Workforce, Funding Issues Complicate Nursing Home Staffing Push

The Biden administration’s move to beef up staffing at US nursing homes faces a slew of demographic, financial, and workforce headwinds that have proved insurmountable in the past and threaten to derail the effort in the future.

Over 1,000 nursing homes were cited for insufficient staffing in 2022, and roughly 75% would fail to meet the mandatory staffing levels proposed by the Centers for Medicare & Medicaid Services. The industry’s leading trade group says the proposal requires facilities to hire an estimated 80,000 nursing aides who feed, bathe, and dress nursing home residents.

But the already thinning ranks of these essential workers are expected to shrink by more than 17,000 from 2021 to 2031, despite a projected 769,000 job openings over that time, according to federal estimates. Low pay, spotty benefits, high turnover, and a difficult work environment make nursing aides a tough job to fill.

“It’s a hard job. It’s a dangerous job. And it’s undervalued. These are the primary reasons workers don’t take these jobs and don’t stay in these jobs,” said Robert Espinoza, executive vice president of policy at PHI, which advocates for caregivers.

While nursing home usage declines amid a rising preference for home-based care, finding and keeping enough nursing assistants—who provide the bulk of daily resident care—will remain a challenge as the facilities take on more residents with dementia, Alzheimer’s disease, and other complex conditions that require more attention.

“If you’re somebody with dementia who can’t get out of bed, you need a very specific type of worker who has been trained,” Espinoza said.

Scholarships, Tuition Reimbursement

To help provide that training, the CMS is proposing more than $75 million in scholarships and tuition reimbursements to help people obtain their nursing license or degree and work in nursing homes. In addition to a shortage of nursing aides, the industry also needs more registered nurses and licensed practical nurses who round out the direct care workforce.

The federal Health Resources and Services Administration (HRSA) has awarded more than $100 million to train more nurses.

The proposed staffing mandate would set a minimum staffing level for registered nurses and nursing aides. However, it would provide no federal funding to help providers meet the new standards.

While the $75 million for nurse training is a “great start,” it may not be sufficient because it “will need to be spread across a number of potential workers,” David Grabowski, a professor of health-care policy at Harvard Medical School, said in an email. “I would expect the need for additional investments down the road.”

Those investments would have to be significant, said Mark Parkinson, president and CEO of the American Health Care Association and the National Center for Assisted Living.

The CMS staffing mandate would require an additional 22,000 registered nurses, but the $75 million would only fund the four-year education of roughly 750 RNs, Parkinson said. “Seven hundred fifty nurses in a country where we have over 15,000 nursing homes doesn’t come close to addressing the problem,” he said.

The funding proposal is “not meaningful,” Parkinson added. “It’s a political tactic to say they’re doing something, but it will have no impact in the real world.”

Individuals can also become a registered nurse in two years by earning an associate degree in nursing. A CMS spokesperson said roughly half of newly registered nurses obtain their degrees through these two-year programs, which are far less costly than four-year schools. The CMS also expects states to help fund the training effort for nurses.

Funding Alternatives

Adjusting Medicare or Medicaid reimbursement rates “according to the amount and quality of staffing” is an alternative funding option the CMS could consider, said an email from Ashvin Gandhi, an economist and assistant professor at the UCLA.

The agency could also create financial incentives for facilities to hire, train, and retain high-quality staff, Gandhi said. Both options would “motivate facilities to improve pay and conditions in order to recruit” more effectively, his email added.

If finalized, the proposed CMS rule would require a minimum nursing home staffing level of 2.45 “hours per resident day” or HPRD, for nursing aides, and 0.55 HPRD for registered nurses. HPRD is the “total number of hours worked by each type of staff divided by the total number of residents,” the proposal said.

The CMS estimates the industry would pay about $40.6 billion over 10 years, or an average annual cost of $4.06 billion, to implement the proposals. But the AHCA and NCAL said the proposal would cost about $6.8 billion annually, or about $400,000 per facility. LeadingAge, which represents nonprofit aging services providers, including nursing homes, estimates the cost at $7.1 billion a year.

Some House Republican lawmakers have asked the CMS to withdraw the proposed rule. But Health and Human Services Secretary Xavier Becerra said the staffing situation must improve to ensure quality care for residents and a safe workplace for employees. “We can’t stay where we are. The status quo won’t work,” Becerra said during a recent webinar with facility employees.

The proposed rule would require nursing homes to have a registered nurse on site at all times. Parkinson wants the CMS to allow nursing homes to use remote technology so registered nurses could monitor patients in multiple buildings without being physically present. When emergencies develop, the RNs could be summoned electronically and provide care and guidance to on-site staff.

“That’s a way that we can get more RN hours in the nursing homes and actually accomplish something” rather than have them physically in the building round-the-clock, “which is simply not possible because there aren’t enough of them out there,” Parkinson said.

The CMS didn’t immediately respond to a request for comment.

Under the CMS proposal, facilities that couldn’t meet the proposed standards could seek a hardship exemption if they could demonstrate: workforce shortages through low provider-to-population ratios for the local nursing workforce; failure of good faith efforts to hire and retain staff; or a financial commitment to staffing by documenting spending for direct-care staff.

California’s Minimum Wage Law

The staffing requirement is expected to exacerbate costs for nursing homes in California, where a law enacted last week progressively hikes the minimum wage for nursing home workers to $25 an hour in 2028.

LeadingAge California opposed the law, said Amber King, the group’s vice president of legislative affairs. The group feared “unintended consequences” of requiring providers to pay higher wages without an increase in Medicare and Medicaid reimbursements.

Struggling facilities may have to reduce services, limit patient admissions, or reduce their number of patient beds because of the law, King said. Others may have to renegotiate rates with private payers or pass higher rates on to residents on fixed incomes, she said.

Staffing and workforce shortages were already the biggest problem for their member nursing homes, King said.

California has more than 1,100 longterm care facilities, according to the California Association of Health Facilities.

“With this minimum wage, we expect to see that situation worsen. And then the federal proposed rule, I think, will just have a compounding effect” on facilities “that are already struggling with workforce,” King said.