Headshot of CMS Administrator Chiquita Brooks-LaSure

The Centers for Medicare & Medicaid Services Tuesday proposed a 3.7% pay hike for nursing homes but declined to issue a staffing minimum as part of its annual payment rule proposal. The agency said it “remains committed” to doing so “later this spring.”

The agency had said it would propose the minimum staffing mandate as part of its Skilled Nursing Facility Prospective Payment System for fiscal year 2024 in a rule-making calendar published in the Federal Register.

“CMS continues to review the feedback and evidence from both the comment solicitation and mixed-methods study, all of which will be used to inform proposals for minimum direct care staffing requirements in nursing homes in rulemaking this spring,” the agency said Tuesday.

The proposed rule includes a net increase of 3.7%, or approximately $1.2 billion, in Medicare Part A payments to SNFs in FY 2024. The estimate includes a $2 billion increase resulting from the 6.1% net market basket update to the payment rates, which is based on a 2.7% SNF market basket increase plus a 3.6% market basket forecast error adjustment. The rate also reflects a 0.2% productivity adjustment and a cut $745 million, or about 2.3%, which represents the second phase of a two-year decrease in rates related to recalibration of the Patient Driven Payment Model.

After the implementation of PDPM in October 2019, a CMS analysis found an unintended increase in payments of approximately 5% or $1.7 billion annually. CMS last year finalized a PDPM parity adjustment factor of 4.6% in the FY 2023 SNF PPS final rule with a two-year phase-in period, resulting in a 2.3% reduction for FY 2023 and FY 2024.

The proposed SNF pay increase for fiscal 2024 outpaces that proposed for hospice providers and inpatient rehabilitation facilities in recent days.

Staffing details delayed

But it may be the lack of detail on a federal staffing mandate that surprises skilled nursing providers. Most had been bracing for a proposal in recent weeks.

The White House first teased its plan for a staffing minimum on Feb. 28, 2022, when it released a 21-point reform plan supporting a “crackdown on unsafe nursing homes.”  CMS said at the time that it planned to propose a related rule within one year.

In the more than 13 months since, providers have grimaced at the concept of proscriptive staffing increases and pleaded with policymakers to recognize the harsh reality on the ground. Skilled nursing remains the only healthcare sector yet to recover from its pandemic staffing losses. Nursing homes lost 210,000 workers between February 2020 and December 2022, according to federal labor statistics.

At the current pace of modest job growth, nursing homes would not return to pre-pandemic staffing levels until 2027, the American Health Care Association and the American Hospital Association warned CMS Administrator Chiquita Brooks-LaSure in an April 3 letter. 

Federal lawmakers have been split on the issue, with various coalitions issuing letters alternatively imploring CMS to pause its mandate efforts or to adopt standards as soon as possible. In February, a group of seven Democrats led by Sen. Bob Casey (D-PA) urged CMS to move quickly but also to look at how a new rule would impact providers with a “more limited workforce.”

In March, 113 House Democrats said adopting a staffing rule this year was imperative, but also encouraged CMS to continue pursuing a regulation to better measure the adequacy of state Medicaid payments. Shoring up Medicaid payments could ultimately provide key revenue for providers to spend on staffing improvements.

“If there is evidence that current payment rates are insufficient to support safe staffing levels, CMS should take further steps to ensure that nursing facilities have the financial resources to comply with, if not exceed, minimum standards,” the members of Congress wrote last week.

An updated American Health Care Association study estimated in December that a federal staffing requirement based on the 4.1-hour daily standard would cost up to $11.3 billion per year and require hiring more than 187,000 new workers.

Other staffing, quality elements included

CMS did propose additional quality reporting and value-based purchasing measures, chief among them a new nursing staff turnover measure billed as “part of the Administration’s focus to ensure adequate staffing in long-term care settings.”

The measure, already collected and publicly reported on Care Compare, would be reported as part of the value-based purchasing program next fiscal year, with payment effects beginning in fiscal 2026.

Other value-based changes include:

  • Replacement of the 30-Day All-Cause Readmission Measure with a Skilled Nursing Facility Within Stay Potentially Preventable Readmissions measure beginning with the FY 2028 program year and FY 2025 performance year.
  • Proposed adoption of a Discharge Function Score measure beginning with the FY 2027 program year and FY 2025 performance year. It would assesses functional status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score, and use mobility and self-care items already collected on the MDS.
  • Proposed adoption of the Long Stay Hospitalization Measure per 100 residents beginning with the FY 2027 program year and FY 2025 performance year.
  • Proposed adoption of the Percent of Residents Experiencing One or More Falls with Major Injury beginning with the FY 2027 program year and FY 2025 performance year. It would assess falls with major injury rates of long-stay residents.

The rule also proposes three new quality reporting measures, modifies another and calls for the elimination of three more from the program. Among them are two changes to COVID-18 vaccine reporting.

CMS is proposing the adoption of the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (measure beginning with FY 2026. This measure reports the percentage of stays in which residents in a SNF are up to date with recommended COVID vaccinations in accordance with Centers for Disease Control and Prevention’s guidance. Data would be collected using a new standardized item on the MDS.

The agency also proposes modifying the COVID-19 Vaccination Coverage among Healthcare Personnel measure beginning with the FY 2025 SNF QRP. The current measure reports only whether the healthcare worker has received a primary vaccination series for COVID. The modification would require SNFs to report the number of workers who are up to date, as per CDC guidance.

Formal comments on the rule will be accepted through June 5.

This is a developing story. Check back for details.