Experts Question How Nursing Homes Will Pay For More Staff Amid Anticipated Minimum Staffing Mandate

The Biden administration is expected to issue a federal minimum staffing mandate for nursing homes. As the long term care sector continues to face a historic labor crisis, experts are questioning how the proposed mandate would address staffing shortages without resources or support.   
Many providers have already increased pay and benefits, which has been invaluable for workers and enabled nursing homes to try to compete in today’s challenging job market. This raises serious questions about the ability of programs like Medicaid and Medicare Advantage to keep pace. The mandate could require an estimated $10 billion per year for caregivers’ wages and benefits – and so far, the proposed mandate remains unfunded. 
David Grabowski, Ph.D., professor of health care policy at Harvard Medical School expressed concern about how facilities will pay for new staff. As a commissioner of the Medicare Payment Advisory Commission (MedPAC), he said at their meeting last week:
“I think in a vacuum this [federal staffing minimum] is a good policy, however – [but], how much dollars are in the system right now to kind of pay for this and how much new dollars are going to be necessary, how much of that's going to be Medicare and how much of that's going to be Medicaid. I think we’re probably gonna need some new dollars, ultimately, if these are meaningful staffing standards.”
Dr. Grabowski conveyed the same concerns about the need for additional funding earlier this year, saying:
“There is a huge national shortfall in nursing home workers right now. Nursing homes will need to raise wages to recruit additional staff. Where does this money for higher wages come from? There are no additional reimbursement dollars in the current [White House] reform package … I think there is a belief that some money will come from increased accountability of existing spending, but I am skeptical that this alone can fund the additional required staff, especially for a facility that largely cares for Medicaid residents… Thus, I think the minimum staffing standard is a step forward, but I am worried about how facilities will fund these new staff.” 
Mark J. Warshawsky, a senior fellow at the American Enterprise Institute (AEI), former deputy commissioner for Retirement and Disability Policy at the Social Security Administration and former vice-chairman of the 2013 Long-Term Care Commission, said a minimum staffing requirement “would amount to an unfunded mandate.” He explained:
“Because labor is the largest component of expense in operating a nursing home – and presuming that this requirement will be tougher than current state minimums and prevalent employment practices – costs to Medicare, Medicaid, other government programs and private paying residents and their families would surely increase. Moreover, this requirement would amount to an unfunded mandate because Medicaid payments to nursing homes are set and substantially funded by the states, and non-Medicaid residents pay for their care out of pocket.” 
A recent study by John R. Bowblis, PhD, Professor of Economics and Research Fellow at Miami University Department of Economics and Scripps Gerontology Center, concluded:
“Implementing this [staff time measurement] STM benchmark would cause most [nursing homes] NHs to increase nursing staff levels, but at the same time would increase their operating expenses. These increased expenses need to be offset by increased reimbursement from Medicare and Medicaid, otherwise a significant number of NHs will lose money and close.”
Rather than unrealistic, unfunded mandates that will result in more nursing homes closing, policymakers should focus on meaningful solutions to attract more caregivers to the field. The American Health Care Association (AHCA) and LeadingAge have developed a comprehensive reform proposal, the Care for Our Seniors Act, that provides solutions to rebuild and strengthen the long term care workforce through a variety of staff recruitment and retention programs. Our nation’s seniors deserve dedicated caregivers. It’s time to start investing in the frontline heroes who serve our most vulnerable population.   ​​