Thanks to our partnership with LeadingAge New York, all LeadingAge nursing home members can estimate how many staff members they will need to hire and what the cost would be for the first year, if the proposed Centers for Medicare & Medicaid Services (CMS) staffing ratios regulation is finalized in its current form. Since the proposed rules are considered by CMS as a minimum or a “floor,” the estimates in this member-only data table are potentially lower than the actual costs. These estimates are based on actual staffing and spending data, as CMS used quarterly estimates.
The proposed rule would not be viable at a cost of $4 billion in the first year if there is no additional funding and the nation lacks a pool of qualified applicants for open and new positions. At over $7 billion the first year, the futility of mandating and impossible standard becomes even more apparent.
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Methodology
Skilled Nursing Facility Data
Hourly Wages
To calculate the cost estimates, hourly wage data from the 2021 SNF Medicare Cost data was retrieved for each provider SNF for RNs, LPNs, and aides with separate numbers for employees (this includes fringe benefits) and contractors. Outliers for these hourly wages were determined by flagging any hourly wage that was 1.5 times the interquartile range (IQR) outside of the IQR for their respective state. If a provider had an outlier hourly wage for a nurse type (i.e., RN, LPN, Aide) and employee type (i.e., employee, contractor) combination or did not have hourly wage data in the 2021 Medicare Cost data, the state median hourly wage for this nurse type/employee type was used instead. If the state median hourly wage was an outlier, using the same IQR method above, among the other state median hourly wages, the national median hourly wage was used instead.
Hours Needed
For each day in Q1 2023, the number of hours needed to get to 0.55 hours per resident day for RNs and 2.45 hours per resident day for aides was calculated using the resident count for each respective day. These hours were totaled by provider and nurse type. If a provider was not included in the PBJ data, their data is listed as “Missing.” For the proposed standard of an RN working 24 hours per day, seven days per week, there is no shift-level data in the PBJ detail data to make this determination. What can be determined is that if a provider did not have at least 24 hours of an RN per day, they would not be able to meet this standard. The calculation to meet the 24-hour RN standard first assumed that RN hours were at least 0.55 hours per resident day, then any additional hours needed to get up to 24 hours of RN were calculated. This was only pertinent to SNFs with fewer number of residents. Since this analysis is estimating the annual cost, the resulting numbers were multiplied by four since the PBJ data only included one quarter.
Contract Percentage
Since there are two hourly wages for each nurse type (i.e., employee, contractor) the percentage of contract staff for each nurse type was calculated for each provider. This number was to be used in calculating cost later to apply the appropriate amount of contract hourly wages vs. employee hourly wages for each nurse type based on the provider’s specific breakdown of employees vs. contractors.
Inflation Adjustment
To adjust the hourly wages for inflation from 2021 to 2023, the inflation rate was calculated to be 113% based on the consumer price index from 2021 to 2023.
Costs to Meet Standard
The estimated cost to meet a particular standard is:
(HoursNeeded * %Contract * HourlyWageContract + HoursNeeded * ( 1 – %Contract ) *HourlyWageEmployee) * InflationAdjustment
This formula was used for each of the three proposed minimum staffing standards. The costs to meet each standard were totaled to estimate the total cost to meet the three proposed standards.
State Data and State Data by Ownership
For both worksheets with state-level aggregates, most of the numbers are simply totals or counts aggregated by state or aggregated at the national level, but due to missing values for some providers, each field is adjusted for these missing values (see below).
Adjustments for Missing Data Fields
Some providers did not have records in the PBJ data, and some providers had PBJ data but did not have data for each of the nurse types in the PBJ employee detail data. Due to the missing data, the state and national level aggregates were adjusted for missing data using the following general strategy:
Field to be adjusted * ( 1 + ( Count of providers missing field / Count of providers ) )
Per SNF Calculations
For the total cost per SNF, this is the total cost divided by the number of providers in each state or nationally to give an estimated per-provider impact. This is a high-level estimate that assumes every provider has the same number of missing hours, which is not the case. For provider-level impact, the SNF data worksheet should be used. This per-SNF calculation can be used a general high perspective view of the impact for the state.
Data Sources
The data for this analysis is from the following four datasets:
