The Biden administration is considering a requirement that the nation’s 15,500 nursing homes spend most of their payments from Medicaid on direct care for residents and limit the amount that is used for operations, maintenance, and capital improvements or diverted to profits.
If adopted, it would be the first time the federal government insists that nursing homes devote the majority of Medicaid dollars to caring for residents.
The strategy, which has not yet been formally proposed, is among several steps officials are considering after the COVID-19 pandemic hit vulnerable nursing home residents especially hard. During the first 12 months of the pandemic, at least 34% of the people killed by the virus lived in nursing homes and other long-term care facilities even though residents of those facilities make up fewer than 1% of the U.S. population.
Medicaid, the federal-state health insurance program for low-income people, pays the bills for 62% of long-term care residents in nursing homes. In 2019, that totaled $50.8 billion. Medicare, which covers short-term nursing home visits for older adults or people with disabilities, spent $38.2 billion that year. (Officials have not included Medicare payments in their discussions of a direct care spending mandate.)
“The absolutely critical ingredient” for good care is sufficient staffing, Dan Tsai, a deputy administrator at the Centers for Medicare & Medicaid Services and Medicaid director, told KHN.
CMS requested public comments on a possible direct care spending mandate in its proposed update of nursing home payment policies and rates for next year. Tsai also spoke about it at a meeting with Illinois state officials, nursing home workers, residents, and relatives in Chicago in April.
Studies have found a strong connection between staffing levels and care. CMS doesn’t require specific numbers of nurses and other staff members, although some states do.
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“We want to make sure that the dollars get to the direct care workforce to ensure high-quality care,” Tsai told KHN.
To receive a government paycheck, nursing homes must follow dozens of requirements aimed at ensuring high-quality care. They can be penalized for violations. But federal investigations have found that inspectors can miss serious problems and that inspections don’t consistently meet CMS standards. Infection control has been one of the most common violations.
In its request for public comment, CMS asked several questions, including: “Is there evidence that resources that could be spent on staffing are instead being used on expenses that are not necessary to quality patient care?”
The federal interest follows laws enacted in three states — Massachusetts, New Jersey, and New York — to mandate spending on care. Massachusetts requires nursing homes to spend at …….