President Joe Biden has made it a major policy goal to improve long-term care options for older adults and people with disabilities by improving the working conditions of the people who care for them.
Two separate but interconnected proposals would require minimum staffing requirements in nursing homes and require that 80 percent of Medicaid payments for home and community-based services go toward compensating direct care workers.
But the problem with those proposals, say some lawmakers, state officials and those in the industry, is that they’re not realistic as long as workforce shortages continue and low Medicaid reimbursement rates remain in place.
Meanwhile, advocates for the people who use those services say the money is available, but staffing is kept low and workers are underpaid to boost profits.
The truth, said David Grabowski, a long-term care expert and health care policy professor at Harvard Medical School, is probably somewhere in between.
“Both sides are right,” he said. “There is a shortfall in Medicaid, and providers play a lot of games.”
Research has consistently demonstrated that low staffing levels lead to worse outcomes for patients, and workforce shortages in both home and community-based settings are leading to delays in care, with people being turned away from badly needed services.
“These are the frontline workers who we call heroes. Until we address those inadequacies in benefits and pay and treatment, we’re going to continue to have understaffing,” said Sam Brooks, director of public policy for The National Consumer Voice for Quality Long-Term Care.
The Centers for Medicare and Medicaid Services is expected to soon release its long-awaited proposed rule setting minimum staffing levels in the nation’s 15,500 nursing homes after Biden previewed the regulations in last year’s State of the Union address.
The proposed rule is currently being reviewed by the Office of Management and Budget and is expected to be released this summer. The agency is meeting this week with the American Hospital Association and National Rural Health Association.
The nursing home industry, led by the American Health Care Association, is lobbying extensively against a minimum standard, calling it an unfunded mandate and noting low Medicaid rates, a historic departure of workers during the COVID-19 pandemic who left for higher-paying jobs in other industries and nursing home closures.
“A staffing mandate will not create applicants. And when nursing homes cannot meet this impossible standard, they will have to reduce the number of residents they serve or close entirely, exacerbating the current access-to-care crisis we’re already seeing unfold,” an AHCA spokesperson said.
A minimum staffing standard has long been recommended by experts including the National Academies of Sciences, Engineering and Medicine, which found in its 2022 report that low pay and poor benefits have “made the nursing home a highly undesirable place of employment.”
The report recognized current staffing shortages but argued that enhanced staffing and training opportunities would make nursing homes more desirable workplaces, attracting more workers.
“This is a decades-old problem, and it’s not just about post-pandemic nursing home care,” said Lee Goldberg, health policy specialist for the AFL-CIO. “These are really difficult jobs, and they don’t pay well. The problem is not nursing homes not being able to hire people, but they can’t retain people. People shouldn’t get bad care or bad working conditions because nursing homes can’t hold on to workers.”
CMS is conducting a study to guide its proposal. The results have not been made public yet, but a study that the agency released in 2001 found that at least 4.1 hours of direct care per day was necessary to avoid increased risk of harm.
Those numbers were never put into regulation. Sources have said CMS is considering a level lower than 4.1 hours and waiving the requirements for rural facilities.
Grabowski, who supports mandated staffing requirements, said the facilities that might be most challenged by a mandate are ones serving large proportions of Medicaid patients.
“There are facilities out there that are not spending all of their dollars on direct resident care, so this is going to force them to pivot,” he said. Some nursing homes, particularly for-profit entities, have come under scrutiny for hiding money through “related party transactions,” in which they pay for services to companies they own at inflated prices, making the nursing homes look less profitable.
“But there are other facilities — those that care for high numbers of Medicaid residents, that may be pushed to come up with the resources to hire staff at these minimum levels,” Grabowski said.
Lawmakers have been divided by the proposal, but not along party lines. Sens. Jon Tester, D-Mont., Angus King, I-Maine, and Kevin Cramer, R-N.D., expressed concerns during a June hearing with a Biden administration official.
“To start with what I believe may be unrealistic standards, it seems to me, is backwards,” King said, referring to the minimum staffing proposal. “We should start with the programs to build the staff and maintain the staff that we have, then talk about increasing” staff.
“It’s not enough to say, ‘We’re going to have a good staff and we’re going to have enough staff.’ I want to hear how you’re going to make that happen, because we’re losing nursing homes generally in Maine because of a lack of staff,” King said.
Home and community-based services
The Biden administration also recently proposed a rule that would require that 80 percent of Medicaid payments for homemaker, personal care services and home health aide services go toward paying direct care workers, aiming to improve wages and attract more people to the field.
Those efforts come after Congress rejected Biden’s request for $400 billion in additional funding for home and community-based services — services that help older adults and people with disabilities stay in their homes — in his domestic policy package that passed last year.
Now that Democrats no longer have control of Congress and Republicans are calling for budget cuts, it’s even less likely that Congress will increase funding for such programs. That leaves Biden to pursue regulation, which doesn’t typically come with new money.
The goal, the administration said, is to address the “inextricable link between sufficient payments being received by the direct care workforce and access to and, ultimately, the quality of” home and community-based services.
Nationally, home health workers, including workers who do clinical work, make about $14.87 an hour, according to the Bureau of Labor Statistics.
The average reimbursement for personal care services is $23.09 per hour in the 22 states that report that data, and $119 per hour for home health agency services in the 20 states that report that data, according to KFF, a health care think tank formerly known as the Kaiser Family Foundation.
But that is the amount paid to the agency and not necessarily what the worker would receive as a wage.
Supporters of the rule, like Brooks, said 80 percent should be doable for providers since the vast majority of the service they provide is through direct care workers.
But providers say Medicaid rates don’t support higher wages.
“It does not get to the root cause of the direct support workforce crisis, which is stagnant and insufficient Medicaid payment rates that do not include adequate funding for competitive raises,” said Shannon McCracken, vice president for government relations for ANCOR, which represents providers caring for people with disabilities.
Requiring 80 percent of funding to go to direct care worker compensation would mean cuts in other areas like worker training, clinical supervisors, transportation and other services for patients, McCracken said.
Some states, like California, have also come out against the rule, noting that it does not account for differences in the ways each state sets its rates. Nor does it include vacation, retirement benefits and other benefits in the definition of compensation.
Groups like the National Association for Home Care & Hospice said CMS should require states to set rates that facilitate access to care.
“It’s hard to increase compensation without having increased revenue to do so,” said NAHC president William Dombi, who noted that rates vary widely from state to state.
“There’s nothing in the rule that requires a rate increase from the states to make anything close to uniform across the country,” he said.