Trying to maintain specific staffing levels included in a new federal mandate may lead to a financial “seesaw” for operators, with efforts to admit more residents constantly tempered by the fear of increasing costs of additional workers, a staffing expert is warning.
Shifting metrics may be especially challenging for facilities with fewer than 40 residents and for nonprofit providers who tend to have a greater share of lower-acuity, long-stay residents, warned Jay Gormley, Chief Investment Officer and COO of advisory services of Zimmet Healthcare Services Group.
Because the federal nursing home staffing mandate includes no way to adjust standards based on risk, most providers will have to choose between living “on the knife’s edge” or staffing above required minimums “all of the time,” an impossibility for many, Gormley said. The difficult choice poised by the final Centers for Medicare & Medicaid Services rule could ultimately mean some potential residents have to be turned away, a concern provider advocates have raised throughout a years-long rule-making process.
“For the first time, there’s going to have to be a front-of-the-house nursing dialogue about taking in new residents because you can’t just have ‘sufficient’ staff,” Gormley told attendees at Zimmet’s recent annual reimbursement conference in Connecticut.
Providers in the past often were able to modestly increase the number of residents with similar care needs after reaching a break-even point without hiring additional nursing staff. But the mandate is designed in a way that could force providers to put financial decisions first, even when they think they have the clinical capacity to care for nominally more patients.
Co-presenter Steven Littlehale likened it to the tail wagging the dog, much as shifting metrics do to Five-Star staffing and overall ratings.
Gormley noted that using current CMS data, he found that 17% of 1-star rated facilities complied with the staffing mandate’s upcoming standards; meanwhile, at 5-star buildings, that rate was just 20%.
“There is something about that that suggests there is a fundamental flaw in the way we’re either looking at this mandate or looking at these [facility] characteristics,” Gormley said.
Moving forward, should a building have wide reimbursement variations for Medicare Fee for Service patients vs. Medicaid Advantage beneficiaries, staffing-related financial hardships could become even more pronounced.
“This is where we start to see the problem with the mandate,” Gormley said. “It doesn’t understand the differences. And you’re in quite a pickle if you need to add agency to meet the mandate.”
Those costs — particularly in rural markets where there may be little local staff available and limited agency presence leads to premium pricing — could make every admit a tough choice for some operators at a time when demand is increasing.
An analysis commissioned by the American Health Care Association and published in May
emphasized that the costs of the mandate would not be spread evenly across the country. Rural facilities and those that primarily serve Medicaid beneficiaries currently are less likely to meet the federal rule’s requirements.
CliftonLarsonAllen found providers in primarily urban states will see an average $167 million in combined increased costs, while those in primarily rural states will experience an average $629 million impact.
