study published last year by AHCA and Brown University estimated that meeting federal minimum nurse staffing levels, as proposed in Congressional legislation, would cost $7.25 billion.  Terry Hawk, Elizabeth M. White, Courtney Bishnoi, Lindsay B. Schwartz, Rosa R. Baier, David R. Gifford, “Facility characteristics and costs associated with meeting proposed minimum staffing levels in skilled nursing facilities,” Journal of the American Geriatrics Society, 2022; 70(4):1198-1207 (2021), abstract at https://agsjournals.onlinelibrary.wiley.com/doi/10.1111/jgs.17678 
[7] Amy Stulick, “National Nursing Home Spending Reaches $196.8 Billion in 2020,” Skilled Nursing News (Dec. 15, 2021), https://skillednursingnews.com/2021/12/national-nursing-home-spending-reaches-196-8-billion-in-2020/ (citing a December 2021 analysis by the Office of the Actuary, CMS)  
[8] Elizabeth Halifax, Charlene Harrington, “Nursing home financial transparency and accountability are needed to assure minimum staffing levels,” (Commentary) Journal of the American Geriatrics Society, https://doi.org/10.111/jgs. 17931 (2022), https://agsjournals.onlinelibrary.wiley.com/doi/10.1111/jgs.17931 
[9] Home for the Aged of the Little Sisters of  the Poor v. Mary T. Bassett, No. 1:21-cv-01384 (BKS/CFH) (N.D.N.Y., filed Dec. 29, 2021), https://medicareadvocacy.org/wp-content/uploads/2022/01/Nursing-homes-NY-nh-case-21-cv-1384-BKS-CFH-complaint-U.S.-District-Court-NYND-2.pdf.  “How Do Nursing Homes Spend the Reimbursement They Receive for Care? (CMA Report, Jan. 26, 2022), https://medicareadvocacy.org/how-nursing-homes-spend-public-money/ 
[10] Bill Hammond, Empire Center, “Following the Money: An analysis of ‘related company’ transactions in New York’s nursing home industry” (Jul. 5, 2022),   https://www.empirecenter.org/publications/following-the-money-2/l 
[11] Jordan Rau, “Care Suffers as More Nursing Homes Feed Money Into Corporate Webs,” The New York Times (Jan. 2, 2018), https://www.nytimes.com/2018/01/02/business/nursing-homes-care-corporate.html

Where Do Health Care Dollars Go?

The health news website Stat reported on July 18, 2022, “The CEOs of approximately 300 health care companies collectively took home more than $4.5 billion in 2021,” which is “seven times what the Centers for Disease Control and Prevention had to spend on studying, surveilling, and managing emerging and zoonotic infectious diseases in 2021, a year in which America approached 1 million cumulative deaths due to Covid-19.”

The top earner was Regeneron Pharmaceuticals CEO Leonard Schleifer, $453 million.

• Read the full report, Health care’s high rollers: As the pandemic raged, CEOs’ earnings surged at https://www.statnews.com/2022/07/18/health-care-ceo-compensation-2021

NEJM Perspective: ACO REACH – A Progressive Value-Based Payment Model, Promoting Equity

In its “A Year in Review June 2021-May 2022,” CMS cites the introduction of the Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) model as a key accomplishment in achieving its strategic initiatives. In alignment with the first pillar of its strategic plan (advancing health equity),[1] CMS explains that the “ACO REACH model will test an innovative payment approach to better support care delivery and coordination for patients in underserved communities.”[2]

A perspective published in the New England Journal of Medicine sees the ACO[3] REACH model as a shift from the “regressive” value-based payment models. Those previous models, the report holds, have not only “failed to meaningfully reduce health care expenditures or improve quality of care,” but have also “hampered the pursuit of health equity” towards a “progressive” model that “could help advance health equity.”[4]

The authors contend that the value-based payment model, “a defining feature of the U.S. health care reform during the past decade,” unintentionally perpetuated structural racism partly because equity was not specifically prioritized in the design and implementation the program. Furthermore, “in the absence of explicit incentives to invest in equity, value-based payment models can … widen disparities.”

The ACO REACH model differs from traditional value-based payment models because it explicitly identifies equity, not just value, as a central goal. The authors highlight three main ways the model does this:

1. The model includes “health equity benchmark adjustments” aimed at supporting ACOs caring for socioeconomically disadvantaged patients. CMS “acknowledges that providers may need to spend more – not less – to care for members of marginalized communities” and will increase spending benchmarks for each ACO member in the top decile of disadvantaged.
2. ACO REACH will require ACOs to “develop and implement a health equity plan” that identifies disparities in their patient populations, establishes an equity strategy, and adopts actions to reduce disparities.
3. CMS will require ACOs to “collect and submit data on patient-reported demographics and social determinants of health.”

While the authors acknowledge that it “remains to be seen whether the health equity plan requirement will motivate real action,” the underlying theory is promising. They conclude one key to successful implementation of this provision is proper oversight by CMS.

Over the years, the Center for Medicare Advocacy has highlighted some concerns  regarding beneficiaries’ access to some of the extra benefits that ACOs can provide, such as waiver of the three-day hospital inpatient requirement for skilled nursing facility care.  Further, the Center has had significant concerns about the REACH ACO predecessor program, the Direct Contracting demonstration (particularly the so-called Geographic model that has been suspended). While the effectiveness of ACO REACH remains to be seen, the Center agrees that maintaining equity should be a central policy goal to combat unintended disparities that otherwise fortify systemic racism and socioeconomic bias.

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[1] The other five pillars are: Expand access, engage partners, drive innovation, protect programs, and foster excellence. 
[2] CMS. A Year in Review June 2021-May 2022. (Date n.a.). Available at: https://www.cms.gov/files/document/year-review-june-2021-may-2022.pdf 
[3] According to CMS, Accountable Care Organizations (ACOs) are providers that voluntarily give coordinated high-quality care. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding duplication of services. ACOs are incentivized to reduce spending below a benchmark. 
[4] Gondi, S., Joynt Maddox, K., & Wadhera, R. K. “REACHING” for Equity – Moving from Regressive toward Progressive Value-Based Payment. New England Journal of Medicine. (July 9, 2022). Available at: https://www.nejm.org/doi/full/10.1056/NEJMp2204749

Report: CDC Attempts to Overcome Limited and Incomplete COVID-19 Data to Address Health Disparities

Secretary of Health and Human Services, Xavier Becerra, renewed the Public Health Emergency (PHE) on July 15^th. [1] Over two-and-a-half years after the initial PHE was enacted, COVID-19 has infected almost one-third (27%)[2] of the people living in the United States and claimed over one million lives.[3] To date, COVID-19 remains highly contagious. According to the Centers for Disease Control and Prevention (CDC), almost 93% of the counties in the nation are experiencing “high” levels COVID-19 community transition.[4]

In reaction to the pandemic, mandatory reporting of some public health data was introduced including anonymized patient-level data on several COVID-19 indicators included testing, cases, hospitalizations, and deaths.[5]

Some of this data contained patients’ race, ethnicity, and socioeconomic profiles. A recent Office of Inspector General (OIG) report found that these data points for COVID-19 “testing, cases, hospitalizations, and deaths have limitations and provide an incomplete picture of COVID-19 disparities.” Despite the gaps, however, the CDC was able to “supplement and improve these data.” Approaches employed by the CDC include analyzing disparities using additional data sources (“such as emergency department data”) and developing “a methodology to identify disproportionately impacted communities of color using Census data.”

The OIG report emphasized COVID’s “historic impact” on Black, Hispanic or Latino, American Indian or Alaska Native, Native Hawaiian or Other Pacific Islander, and Asian communities, as well as those from economically disadvantaged communities. Members of these populations were not only more likely to experience poor health outcomes, but also had higher infection rates, hospitalizations, and deaths compared to members of predominantly White and/or affluent communities.

The OIG recommended that the CDC:

• Expand efforts to improve racial and ethnic data associated with COVID-19 and to supplement them with additional data sources.
•  Ensure that Tribal Epidemiology Centers (TECs) have timely access to all public health data to which they are entitled, including clarifying TECs’ authority for States, if needed.

The CDC concurred with both OIG recommendations.

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[1] HHS. Renewal of Determination That A Public Health Emergency Exists. Public Health Emergency. (July 15, 2022). Available at: https://aspr.hhs.gov/legal/PHE/Pages/covid19-15jul2022.aspx 
[2] According to the U.S. Census Bureau, the United States population was estimated on January 1, 2022, to be 332,403, 650. While, as of July 18, 2022, the CDC’s COVID Data Tracker reports the total number of COVID-19 cases to be 89,329,839. 
[3] CDC. COVID Data Tracker. (Update July 18, 2022). Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home 
[4] CDC. COVID-19 Integrated County View. COVID Data Tracker (Updated July 18, 2022). Available at: https://covid.cdc.gov/covid-data-tracker/#county-view?list_select_state=all_states&list_select_county=all_counties&data-type=Risk 
[5] OIG. CDC Found Ways to Use Data to Understand and Address COVID-19 Health Disparities, Despite Challenges with Existing Data. OEI-05-20-00540. (July 13, 2022). Available at: https://oig.hhs.gov/oei/reports/OEI-05-20-00540.asp

Free Webinar | Medicare Enrollment Matters

Thursday October 13, 2022 | 2;30 PM – 4:00 PM EDT

This webinar will discuss the 2023 Annual Coordinated Election Period (ACEP), including outreach and education materials issued by the Medicare program, common enrollment pitfalls, options when you miss your Initial Enrollment Period, and other considerations for Medicare beneficiaries and those who assist them. Policy changes and other updates for 2023 will also be discussed.

Register now at https://medicareadvocacy.org/webinars/

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