Federal health officials hinted that nursing home providers may soon be forced to spend a minimum of their Medicaid funding on direct care.
A top official with the Centers for Medicare & Medicaid Services has for the second time hinted publicly that the agency is considering enacting a minimum direct care spending requirement for nursing homes. Such a policy could limit the funding available for operations and capital improvements.
“We want to make sure that the dollars get to the direct care workforce to ensure high-quality care,” Dan Tsai, CMS deputy administrator and Medicaid director, told Kaiser Health Network Friday.
Tsai first announced that it was contemplating standards for direct care spending minimums for nursing homes while speaking in Chicago earlier this year.
Similar legislation has already been passed in New York, where providers must now spend a minimum of 70% of revenue on direct care — with at least 40% of that going to direct care workers. A group of nonprofit nursing homes in late May filed a lawsuit challenging the legislation.
CMS has also previously highlighted Illinois’ new nursing home reform legislation that ties Medicaid increases to higher staffing levels.
“There are states across the country trying a range of approaches to make sure that dollars in the system from nursing facility reimbursement rates are actually — one way or another — getting to sufficient, high-quality staffing,” Tsai said last week. “That’s our primary goal.”