IN DEPTH

On February 28, 2022, the White House issued a fact sheet outlining several efforts aimed to increase safety, accountability, oversight, and transparency in the senior services industry (Fact Sheet). Although the Fact Sheet’s initiatives have not yet been implemented, President Biden reiterated his administration’s focus on nursing home reform during his March 1, 2022, State of the Union address, stating that “Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and that they expect.” Accordingly, the efforts described in the Fact Sheet provide stakeholders with a peek into the regulatory crystal ball of the governmental efforts that may be forthcoming, either through new laws, regulatory action, policy changes, enforcement activities or sub-regulatory guidance. We highlight the Fact Sheet’s proposals in this alert.

1.  Ensuring taxpayer dollars support nursing homes that provide safe, adequate and dignified care

The Fact Sheet describes four new initiatives that aim to improve quality of care in nursing homes. The most significant initiatives address minimum staffing requirements and the promotion of single-occupancy rooms. Though the final form of these initiatives is yet to be determined, the Centers for Medicare & Medicaid Services (CMS) has stated that it intends to accomplish these objectives through a combination of requirements and incentives.

• Minimum Nursing Home Staffing Requirements. Within the next year, CMS plans to issue a proposed rule regarding minimum staffing requirements for nursing homes. This rule will consider both staff-patient ratios and the types of staffing necessary to ensure quality care at nursing homes. Prior to issuing the proposed rule, CMS will undertake a new research study on staffing levels and quality of care outcomes. This rule is likely to be the most significant – and burdensome – policy priority outlined in the statement. At this time, it is not clear whether the proposed rule will be a blanket policy, or whether it will include staffing variation by region, care programs, or other factors. Regardless, we anticipate that compliance with the eventual final rule could result in significant operational changes for nursing homes.

• Promoting Single-Occupancy Rooms. CMS intends to “explore” ways to promote single-occupancy rooms for nursing home residents and accelerate phase-outs of rooms with three or more residents. This initiative is most clearly responsive to COVID-19 infection control challenges.  Though CMS has not indicated how it will implement this initiative, this could result in a number of potential rules, such as incentive payments based on single-occupancy rooms, or possible caps on multi-occupancy rooms through life safety or other environment of care-focused requirements.

• Skilled Nursing Facility Value-Based Purchasing Program (SNF-VBP) Expansion.  Currently, the SNF-VBP financially awards SNFs for performance quality of care measures, which are primarily measured by hospital readmission rates.  As part of the initiative, CMS will expand the SNF-VBP to incentivize other quality performance measures, including (i) staff turnover rates; (ii) weekend staffing levels; (iii) measures that capture the resident experience; and (iv) staffing adequacy.

• Further Reducing the Use of Antipsychotic Drugs in Nursing Homes. This measure is targeted at reducing what CMS considers to be the over-use of antipsychotic medications in nursing homes.  This measure can be seen as a complement to the CMS National Partnership to Improve Dementia Care in Nursing Homes, which targets antipsychotic drug prescribing practices as part of a broader effort to promote person-centered care for people with dementia.

2.  Enhancing accountability and oversight

Another of the Biden administration’s priorities is enhancing accountability and oversight of nursing homes by pursuing the following initiatives:

• Adequately Funding Inspection Activities and Increasing Scrutiny on a Greater Number of the Poorest Performers.  The White House is seeking Congressional approval to provide almost $500 million to CMS to increase the frequency of health and safety inspections performed at nursing homes.  Simultaneously with these inspections, CMS also intends to overhaul its existing Special Focus Facility (SFF) program, which currently identifies the poorest-performing nursing homes for enhanced scrutiny until such nursing homes are able to demonstrate adequate compliance with regulatory requirements.  Potential improvements to the SFF program will include (i) a renewed focus on more quickly effectuating meaningful changes for the residents of the poorest-performing nursing homes, (ii) increasing the scope of the SFF program to investigate more facilities, and (iii) higher penalties for deficient performers, including termination from participation in federal healthcare programs.

• Increasing Penalties. The Fact Sheet also announces intentions to increase penalties for poor-performing nursing homes, in the form of per-day fines becoming the default enforcement mechanism, while simultaneously increasing the ceiling of those per-day fines from $21,000 to $1,000,000.

• Increasing Accountability for Owners of Substandard Facilities.  In addition to the increased penalties, the Fact Sheet requests congressional approval to grant CMS new authority to ban historically non-compliant individuals and entities from contracting with federal healthcare programs for new or existing nursing homes.  Such bans would be based on a review of facilities that share the same owners or operators.

• Providing Additional Technical Assistance to Nursing Homes.  Lastly, CMS intends to make improved nursing home care a priority for Quality Improvement Organizations, which are contracted by CMS to assist providers with achieving meaningful quality of care improvements.  This will be accomplished by expanding both (i) on-demand trainings and information sharing around best practices and (ii) evidence-based assistance related to issues exacerbated by the pandemic.

3.  Increasing transparency

Increasing transparency of corporate owners and operators of nursing homes also remains a top priority for CMS, which it will effectuate by:

• Creating a Public Database of Owners and Operators. CMS intends to create a public registry of owners and operators of nursing homes and previous violations or noncompliance, easing agencies’ efforts to track and identify repeat offenders across state lines.

• Increasing Transparency of Ownership and Improvements to Nursing Home Care Compare. Along with the public registry, CMS will enhance the Nursing Home Care Compare website by tracking corporate ownership of nursing homes and reporting such ownership and operating data; displaying nursing homes’ compliance with minimum staffing ratios (described above); and making information easier to access and understand for consumers, with an emphasis on ensuring that ratings reflect verifiable (rather than self-reported) data. The White House is also requesting congressional approval for CMS to take enforcement action against facilities that submit incorrect information.

• Examining the Impact of Private Equity. Lastly, the federal government is evaluating the relationship between private investment and the nursing home sector to examine the role played by private equity buyers, real estate investment trusts (REITs), and other for-profit investors in the nursing home space.

4.  Pandemic preparedness

The COVID-19 pandemic exposed material emergency preparedness challenges experienced by nursing homes and long-term care facilities (LTCF) going forward.  Generally, CMS has stated its intention to integrate “lessons learned” into nursing home Requirements for Participation (Requirements). Updates may be expected in Requirements involving fire safety, infection control, and other resident-centered policies. In particular, CMS intends to increase infection prevention staffing requirements from the current standard that allows for infection prevention personnel to work part-time and/or offsite.

In the short term, the Biden administration has stated that the federal government will continue to provide and support COVID-19 testing, vaccinations, and boosters for both LTCF residents and staff and may reward facilities with higher resident vaccination and booster rates through existing quality payment programs.

CMS is also in the process of reviewing and overhauling emergency preparedness requirements at nursing homes and LTCFs, in the context of both future pandemics and weather-related natural disasters.  Nursing home patient deaths following hurricanes in Louisiana and Florida have likely motivated this effort, in addition to the ongoing impact of severe weather events and climate change.  Concurrently, CMS is working to “bolster the resiliency of the health care sector” in preparation for future pandemics and natural disasters.  While CMS has not provided any specific direction regarding these efforts, such an initiative could address medical staff pipelines, crisis capacity at healthcare facilities, the availability of emergency funds, and other wide-reaching matters.

5.  Pathways to Jobs

Recognizing the impact that the COVID-19 pandemic has had on the workforce generally, and nursing home staffing specifically, the Fact Sheet describes three efforts to alleviate labor shortages in nursing homes.

• Affordable Nurse Aide Training. CMS will require nursing homes to notify nurse aides about training reimbursement opportunities and will work with states to distribute and publicize free trainings.

• Link Medicaid Payments to Staffing. CMS will create guidance for states to promote competitive salaries and benefits and reward experience by demonstrating ways that Medicaid payments can be tied to adequate compensation.

• Launch National Nursing Career Pathways Campaign. CMS and the Department of Labor will collaborate with stakeholders to recruit and provide training to individuals interested in transitioning to nursing careers.

Conclusion

The Biden administration has lofty goals that are likely to be welcomed by nursing home quality advocates but that may be burdensome for nursing facility owners and operators to implement. As more information emerges and stakeholders have an opportunity to digest the White House’s announcements, we will continue to monitor and report any material considerations for the senior services industry.