Worries about the cost of a potential nursing home staffing mandate are mounting among provider organizations across the country as more try to pinpoint just how much of an investment they’ll need to meet new requirements.

In Pennsylvania, which has 681 nursing homes, it could cost providers more than $360 million more annually to staff at 4.1 hours per patient day, using calculations modeled on a 4.1-hour staffing rule adopted by Washington, DC, in 2012. 

That was the staggering assessment Jonathan Hansen, a principal in CliftonLarsonAllen’s Baltimore office, delivered to attendees at the LeadingAge Pennsylvania finance conference Tuesday.

Those estimates are driven largely by a need to hire and pay certified nurse aides, for which about 66% of state providers continue to use agency staffing at 1½ to 2 times the cost of employed nurse aides.

“You’re losing money, you’re losing people but there’s a staffing mandate coming down at the worst time,” Hansen said. “Costs are going up.”

Earlier this year, CliftonLarsonAllen conducted a study on behalf of the American Health Care Association and estimated providers would have to spend an additional $10 billion more per year nationally and hire more than 187,000 new workers to meet requirements of a 4.1 hour standard.

Those findings proved that nursing homes would need “substantial and consistent government resources” to comply with the regulations, AHCA leaders said at the time. While the Centers for Medicare & Medicaid Services has said it would promote federal funding as part of the staffing solution, it’s not clear if local legislatures will follow suit on state Medicaid rates.

Worrisome state examples

Earlier this year, a CLA report for the New York State Health Facilities Association showed nursing homes there would have to shell out an additional $325 million this year to meet merely that state’s new, 3.5-hour minimum, which went into effect in April.

But whether funding will come along with any proposed mandate or who would be expected to cover additional costs remains wholly unclear.

Pennsylvania just won its first Medicaid increase in nearly a decade, an investment made as the state moved forward with its own staffing standards. Starting in July, providers there will need to provide 2.87 hours per patient day, and that increases to 3.2 hours per patient day in 2024.

For the 30 facilities that fall below the 2.87 threshold right now, Hansen noted an added cost next year of $9.9 million, or about $330,000 per provider. More than a quarter of providers currently would miss the next threshold, requiring another $39.2 million in spending — if there is staff to be hired. 

That was a major concern of attendees, and a point Hansen said providers need to stress in their advocacy efforts.

He noted that regulators and health researchers often argue against agency use, linking it with lower quality. Quality improvement is the key argument for implementing a federal staffing minimum too. But Hansen asked whether quality would improve if the extra nurse hours were filled by agency workers who turned over frequently, a very real possibility with today’s tight labor pool. 

‘Only way’ to do it?

A federal minimum would override any existing state regulations, with the higher requirement going into effect for all Medicare- and Medicaid-participating facilities.  A CMS proposal is expected in March, and will be subject to a comment period the agency has said.

Hansen suggested CMS should institute a mandate that either includes positions beyond nursing in hourly calculations or increase reimbursement to avoid sending a large share of providers out of business.

“That’s the only way to do it,” he said.

For now, providers all over the country are left wondering whether they’ll be able to get more funding from their states if the feds institute untenable staffing rules.

New Hampshire nursing home leaders haven’t conducted an analysis, but even with a 3.99 nursing hour average that far exceeds the current national average, there are concerns about producing more workers under a national staffing minimum mandate.

“We can’t conjure workers out of thin air,” Brendan Williams, president of the New Hampshire Health Care Association told McKnight’s Long-Term Care News Wednesday. “Lacking homegrown licensed staff, in a state with one of the four-lowest unemployment rates, we are maintaining staffing through an untenable reliance on staffing agencies.”

Even then, Williams said, some facilities are holding waitlists with more than 100 prospective residents because they don’t have enough workers to be fully open. 

“A federal staffing minimum would break us, as our legislators are New England’s most frugal,” he said.