With increasing older adult demand for hospital care, an ongoing wave of nursing home closures is creating post-acute access issues. Since 2020, 774 nursing homes have closed, and only seven new facilities opened in 2024.
The primary driver for closure is a nationwide shortage of qualified clinical staff, exacerbated by the COVID pandemic. The pandemic caused significant numbers of retirements, particularly among registered and licensed nurses. Insufficient staff has caused large numbers of facilities to furlough beds, reducing occupancy and in-turn, revenue. Additionally, facilities trying to augment staffing numbers, have relied on staffing agencies for hours. Agency resources come at a higher cost than regular staff.
Other challenges compound the staffing (lack thereof) issue. Overall operating costs have increased, faster than reimbursement increases under Medicare or Medicaid. Inflation has pushed energy, food, and other commodity costs higher.
Increased regulation, some arising from the pandemic, some separate, drives additional cost – again, not captured via reimbursement. The recently enacted federal staffing minimum plan from CMS, presents enormous challenges for facilities going forward, more so for rural facilities ‘A path to closure’: Nebraska nursing homes worry about future under new rules (youtube.com)
The recent Chevron decision by the Supreme Court (https://rhislop3.com/2024/07/01/scotus-chevron-decision-a-win-for-healthcare/) does offer a glimmer of hope in so much that numerous current lawsuits seek to vacate the staffing rule. For example, the American Health Care Association, the Texas Health Care Association and three skilled nursing facilities filed suit against Health and Human Services Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure in the US District Court for the Northern District of Texas’s Amarillo Division. AHCA Files Lawsuit Against Federal Staffing Mandate (ahcancal.org)
What is most worrisome to facilities about the staffing mandate is the cost of compliance combined with no real indication that CMS will provide adequate resources to meet the cost. Two factors are at play. First, staffing resources adequate to meet the new hours per day requirement don’t exist nationwide. Some regions may have adequate numbers but rural areas, for example, don’t. Second, as healthcare services expand to meet the care needs of aging population (hospital, hospice, home health, etc.), demand for staff increases. With tight supply and increasing demand, costs increase – again, absent corresponding reimbursement increases. https://rhislop3.com/2023/08/30/wednesday-feature-cms-snf-staffing-mandate-stalled-the-abt-report-on-feasibility/
Since 2020, the number of nursing home beds has decreased by 62,567. Due to labor shortages, twenty percent of nursing homes have shut down a unit, wing, or floor, and at least 774 facilities have completely closed in the past four years, displacing over 28,400 residents.
The demand for long-term and post-acute care is on the rise. In 2024, only seven new facilities were established, a stark contrast to the 37 in 2023, 55 in 2022, 71 in 2021, and 73 in 2020. This downward trend has led to the emergence of “nursing home deserts,” with an addition of 40 counties to this category since 2020. Notably, 85% of these deserts are located within rural communities. AHCA Access to Care Report 2024 FINAL
