CMS Finalizes Rule Establishing Minimum Staffing Standards for Long-Term Care Facilities

On April 22, 2024, the Centers for Medicare & Medicaid Services (CMS) issued Medicare and Medicaid Programs: Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting, a final rule that, in part, sets new minimum staffing standards for long-term care facilities (the “Minimum Staffing Rule”).^[1]

This Insight examines the Minimum Staffing Rule’s requirements for owners and operators of long-term care facilities and analyzes their implications for the long-term care system.

Introduction

This Minimum Staffing Rule revises existing federal regulations and creates new minimum staffing standards for long-term care facilities that participate in the Medicaid and Medicare programs. In response to the staffing standards in CMS’s proposed rule, industry stakeholders voiced concerns that the new requirements would be difficult or impossible to meet due to insufficient workforce levels and that they would create an unsustainable cost burden. Nevertheless, CMS finalized the new minimum staffing requirements. CMS justified its decision by arguing that these new minimum standards will help remedy discrepancies in care outcomes for residents of long-term care facilities, mitigate—if not outright resolve—staff burnout, and address poor care delivery resulting from severe understaffing.

Key highlights that will have an impact on owners and operators of long-term care facilities include the following:

Facilities will be required to provide a total of 3.48 hours per resident day (HPRD) of nursing care to its residents.
Of those 3.48 hours, at a minimum, 0.55 hours per day must consist of registered nurse (RN) care, and 2.45 hours per day must consist of nurse aide (NA) care.
HPRD will be calculated by dividing the total number of hours worked by each type of staff by the total number of a facility’s residents.
Facilities must have an RN onsite 24 hours a day, seven days a week (“24/7”), to provide care to facility residents. This expands upon the existing requirement of having an RN onsite for eight consecutive hours per day.
Facilities will face phased compliance deadlines for the staffing requirements ranging between two and five years, depending on whether the facility is located in a rural or urban setting.
Facilities can apply for and obtain exemptions from the new standards if they meet certain criteria.

The Biden Administration’s Call to Action

In February 2022, the Biden administration (the “Administration”) called attention to the importance of individual dignity and respect when accessing health care services. Noting the needs of older adults, disabled adults, and other residents of nursing homes, the Administration set a general principle that these communities deserve access to “reliable, high-quality care.”[2] This principle helped form the basis for the Administration’s policy goals to reform the delivery and quality of long-term care. Specifically, President Biden called for staffing reforms so that long-term care facilities have sufficient trained staff to provide high-quality care, holding bad actors in the long-term care industry responsible (including cutting them off from government-funded programs) and providing consumers with information on conditions in care facilities so that they can make the right choices for themselves and their loved ones. As described in the Administration’s press release and corroborated by CMS during the rulemaking process, these policy goals stem from complex and troubling issues in the provision of long-term care.

First, the Administration highlighted the impact of the COVID-19 pandemic. Citing data from the U.S. Department of Health and Human Services, the Administration noted that more than 1.4 million people lived in over 15,500 Medicare- and Medicaid-certified care facilities across the country, and, in a two-year window, more than 200,000 residents and facility staff had died from COVID-19. In other words, nearly a quarter of all COVID-19 deaths in the United States were of residents or staff in a long-term care facility.[3]

Next, the Administration drew attention to the “tens of billions of federal taxpayer dollars” that such care facilities receive annually and argued that, despite these funds, care quality remains inconsistent and unacceptable, resulting in avoidable harm to residents.

Lastly, the Administration turned its attention to private equity and its activity in the long-term care industry. This earned a special callout to the growing number of private equity-owned facilities and research that suggests not just a correlation between private equity and negative outcomes for residents of long-term care facilities but also an increase in Medicare costs.

In light of these concerns, the Administration called for robust action to fix what it perceived as a problem rooted in insufficient staffing, a lack of sufficient trained personnel to provide quality care, and opacity in the market. Specific proposals included setting minimum staffing standards and reducing overcrowding in care facilities, investing in compliance and enforcement activities, and improving transparency for consumers in the face of increasing corporate ownership.

The Minimum Staffing Rule & Setting New Minimum Standards

This presidential call to action led to a two-year-long regulatory rulemaking process that received more than 46,000 comments from a wide range of sources. Commenters included residents of care facilities and their loved ones, current and former care facility staff, and industry operators and other stakeholders. Many comments detailed troubling personal stories that illustrated the themes and concerns raised in the Administration’s original statements. For example, commenters relayed stories and instances of neglect, such as being left abandoned during a fire alarm or not receiving assistance to go to the bathroom. Other commenters drew attention to some facilities struggling to remain solvent, staff burnout, and the demands placed on an over-extended and dwindling workforce. Striking a wholly different chord, some commenters questioned CMS’s authority and suggested the agency lacks any statutory basis to promulgate these regulations.

In response, CMS seemingly acknowledged the negative outcomes appearing throughout the long-term care industry, defended its action under the authority of sections 1819 and 1919 of the Social Security Act, and noted its concerns over cases of severe understaffing appearing to be correlated with significant profitability of some care facilities. Proceeding from that perspective, CMS offered the Minimum Staffing Rule as a means of addressing the apparent lack of sufficient numbers of trained staff to render the care and services necessary in long-term care facilities.

Staffing Hours Per Resident Day

The Minimum Staffing Rule begins by revising 42 CFR § 483.5[4] to introduce a key metric: staffing hours per resident day, or HPRD. CMS defines HPRD as “the total number of hours worked by each type of staff divided by the total number of residents as calculated by CMS.”[5] This definition, which received no public comment, is critical to understanding the exact requirements imposed under the Minimum Staffing Rule.

With the HPRD definition in mind, the Minimum Staffing Rule next finalizes HPRD requirements for facilities according to staff classifications. Initially, CMS proposed changes to 42 CFR § 483.35(a)(1)(i) and (ii) to require a minimum standard of 0.55 HPRD of RN services and 2.45 HPRD of NA services. That is, the facility would be required to provide residents with 0.55 hours per resident per day of RN services and 2.45 hours per resident per day of NA services, at a minimum. CMS initially viewed this as a floor and would have required additional personnel, such as a licensed vocational nurse, a licensed practical nurse, and other non-clinical staff. Some commenters suggested this would be insufficient and instead recommended that CMS impose a much higher standard of 0.75 HPRD for RNs, 2.8 HPRD for NAs, and 4.1 HPRD for total nursing staff.

Hewing closer to its initial proposal and rejecting the higher and arguably more burdensome standards suggested by commenters, CMS finalized a rule that will require a minimum total nurse staffing standard of 3.48 HPRD. This 3.48 HPRD must consist of at least 0.55 HPRD of RN services and 2.45 HPRD of NA services. Using the HPRD definition in section 483.5, a facility could be expected to determine compliance with the new HPRD requirements by taking the total number of staff in a given classification (i.e., RNs or NAs), calculating the number of hours that staff classification works per day, and then dividing that number by the CMS resident population figure. If the product is at least the minimum for each classification, then the facility would appear to be compliant with the new standards.

One thing to note: Facilities should be aware of incomplete guidance from CMS on calculating staffing levels. Initially, CMS proposed that facilities be limited to using the most recent quarterly staffing data reported to the Payroll-Based Journal system under 42 CFR § 483.70(p),[6] but that was not incorporated into the Minimum Staffing Rule. This, of course, is relevant because of the potential for staff turnover and fluctuations in facility staffing. Because of the potential for staffing fluctuations, as well as the lack of clear temporal limits from CMS on what staffing data can be relied upon, facilities should consult their legal counsel when determining their RN and NA staffing levels for purposes of calculating HPRD compliance.

Registered Nurse Requirements

Building off the HPRD requirements, the Minimum Staffing Rule next imposes staffing standards specifically for RN services. Under pre-existing regulations, facilities were required to have a single RN onsite for eight consecutive hours, seven days a week.[7] In practice, this meant a facility needed to have an RN onsite for eight consecutive hours once per day, usually matching up with a single working shift. The Minimum Staffing Rule, however, sets a more stringent standard for facilities and will now require an onsite RN who is available to provide direct resident care 24/7.

At its outset, this proposed change drew significant comment from the public, oftentimes raising concerns over staffing and workforce challenges and the shortage of available or interested RNs willing to work in long-term care settings. Perhaps as a result of those comments, CMS contemplated two ways of making compliance easier and more realistic for facilities. First, a facility can satisfy the new 24/7 requirement by utilizing its “Director of Nursing” or any person in a functionally similar role. This flexibility is allowed so long as the Director of Nursing is also available to provide direct care to residents during that 24/7 window of time. Whether this is a realistic demand will depend on individual circumstances for each facility, but its availability may help make compliance easier.

The other available flexibility requires an exemption pursuant to section 483.35(e).[8] In this instance, facilities that qualify for a section 483.35(e) exemption will not need to have an RN onsite 24/7. Instead, these facilities can have an RN, nurse practitioner, physician assistant, or physician available to respond immediately to phone calls from the facility in lieu of the onsite 24/7 requirement. Like the HPRD requirements, CMS has left open certain questions on how this flexibility will work. For example, CMS has not specified if this professional must be employed by the facility or the facility’s owner. In other words, the Minimum Staffing Rule might permit facilities to contract with outside third parties for on-call services. Facilities looking to utilize this flexibility should consult with their legal counsel to determine eligibility under section 483.35(e) and compliance with it.

Hardship Exemptions from the HPRD Requirements

Mindful of the workforce challenges facing the long-term care industry, the Minimum Staffing Rule also has provisions that grant exemptions from the HPRD requirements. Under the Minimum Staffing Rule, the following exemptions will be available:

A facility may receive an exemption from the HPRD requirements if the supply of nursing staff is insufficient. Supply is insufficient whenever the provider-to-population ratio for the nursing workforce is 20 percent below the national average, as calculated by CMS according to data from the Bureau of Labor Statistics and the Census Bureau.
A facility may receive an exemption from the 0.55 RN HPRD requirement as well as an exemption from the onsite RN 24/7 requirement if the RN-to-population ratio in the area is a minimum of 20 percent below the national average, as calculated by CMS according to data from the Bureau of Labor Statistics and the Census Bureau.
A facility may receive an exemption from the 2.45 NA HPRD requirement if the NA-to-population ratio in the area is a minimum of 20 percent below the national average, as calculated by CMS according to data from the Bureau of Labor Statistics and the Census Bureau.

Facilities that receive any of the above exemptions must disclose the fact of that exemption, the extent to which the facility does not meet the minimum staffing requirements, and the timeframe during which the exemption applies. At a minimum, notice must be given by publicly posting this information in a prominent location in the facility and in a form and manner that is accessible and understandable to residents and resident representatives. Facilities will also be required to notify their state’s Office of the State Long-Term Care Ombudsman and provide residents with a statement reminding them of their rights to contact advocacy and oversight entities.

Securing an exemption is more than a mere matter of statistics, and CMS will use a multi-factor analysis to determine if facilities do indeed qualify for exemption relief. For these reasons, facilities should work carefully with their legal counsel to ensure they have demonstrated facts sufficient to earn an exemption.

Facility Assessments

Existing regulations require long-term care facilities to conduct assessments to help develop staffing plans that meet the needs of their residents. These requirements, detailed at 42 CFR § 483.70(e), require annual updates and the consideration of various factors to ensure responsive care to residents and proper function in the facility both in times of emergency and on a daily basis.

Under the Minimum Staffing Rule, CMS will re-number the facility assessment requirements as 42 CFR § 483.71. CMS is further directing facilities to consider residents’ behavioral health needs when conducting a facility assessment. These new facility assessment procedures will also require the participation of nursing home leadership and management, such as the facility’s governing body, medical director, director of nursing, and direct care staff and their representatives. Facilities will also need to solicit and consider input from residents, resident representatives, family members, and representatives of direct care staff.

Implementation Timelines

Each of these new requirements has the potential to present significant challenges to long-term care facilities. Fortunately for the long-term care industry, the Minimum Staffing Rule will be phased in over an extended period of time, thereby giving facilities an opportunity to recruit and expand their staff and pursue advocacy and negotiations at the federal and state levels on reimbursement levels.

Using the Office of Management and Budget’s definition of “rural,”[9] CMS will grant rural facilities the following timeline for compliance with the Minimum Staffing Rule:

Facilities will have 90 days from the date of publication of the Minimum Staffing Rule to comply with the new facility assessment provisions at 42 CFR § 483.71.
Facilities will have three years from the date of publication of the Minimum Staffing Rule to comply with the 3.48 HPRD and the 24/7 onsite RN requirements at section 483.35(b)(1) and 483.35(c)(1), respectively.
Facilities will have five years from the date of publication of the Minimum Staffing Rule to comply with the more specific 0.55 RN HPRD and 2.45 NA HPRD requirements at section 483.35(b)(1)(i) and (ii), respectively.

CMS will use the following timeline for all non-rural facilities:

Facilities will have 90 days from the date of publication of the Minimum Staffing Rule to comply with the new facility assessment provisions at 42 CFR § 483.71.
Facilities will have two years from the date of publication of the Minimum Staffing Rule to comply with the 3.48 HPRD and the 24/7 onsite RN requirements at section 483.35(b)(1) and 483.35(c)(1), respectively.
Facilities will have three years from the date of publication of the Minimum Staffing Rule to comply with the more specific 0.55 RN HPRD and 2.45 NA HPRD requirements at section 483.35(b)(1)(i) and (ii), respectively.

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This Insight was authored by Jeremy A. Avila, Melissa A. Borrelli, Kevin J. Malone, John M. Puente, and James M. Reilly. For additional information about the issues discussed in this Insight, please contact one of the authors or the Epstein Becker Green Health Care and Life Sciences attorney who regularly handles your legal matters.

ENDNOTES

[1] This Insight focuses on the changing staffing requirements long-term care facilities will face as a result of the new Minimum Staffing Rule and does not detail the payment transparency provisions, which focus on financial transparency for consumers.

[2] White House FACT SHEET: Protecting Seniors by Improving Safety and Quality of Care in the Nation’s Nursing Homes, Feb. 28, 2022, available at https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.

[3] See https://www.kff.org/policy-watch/over-200000-residents-and-staff-in-long-term-care-facilities-have-died-from-covid-19/.

[4] All further citations are to Title 42 of the Code of Federal Regulations unless stated otherwise.

[5] See, e.g., https://data.cms.gov/provider-data/dataset/4pq5-n9py.

[6] Available at https://www.cms.gov/medicare/quality/nursing-home-improvement/staffing-data-submission.

[7] See 42 CFR § 483.35(b)(1).

[8] The Minimum Staffing Rule will renumber section 435.35(e) as section 483.35(f); therefore, facilities will need to seek exemption relief under subsection (f) rather than the existing subsection (e).

[9] See https://www.hrsa.gov/rural-health/about-us/what-is-rural.