Nursing Homes: Need for a New Paradigm

Regulation | October 22, 2019 | by Barbara Gay

Nursing homes are facing a confluence of regulatory and financial developments that show the need for a redirection of public policies to ensure that Americans will have access to high-quality long-term care both now and in the future.

Recent regulatory and financial developments:

  • The Centers for Medicare and Medicaid Services (CMS) is set to begin rolling out its red hand stop sign icon, which beginning on October 23 will be posted on the Nursing Home Compare profile of nursing homes where abuse has been cited. We have contacted CMS to protest, and have generated a member campaign in opposition to the red hand icon. To date, over 1,500 LeadingAge members have sent this message to CMS; more messages will certainly be welcome.
  • On October 17, CMS issued a 154-page memo to states, ostensibly to "strengthen" the federal nursing home survey process. According to the memo, CMS will step up its oversight of state survey agencies, including new "state performance indicators" and with particular attention to states' handling of immediate jeopardy situations. While we favor timeliness and accuracy in surveys, we are concerned that state surveyors will feel even more pressure than they already do to "find" abuse and neglect and other serious deficiencies. Nursing homes do not need or deserve a more punitive approach to surveys than what they already have to contend with.
  • We are now just over five weeks away from the November 28 deadline for compliance with Phase III of the new requirements of participation. To date, CMS has issued no guidance to survey agencies or nursing homes on compliance with Phase III. CMS issued a proposed rule in July, attempting to delay some of the requirements. However, since that rule cannot be finalized before November 28, nursing homes will have to comply to the best of their ability with all the requirements as of that date. This is a bad situation for nursing homes, but it is worse for state survey agencies, which have not had any instruction as to how compliance with the RoPs III requirements is to be evaluated and cited. Citations under these requirements may well vary significantly from state to state and region to region. We have contacted CMS Administrator Seema Verma to urge that Phase III be delayed until nursing homes and survey agencies have received guidance on compliance with the requirements and have had a chance to bring all staff up to speed on them.
  • On October 10, LeadingAge Silver Partner CliftonLarsenAllen (CLA) issued its 34th Skilled Nursing Facility Costs Comparison and Industry Trends Report. The report notes that “an overall negative trend continues to plague skilled nursing operators.” CLA found that for the first time since they began collecting this data, “the median operating margin has dipped below zero (and currently sits at -0.1%).” According to the report, financial trends are leaving nursing homes struggling to generate enough cash flow to cover operations, forcing them to borrow more to meet basic expenses, and as a result having few resources to reinvest in their communities. CLA noted the number of news reports during this past year on closures, receiverships, and bankruptcies, “particularly in states where Medicaid rates are among the lowest in the country.”

During the last two years, LeadingAge has conducted town halls in all of the 38 states in which we have state partners. We have heard directly from nursing home members all over the country of the challenges posed by inadequate financing under public programs, the resulting difficulty in recruiting and retaining qualified caregivers at all levels of an organization, and the often counterproductive burden of the federal-state regulatory system.

In view of the immediate and long-range financial and regulatory challenges nursing homes are facing, LeadingAge is working on recommendations for policy changes that not only would help good nursing homes to survive but that also could be more effective in ensuring high quality care in all of the nation's nursing homes.

Nursing homes have a vital place in the continuum of services that many people need as they age. We will continue pushing for public policies that will ensure this form of long-term care remains available and that every nursing home will be a place where we or our family members will be willing to live if we come to need that level of care.