Hundreds of providers are making one last attempt to increase pay rates and limit potential financial penalties of the proposed nursing home pay rule from the Centers for Medicare & Medicaid Services’ that many fear will leave nursing homes saddled with rising costs and increasingly lagging funding.
CMS finalized its controversial nursing home staffing mandate during the 60-day comment period, adding urgency to providers’ views on the 4.1% pay boost first proposed March 28.
Long-term care providers generally expressed appreciation for the pending increase, but also shared concerns that it would not be able to match the rising costs of providing care and hiring additional workers to meet the staffing mandate’s requirements.
“Although the first phase of minimum staffing standards will not be implemented until May 2026, nursing homes will be working on recruitment and retention now in preparation for those standards,” wrote Jodi Eyigor, director of nursing home quality and policy at LeadingAge, which shared a copy of its formal comment with McKnight’s Long-Term Care News Tuesday.
Eyigor also noted concerns about rising costs associated with the required enhanced barrier precautions that took effect in March and the ongoing necessity of using personal protective equipment to protect residents.
Enough for the future?
CMS’ annual pay adjustment for fiscal year 2025 included a 2.8% market basket update, a 1.7% market basket forecast error adjustment and slight downward productivity adjustment — totalling up to the proposed 4.1% overall increase.
The rule would also rebase the skilled nursing facility market basket to 2022 — an update broadly welcomed by the sector.
Leaders, however, expressed worry that CMS’ updates wouldn’t keep pace with continually rising costs and made no mention of the coming staffing requirements, which have been estimated to cost between $4 billion and $7 billion annually.
“Our members are concerned about annual FFS rate updates keeping up with actual expenses in the year they occur, and more broadly the impact on Managed Medicare rates and the long-term viability of skilled nursing facilities,” the American Health Care Association wrote in an 86-page public comment submitted Tuesday afternoon. “In addition to inflationary pressures on current spending, future cost expectations are more daunting and will require CMS to hone its methods to keep up with actual costs.”
With an eye on the staffing mandate, the leading provider group asked CMS to include a prospective adjustment for labor inflation in the final version of the rule — an adjustment previously used in FY2023 — and to “engage with the SNF community in researching ways that the additional costs of the Minimum Staffing Final rule can be reflected in future fiscal years so that additional funding occurs to meet CMS’ staffing mandate.”
The FY 2025 pay increase would slightly surpass fiscal year 2024’s 4.0% increase. That number was originally set at 3.7% and increased following the public comment period.
New penalty powers loom
The proposed rule also expands CMS powers to impose civil monetary penalties on providers — specifically allowing regulators to impose both per-day and per-instance CMPs for the same deficiency in the same survey.
CMS claims these expanded CMP powers will give it “flexibility to better hold nursing homes accountable for failing to provide safe, quality care for their residents.”
Some providers pushed back. One nursing home board member wrote asking CMS to consider how additional fines could harm the already struggling long-term care sector.
“Financial penalty without survey reform will not improve nursing home quality,” wrote Aaron Mork of Wisconsin provider Christian Community Homes and Services. “Rather, CMPs hurt residents by taking money away from the nursing home where it is needed to recruit and retain staff, implement quality improvement programs, and make capital improvements to the physical environment.”
LeadingAge had encouraged its members to write CMS about that specific provision of the rule, but the issue appeared at deadline not to have generated significant provider outrage. Still, the association urged a more collaborative approach to surveys in a statement provided to McKnight’s.
“Rather than penalizing nursing homes through increased fines, CMS would do better by turning its attention to survey process reform — in particular, allowing for constructive feedback and educational support,” the statement reads. “CMS often contends that their role is one of enforcement and not quality improvement, but the two need not be mutually exclusive.”
Around 330 public comments had been posted as of publication time.
