Retirement Planning

As The Policy Debate Over Nursing Homes Heats Up, Operators Are On The Defensive

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In the wake of the devastating effects of covid-19 on nursing home residents and their staffs, pressure is building on long-term care facilities from congressional Democrats who are exploring ways to accelerate the shift of Medicaid long-term services and supports from nursing facilities to home and community based services (HCBS).  Some states are demanding tougher health and safety rules. And outside experts are pressing for better transparency and tougher quality requirements, especially for chains.  

During his campaign, President Biden proposed a $450 billion increase over 10 years in the federal share of Medicaid for community-based care only. Though he has said little about the idea since, the pandemic relief bill passed this month included a federal funding boost of about $10 billion just for this year. And it sent a strong message that Hill Democrats want more Medicaid beneficiaries cared for at home.

Some lawmakers are prepared to go further than that. In February, 18 Democratic senators, including Senate Aging Committee Chair Bob Casey (D-PA), urged Biden to push for the full $450 billion. The likely vehicle: A big infrastructure/economic stimulus bill the Administration may roll out this summer.

Making home care the Medicaid default

This week, three of those senators—Casey, Maggie Hassan of New Hampshire, and Sherrod Brown of Ohio—circulated a draft plan that would do even more. Under their plan, nursing homes would no longer be the default setting for Medicaid long-term care. Instead, Medicaid would provide care in people’s homes unless there was a medical or other reason not to.

States, which provide direct oversight of nursing facilities, are moving towards tougher regulation as well. Connecticut, for example, is considering legislation to require minimum staffing levels and more rigorous infection controls.

And it isn’t just politicians. Last month, five of the nation’s most respected nursing home experts wrote an essay in the journal Health Affairs calling for a dramatic increase in government oversight of nursing facilities. They identified potential financial conflicts of interest in many for-profit facilities and urged both increased financial transparency and tougher rules governing acquisitions of facilities.

Charlene Harrington of the University of California, San Francisco; Anne Montgomery of  Altarum; Terris King, former director of minority health at the Centers for Medicare and Medicaid Services; David Grabowski of Harvard Medical School; and Michael Wasserman, chair of the Public Policy Committee of the California Association of Long Term Care Medicine proposed several reforms: 

Among them: Much tougher quality oversight and more detailed disclosure of related party business relationships of the owners of long-term care facilities. Currently, some operators pay large fees to vendors that they own, at least in part, for services such as nursing and facility management. They also often lease the facilities at high rents from real estate investment trusts in which they may have an interest.

The authors also urged the government to consider quality and financial standards of both chains and individual facilities before approving changes in ownership. And they’d bar owners with a history of poor quality from acquiring new facilities.    

The industry response

In response this growing pressure, the two trade associations representing nursing homes issued a joint statement this week outlining their legislative priorities. The American Health Care Assn (AHCA) that represents mostly for-profit operators, and Leading Age, whose members are non-profits, released a set of general principles aimed mostly at convincing Congress to boost Medicare and Medicaid funding for the facilities.

The document largely asserted that illness and death in long-term care facilities were due to factors beyond the facilities’ control. It blamed lack of resources, and government’s failure to provide sufficient personal protective equipment (PPE) and rapid and accurate testing. It said, “even the best nursing homes with the most rigorous infection control practices could not stop their highly contagious, invisible enemy.”

With extra government funding, the industry said it would take several steps to improve care. These included enhanced infection control, registered nurses on staff (though not on-duty) 24 hours a day, a minimum 30 day supply of PPE, and initiatives to hire and retain staff. These included government-funded educational loan forgiveness and tax credits, support for housing and child care, and subsidies for training programs. It did not include higher pay or better benefits.

The end of shared rooms?

The plan urged more effective—though undefined— government oversight of facilities, initiatives to improve or close low-quality sites, and better measures of resident satisfaction. Finally, perhaps recognizing what is likely to be a regulatory inevitability, the groups urged a study to consider the elimination of shared rooms in nursing homes.

There is a truism in politics: You can’t beat something with nothing. The nursing home industry realizes that pressure is building for big changes in regulation and payment. Some may try to buy time and hope that outrage over the many pandemic deaths will subside. But more likely, the industry will try to temper what are likely to be major changes in the way government regulates nursing homes.

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