The price tag is going up on a potential federal staffing mandate.
A standard of 4.1 hours per patient per day could cost the skilled nursing sector $11.7 billion annually, according to an updated analysis by consulting and advisory firm CliftonLarsonAllen.
That’s up from a projected $11.3 billion in January, and an increase of $1.7 billion in the 13 months since CLA issued its first estimate in mid-2022.
The potential cost has been pushed higher by inflation and continued wage pressures, as the current staffing shortage continues to play out nationwide.
“People are starting to make the connection to say, if we implement the staffing mandate, that problem is going to get way worse,” said Cory Rutledge (pictured), chief assurance officer at CliftonLarsonAllen. “As we sit here today, less than 10% of skilled nursing facilities are at 4.1 hours per patient day. … There are really two levers to pull to get to a 4.1: You either hire a lot more people, which don’t exist … or you discharge residents to decrease the denominator.”
AHCA on Wednesday forecast some 446,000 residents would be displaced if a 4.1 standard came into effect.
“That’s thousands of the most frail, older adults in our nation that would have to go someplace else and I don’t know where that place is,” Rutledge said in response Friday.
The added wage pressure on Medicaid providers with smaller margins, especially in rural and urban communities, could also lead to more closures, he added.
With the price so high and potential negative implications of a staffing mandate emerging, Rutledge suggested several equal or less-costly solutions the federal government could invest in to improve quality of care in nursing homes. Chief among them were investments that reduce the sector’s dependency on agency staff.
“In our view, the headline should not be about the 4.1 hours per patient day staffing mandate,” he said. “Instead, the headline should be that contract labor is correlated with poor nursing home quality. That’s the correlation. That’s the problem that we need to fix, and that is a problem that is actually less expensive and, in my view, easier to fix.”
A CLA analysis found that 1-star rated facilities used 21/2 times as much contracted staff as 5-star rated facilities. Rutledge said that trend continued across states, with predictable steps and patterns.
In Illinois, for instance, CLA found that 1-star facilities filled 15.6% of their jobs with temporary workers, while 5-star facilities used just 3.8%.
“If we really want to improve quality without diminishing access, we should be investing in a whole lot of things to improve employee engagement and reducing turnover, which would reduce the use of contract labor, which would improve quality in nursing homes.”
Pressed on the idea that quality concerns existed long before the pandemic-era explosion of agency staff placements, Rutledge said he didn’t expect reducing agency would be the only solution. But it would promote better care quality by bringing consistent staffing (rather than just more staffing) to facilities, he said.
He also suggested the government better finance nursing homes so that they can afford to invest in remote patient monitoring, predictive analytics and other non-staff resources that acute providers are already using to elevate care. Even promoting wellness and support programs that help keep seniors out of nursing homes for longer would be a better way to improve care than to dictate universal staffing levels, he added.
“We’re never going to get perfection,” Rutledge said. “What we’re seeking for is progress. In order to make progress on this issue that’s facing our society, we need to have practical solutions. I would say a 4.1 hours per patient day staffing mandate is simply not a practical solution. Let’s go on down the line to find something that is practical and moves the needle.”
