The White House and federal regulators have thrust nursing homes into what could be a two-generation crisis mode, and providers must act quickly to soften the blow, a leading industry expert says.

President Biden’s proposed nursing home reforms, coupled with a proposed $320 million cut to fiscal 2023 Medicare payment rates, may create the biggest changes in 40 years, ProMedica’s Brian Perry told McKnight’s Long-Term Care News.

“Is this a ‘new era?’” the company’s vice president of government relations and advocacy was asked in a recent McKnight’s Newsmaker podcast. 

“I think it is, whether we in the provider community want it to be or not,” Perry said. “This is about as new as we’ve seen in about 15 or 20 years and will, frankly, probably dictate what the next 15 or 20 years will look like in this industry.”

The fact that regulators proposed a parity adjustment to offset higher Patient Driven Payment Model payments wasn’t a surprise. But the size and timing were, he said.

“It is kind of shocking that we’re talking about layer upon layer of unfunded mandate of regulatory reforms and also talking about a $320 million cut to our rates, raging inflation … you name it, there are a lot of arrows pointed in at this sector, “ Perry noted. “This one came at a really, really poor time.”

Providers must be assertive in submitting comments to the Centers for Medicare & Medicaid Services before the June 10 deadline, Perry said. 

“Spreading [proposed cuts] over a period of years seems to make the most sense. It will allow us, as providers, to weather this storm in the easiest way possible. I think the CMS is going to hear from the provider community,” Perry noted. “There are an awful lot of people coast to coast that I talked to, from the C-suite down to the nurse-aide level, who are saying, ‘Really? Right now? This is what’s happening?’

“I really trust that CMS will do their due diligence and really, really put pen to paper and figure out if this is the best time for a one-time $320 million cut, or if we can find a way to do this a little more reasonably.”

American Health Care Association President and CEO Mark Parkinson is among several notable skilled nursing figures pushing for a phased-in approach, as CMS had once seemed amenable to. But others, reflecting on comments from Administrator Chiquita Brooks-LaSure and others in the agency, say providers shouldn’t count on such flexibility.

A run on for sale signs?

The proposed cut came quickly after the administration unveiled reform plans that include staffing minimums. That all this happened without consulting providers —  who are already having to deal with hundreds of thousands fewer workers in the industry since the pandemic began — really puts things in “the Twilight Zone,” Perry said.

“Let’s talk about the $320 million (proposed cut). You could make this $3.2 billion you’re going to give to the sector and that does not necessarily mean that we’re going to be able to find the nurses that are being required by some of these regulatory proposals that we’re very impatiently awaiting,” he explained. “When you look at this, there is no way we get out of this without more funding.

“If we’re looking at unfunded mandates,” he added, “then there’s just going to be a run on ‘for sale’ signs in this sector, which will very, very quickly lead us into what I believe will be the access-to-care crisis that we’ll be talking about for the next 10 or 15 years.”

He joins many long-term care leaders in claiming systemic Medicaid underfunding is the root of many problems.

“It makes perfect sense that, just given how we have constructed policy-making in America, that we would point fingers and assign blame (on nursing homes), but nobody seems to assign blame to the decades of underfunding that we’ve seen in Medicaid,” he said. 

In Pennsylvania, Perry noted, providers are paid more than $40 less than the cost of care per Medicaid patient day.

“We in policy-making have never valued the life of a Medicaid recipient, from the start of Medicaid, and it’s getting worse,” he said. “We have these structural issues in this sector that nobody seems to want to address.”