Updated Report: Additional Funding for Workers Needed to Meet a Potential Nursing Home Staffing Minimum Mandate

CLA estimates $11.3 billion needed each year to hire 191,000 caregivers

Workforce; Advocacy
​WASHINGTON, D.C. – The American Health Care Association (AHCA), representing more than 14,000 nursing homes and other long term care facilities across the country, released an updated report from accounting and consulting firm CLA (CliftonLarsonAllen LLP) regarding a potential federal staffing mandate for America’s nursing homes. Due to increasing labor costs and pervasive workforce shortages nationwide, CLA now estimates more than 191,000 nurses and nurse’s aides are needed at the annual cost of $11.3 billion in order for nursing homes to meet a staffing minimum of 4.1 hours per resident day (HPRD). This is up from July 2022, when CLA estimated an additional 187,000 caregivers and an annual cost of $10 billion would be required. 
The report also found:
  • 94 percent of nursing homes would be unable to comply with a potential 4.1 HPRD staffing minimum.
  • Nearly 450,000 residents (more than one-third) may be at risk of displacement if facilities are unable to increase their workforce and must reduce their census in order to comply with a 4.1 HPRD staffing minimum.
“This report once again highlights how our nation’s policymakers should be investing in our long term caregivers, not mandating quotas,” said Mark Parkinson, president & CEO of AHCA. “Nursing homes have been doing everything they can to recruit and retain staff—including increasing wages—but it has not been enough to stem the tide. If Washington wants to increase staffing in nursing homes, then they need to put their money where their mouth is. Otherwise, we’ll fail to address the underlying issue here, and our residents will have fewer long term care options.” 

The CLA report models three different minimum staffing requirement scenarios to estimate the additional staff necessary as well as the costs associated due to hourly wages. The 4.1 HPRD model (Scenario 1) is frequently referenced by industry stakeholders due to a 2001 study evaluating staffing levels in nursing homes.
Nursing homes cannot absorb the costs associated with a federal staffing mandate on their own. The majority of residents rely on Medicaid and Medicare. The sector is chronically underfunded and now facing increased costs due to COVID and inflation. CLA also references a separate report, which found that nearly 60 percent of skilled nursing facilities are currently operating with negative margins.
“The additional burden of meeting minimum staffing requirements with no funding mechanism will potentially increase the number of facilities operating with negative margins,” said Deb Emerson, Principal at CLA. “Although there have been improvements in workforce availability in some areas of the country, nationally nursing homes are still challenged to find the appropriate workforce. If nursing homes are unable to increase their workforce, hundreds of thousands of residents could be impacted by census reductions.” 
The Biden Administration has proposed establishing a minimum staffing requirement for nursing homes without corresponding resources despite the industry already facing a historic staffing crisis and the country facing a nationwide nursing shortage. Over the course of the pandemic, nursing homes have disproportionally lost more workers than any other health care sector—over 200,000. As a result, more than 6 in 10 nursing homes say they must limit new patient admissions, and nearly three-quarters are concerned their facility may have to close entirely due to staffing shortages. 
“Unfunded staffing mandates do not create jobs or attract individuals to apply. Investing in our caregivers, developing recruitment programs, and building a pipeline of caregivers will help us rebuild the long term care workforce,” said Holly Harmon, RN, AHCA’s senior vice president of quality, regulatory and clinical services
In March 2021, AHCA put forth a comprehensive set of strategies to addressing the industry’s workforce challenges as part of its reform agenda, the Care for Our Seniors Act. It includes proposals such as assistance programs to recruit caregivers, career development opportunities to retain staff, and investments in higher learning institutions to train more nurses. 
View the CLA report HERE.​​