Regulation Monday: SNF Staffing Mandate and Medicaid Access Rule

Just announced this morning, CMS has finalized two hotly debated proposed rules into final rules. The final rules involve the SNF staffing mandate proposed last year and the Medicaid Access Rule, requiring 80% of payments for Medicaid HCBS programs go to compensation for direct care workers. The Medicaid Rule follows the original proposed rule while the staffing mandate INCREASES the number of total hours (per day) from 3.0 to 3.48 – .55 hours for RNs and 2.45 hours for CNAs (direct care). I haven’t seen final rule text published but when it is, I will post it. For now, here is the Whitehouse Fact Sheet on both final rules: Staffing and Medicaid HCBS Fact Sheet

The staffing rule is by far, more contentious than the Medicaid rule.  I wrote about the original proposed rule with the rule text in the post, last September. The post is here:   Aside from the hours per day requirement, CMS left in the requirement that each SNF must have an RN on-site, seven days per week, twenty-four hours per day. 

In a released statement from the American Health Care Association, Mark Parkinson, president of the Association stated the following. “It is unconscionable that the Administration is finalizing this rule given our nation’s changing demographics and growing caregiver shortage. Issuing a final rule that demands hundreds of thousands of additional caregivers when there’s a nationwide shortfall of nurses just creates an impossible task for providers. This unfunded mandate doesn’t magically solve the nursing crisis.”

The most perplexing part, for me, of the staffing mandate rule is that CMS has a government funded study from Abt and Associates that plainly states that a per hour, per day mandate will not improve care yet will cost SNFs millions of dollars per year. The Abt Study is here: Abt-Associates-CMS-NH-Staffing-Study_Final-Report_-Apndx_June_2023

The Bureau of Labor Statistics indicates that there are 190,000 registered nurse openings current, and that number will increase. The median age of RNs is 46 years. More than one-quarter of registered nurses report that they plan to leave nursing or retire over the next five years.

CMS in the original proposed rule estimated a cost of $4 billion annually, but other estimates started at $6.8 billion and have moved upward due to inflation. CMS has so far offered no funding for its staffing initiative beyond a one-time, $75 million allotment. CMS has said the funds could be used to market nursing home jobs and create incentives to help CNAs pay for training. 

Bills exists in both houses of Congress that could block the rule. For now, one provider group (AHCA) said it could sue to stop implementation should the final rule be unworkable. As SNFs already teeter on the edge of survival, rural and ex-exurban acutely so, the CMS mandate timing seems rather foolish.  As I have written before, you can’t mandate something that doesn’t exist and assume that compliance will occur. 

The Medicaid Access bill is about increasing senior access to Home and Community Based Care, namely Medicaid waiver slots. A major part of the proposal, in theory, is to “support and stabilize the direct care workforce” in-home and community-based settings. In addition to requiring 80% of payments go to direct care workers in the form of compensation, States will be required to be more transparent in how much is paid for services and how rates for service were set.

When the proposed rule (Medicaid Access) came out late last summer, concerns regarding the affordability of the 80% measure were raised, particularly if additional federal matching money did not occur.  Similarly, because the proposed rule text lacked specificity, Assisted Living providers, a large segment of the HCBS for Medicaid seniors, didn’t know if the 80% rule applied to them and in totality or in a proportional element. 

CMS in the proposed rule stated that it is proposing to require a minimum percentage requirement for homemaker, home health aide, and personal care services because these services “would most commonly be conducted in individuals’ homes and generally community settings’ but then separately stated that it is soliciting comment on facility-based residential services and other facility-based round-the-clock services”. The Final Rule text hopefully, will clarify this element.

My concerns then and now, especially until I can see the text of the Final Rule, are two-fold. First, twenty percent for all other expenses associate with caring for Medicaid HCBS residents is thin at best.  Care and case management expenses along with other expenses could and likely will, exceed twenty percent.  This will have the opposite effect on creating more care opportunity.  If providers cannot effectively function with even a tiny margin, they will either reduce slots or stop participating altogether.

Second, the final rule will codify quality measures.  It will be interesting to see how CMS does this and when, reporting will become mandatory.  My concern is that as of the proposed rule, additional funding is not included for the implementation of quality measures.  Medicaid HCBS is chronically underfunded now.  Increasing costs associated with the program is not a winning strategy to get more providers into the program and to increase slot availability (waivers). 

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