In April 2024, the Centers for Medicare and Medicaid Services (CMS) issued a
final rule on minimum staffing requirements for nursing homes (or Medicare- and Medicaid-certified long-term care facilities). The staffing mandate requires a minimum standard of 3.48 total nursing staff hours per resident day (HPRD), including 0.55 hours to be delivered by registered nurses (RNs) and 2.45 hours by nurse aides. The remaining 0.48 hours may be filled by any combination of nurse aides, RNs, and licensed practical or vocational nurses (LPN/LVNs). Additionally, nursing homes will be required to have an RN on-site 24 hours a day, 7 days a week.
The AHCA/NCAL Research department has analyzed the final rule's impact looking at the latest federally available data on nursing homes (Payroll Based Journal, Care Compare, and Medicare cost reports).
Key Takeaways:
- Only six percent of nursing homes currently meet all four requirements.
- 80 percent of nursing homes will have to hire more RNs to meet the 24/7 RN requirement, including 92 percent of rural facilities.
- Nursing homes will have to hire an additional 102,000 nurses and nurse aides to comply with the mandate.
- It will cost nursing homes an estimated $6.5 billion annually to hire these additional caregivers.
- There is a strong correlation between Medicaid census and compliance; facilities that predominantly serve residents on Medicaid are less likely to meet each of the four requirements.
- Nearly one-quarter of nursing home residents (more than 290,000) may be at risk for displacement, as facilities are forced to reduce their census in order to comply with the mandate, or ultimately close altogether.
Most nursing homes cannot currently meet these new requirements. Four out of five nursing homes cannot meet the 24/7 RN requirement. While nearly 60% of facilities already provide at least 3.48 total nursing hours to each resident every day, when broken down further into specific nurse categories, half of facilities cannot meet the 0.55 RN HPRD requirement and 70% cannot meet the 2.45 nurse aide HPRD requirement.
When looking at a combination of all four requirements, only 6% of facilities can currently achieve them.
Location and revenue source drive whether a nursing home can meet the new staffing requirements. Facilities that predominantly serve residents who rely on Medicaid are less likely to meet the HPRD requirements. Medicaid is chronically underfunded, as it reimburses nursing homes
86 percent of actual costs. Additionally, nursing homes in rural communities and small facilities (less than 100 beds) are less likely to meet the 24/7 RN requirement.
In order to comply with the staffing mandate, nursing homes would either have to hire more caregivers or reduce how many residents they serve. If the former,
nursing homes would need to hire nearly 102,000 additional nurses and nurse aides to meet all four requirements, including more than 77,000 CNAs and nearly 24,000 RNs. Looking at Medicare cost report data and assuming inflation given the rule is effective starting in two years, the cost to hire these 102,000 caregivers is estimated at
$6.5 billion per year. As CMS stated in the final rule, “LTC facilities are responsible for these costs.”
Nursing homes are already facing a historic labor crisis brought on by the pandemic. While the workforce in other health care sectors has increased by 5-11% compared to February 2020, nursing homes still need to recover more than
7% of its workforce (or nearly 125,000 workers in a variety of positions) in order to return to pre-pandemic levels. At the current pace, it will take the profession two years to achieve this recovery, despite
unprecedented efforts to attract more staff.
It is also well documented that the country is facing a
growing caregiver shortage as the population ages. Despite the staffing mandate’s phase-in implementation of these requirements (urban facilities have 2-3 years; rural facilities have 3-5 years), labor projections do not suggest that the supply of nurses and nurse aides will improve in the coming years, but rather the opposite. The
ratio of caregivers to older adults will decrease in the coming decade.
Therefore, if facilities are unable to increase their workforce to comply with this new staffing mandate, they may be forced to limit admissions, downsize their facility, or ultimately, close altogether.
AHCA/NCAL estimates that nearly one-quarter (290,000) of residents are at risk of displacement from their current nursing home due to the staffing mandate.
State-by-State Summary
Methods:
Using
daily Payroll Based Journal (PBJ) nurse staffing data from October to December 2023, nursing hours per resident day (HPRD) were calculated for each center in the April 24, 2024 release of
CMS Care Prepare. Registered Nurse (RN) HPRDs included directors of nursing (DON), RN with administrative duties, and RNs. Nurse Aide HPRDs included certified nurse aides (CNAs), aides in training, and medication aides/ technicians. Total nursing HPRDs included all RN and CNA positions mentioned above with the addition of licensed practical/licensed vocational nurses (LPN/LVN) and LPN/LVNs with administrative duties.
While PBJ data is not available at the shift-level, centers with fewer than 24 total registered nurse (RN) hours for a day were counted as not meeting the 24 hours, 7 days a week requirement because it would not have been possible for them to stagger their RN hours to cover the whole day.
Facilities’ characteristics, such as bed size and Medicaid census, were collected from CASPER. The Office of Management and Budget (OMB) definition for urban and rural was used and collected from the Q1 2024
CMS Provider of Services file.
To calculate the number of Full Time Equivalent (FTE) nurses needed, the number of hours needed to meet each specific requirement was calculated. Then the hours needed were multiplied by four to reflect hours needed in a year and divided by 1,950, as that is how many hours one exempt nurse can report in PBJ when factoring in meal breaks.
To not double count and over inflate the number of staff needed and costs, total values were calculated that factor in how meeting one requirement will help meet another. For example, a center that is one RN short of the 24/7 requirement and four short of the 0.55 HPRD requirement will only count as four nurses needed in the total calculations.
To calculate the annual cost per FTE for a facility, a center’s latest full
Medicare Cost Report from either fiscal year 2022 or 2023 was used. The average between direct and contract hourly rate including fringe benefits was used (Worksheet S-3, Part V). Wages in the bottom 1% and top 99% were excluded as outliers. For centers with missing cost report data, their state average wage was used. An annual four percent inflation adjustment was used to account for the two-year delay in the first requirements coming into effect.
The resident impact analysis calculates by how much the average daily census would need to decrease in order to meet the requirements based on the current staffing level. It only reflects the three HPRD requirements, as the 24/7 RN requirement does not depend on census.