On April 4, 2023, the Centers for Medicare & Medicaid Services (CMS) issued the Fiscal Year (FY) 2024 Skilled Nursing Facility Prospective Payment System (SNF PPS) Proposed Rule, (CMS 1779-P), which outlined key changes to payment rates, quality reporting, and value-based purchasing. However, it did not include a minimum staffing policy for nursing facilities. This is despite the fact that, in October of 2022, the Biden Administration announced its plans to enforce minimum staffing requirements by spring of 2023 as a means of improving the quality of care in nursing homes.
What would be the impact of a minimum staffing policy? Industry stakeholders immediately grew concerned about the potential impact on skilled nursing facilities’ financial stability and the displacement risk for nursing home residents.
According to a report by the American Health Care Association (AHCA), a proposed minimum staffing requirement of 4.1 hours of nursing care per resident day would cost nursing home operators $11.3 billion annually. Further, the industry would need an additional 191,000 nurses and nurse aides to meet this standard, all in the face of increased labor costs and persistent nationwide workforce shortages of nurses.
The report also noted the move would result in an even higher number of facilities operating with negative margins—currently the number is 60%—or being forced to close down. In turn, the residents who were supposed to be protected by such a rule change would instead be left vulnerable with no one to care for them. And because 94% of the nation’s 15,500 nursing homes would be unable to comply with the 4.1-hours-per-resident-day standard due to inadequate staffing, up to 450,000 nursing home residents would be put at risk.
Where do we currently stand on minimum staffing requirements? For now, the CMS is continuing to review the feedback and evidence gathered from the comment solicitation and mixed-methods study and use it to shape proposals for minimum direct care staffing requirements in nursing homes.
As for the other changes, the FY 2024 SNF PPS Proposed Rule brings several updates. One such update is the implementation of the second phase of the Patient-Driven Payment Model (PDPM) parity adjustment recalibration, which is expected to improve payment accuracy and better support the diverse needs of skilled nursing facility residents.
Other updates include changes to diagnosis code mappings, the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program, which aim to enhance the efficiency and effectiveness of the payment system while promoting high-quality care and improved patient outcomes.