What Share of Nursing Facilities Might Meet Proposed New Requirements for Nursing Staff Hours?

Editor’s Note: This brief was updated on September 22^nd, 2023. We dropped Figure 5 after identifying potential issues with the CMS case-mix adjustments in the underlying dataset.

On September 1, 2023, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would create new requirements for nurse staffing levels in nursing facilities, settings that provide medical and personal care services for nearly 1.2 million Americans. The adequacy of staffing in nursing homes has been a longstanding issue. A recent report issued by the National Academy of Sciences, Engineering, and Medicine (NASEM) raised concerns about low nursing staff levels in nursing facilities across the country and the impact on the quality of care for nursing home residents. The high mortality rate in nursing facilities during the COVID-19 pandemic highlighted and intensified the consequences of inadequate staffing levels.

The new proposed rule includes several provisions to bolster staffing in nursing homes. It proposes a minimum of 0.55 registered nurse (RN) and 2.45 nurse aide hours per resident day; requires facilities to have an RN on staff 24 hours per day, 7 days per week; strengthens staffing assessment and enforcement strategies; creates new reporting requirements regarding Medicaid payments for institutional long-term services and supports (LTSS); and provides $75 million for training for nurse aides. As noted in the proposed rule, CMS aims to balance the goal of establishing stronger staffing requirements against the practicalities of implementation and costs. Comments on the proposed rule are due by November 6, 2023.

This issue brief analyzes the percentage and characteristics of facilities that would meet the rule’s proposed requirements for the minimum number of RN and nurse aide hours to better understand the implications of the rule. The analysis does not evaluate facilities’ ability to comply with other requirements, including the requirement to always have a registered nurse on duty 24/7 or the ability to meet the new reporting and assessment requirements due to data limitations (see methods). The analysis uses Nursing Home Compare data, which include 14,591 nursing facilities (97% of all facilities, serving 1.17 million or 98% of all residents) that reported staffing levels in August 2023.

Key takeaways include:

• Among all nursing facilities, fewer than 1 in 5 could currently meet the required number of hours for registered nurses and nurse aides, which means over 80% of facilities would need to hire nursing staff.
• 90% of for-profit facilities would need to hire additional nursing staff compared with 60% of non-profit and government facilities.
• The percentage of nursing facilities that would meet the requirements in the proposed rule varies from all in Alaska (100%) to nearly none in Louisiana (1%).

What are some of the major provisions in the new rule?

There are many provisions of the proposed rule which will be phased in over time. The first phase includes enhanced facility-wide staffing assessment requirements, which will strengthen existing requirements by requiring facilities to: assess the needs of each resident, include input from nursing facility staff and residents’ families or legal representatives, and develop a plan to meet required staffing levels given residents’ needs. The first phase would take effect 60 days after publication of the final rule. The second phase requires all nursing facilities to have a registered nurse on duty 24 hours a day and 7 days a week (24/7), up from the current requirement of 8 hours a day, 7 days a week. The second phase would take effect 2 years after publication of the final rule for urban nursing facilities and 3 years after publication of the final rule for rural nursing facilities.

The third phase includes the most anticipated provisions of the proposed rule—and the focus of this analysis—which are the number of nursing hours per resident day (HPRD). The proposed rule would require nursing facilities to have enough nursing staff to provide each resident with at least 0.55 hours of registered nurse (RN) care and 2.45 hours of nurse aide care every day. The new rule does not include requirements for licensed practical nurses.

The rule also includes a broad hardship exemption that would allow nursing facilities to maintain lower staffing levels if they met certain requirements. Requirements would include location in an area at least 20 miles from the nearest nursing facility, or in an area with workforce unavailability (defined as having a provider to population ratio that is at least 20% lower than the national average). Nursing facilities would also have to demonstrate good faith efforts to hire and retain staff and a financial commitment to staffing by reporting the total amount of money spent on direct care staff. Finally, facilities would be ineligible for an exemption if they had any staffing-related violations including a failure to submit required data, being identified as a Special Focus Facility (a designation provided to facilities with a history of serious quality issues), or having violations related to insufficient staffing.

The proposed rule includes other requirements as part of a broader executive branch strategy aimed at addressing quality and staffing in nursing facilities. Requirements in the proposed rule reflect the findings of a 2022 Nursing Home Staffing Study that analyzed current staffing levels, states’ minimum staffing requirements, and the relationship between staffing levels and quality. Beyond staffing requirements for nursing facilities, the proposed rule would require state Medicaid agencies to report on the percent of Medicaid payments for institutional long-term services and supports (LTSS) that are spent on compensation for direct care workers and support staff. That requirement is similar to a requirement for home and community-based LTSS that was enumerated in a proposed rule on access to care in Medicaid. Finally, the rule was announced in tandem with a national campaign to support staffing in nursing homes, including over $75 million in financial incentives such as scholarships and tuition reimbursement for individuals to enter careers in nursing homes; and with new efforts to improve enforcement of existing standards using audit and inspection authorities.

What share of nursing facilities would currently meet the minimum registered nurse and nurse aide HPRD standards in the proposed rule?

KFF estimates that 19% of nursing facilities would currently meet the minimum RN and nurse aide HPRD staffing standards and the remaining 81% would need to hire more RNs or nurse aides (Figure 1). Nearly half of facilities meet the RN requirement (52%) but only 28% meet the nurse aide requirement. The Centers for Medicare and Medicaid Services (CMS) estimates that 25% of facilities would meet the minimum staffing standards for nurse hours, which is slightly different from the KFF estimate because CMS’ estimate accounts for the 24/7 rule for RNs. It is not clear how CMS accounted for the 24/7 rule given currently available data or what month(s) of data were used in the CMS estimates. KFF uses the most currently available data for both RNs and nurse aides. Different months of data could also contribute to differences in the estimates. Neither KFF nor CMS account for the hardship exemptions in the estimates nor is it clear what share of the facilities that do not meet minimum standards would apply and qualify for a hardship exemption.

Most (90%) for-profit nursing facilities would need to hire more RNs or nurse aides compared with 60% of government and non-profit facilities to comply with proposed HPRD staffing minimums. (Figure 2). When looking at ownership of facilities that meet the RN requirement, a larger share of non-profit facilities would meet the 0.55 standard than for-profit and government facilities (75%, 44%, and 61%, respectively). When looking at nurse aides, about half of non-profit and government facilities meet the minimum staffing levels, compared with only 20% of for-profit facilities.

The share of nursing facilities that would meet the RN and nurse aide HPRD requirements in the proposed rule varies from nearly none in Louisiana to all facilities in Alaska (Figure 3). In over half of states, less than a quarter of facilities would meet the HPRD provisions in the proposed rule. In six states, over half of facilities would meet these provisions, and in the remaining 16 states, 25-49% of facilities would meet the provisions. Variation across the states is likely to reflect many factors including what percentage of facilities are for-profit, the availability of RNs and nurse aides in the state, and state requirements regarding minimum staffing levels.

What share of nursing facilities would meet an alternative staffing standard proposed by CMS?

Adding an overall nurse staffing requirement of 3.48 HPRD

In the proposed rule, CMS requested feedback on whether there should be an additional requirement for facilities to maintain staffing levels of 3.48 HPRD. Facilities would be required to have 0.55 HPRD of RN time, 2.45 HPRD in nurse aide time, and could use any type of nursing staff hours to fill the final 0.48 HPRD. In addition, CMS is soliciting feedback as to whether the agency should consider using case mix adjustment when assessing compliance with the minimum staffing requirements, but it is unclear what methodology would be used to account for residents’ needs.

Increasing the requirements to 3.48 HPRD would not materially affect the share of facilities that would currently meet the proposed requirement (Figure 4). Among the 2,756 facilities that would meet the proposed requirements for RN and nurse aides in the proposed rule, only 8 would not meet the 3.48 standard.

What are key issues to watch?

Will broad workforce shortages in the LTSS sector and widespread hardship exemptions limit the effects of the new rule when implemented? The pandemic affected health care workers in all settings but particularly workers who provide LTSS. As of June 2023, employment levels were still more than 11% below pre-pandemic levels for workers in skilled nursing care facilities and 3% below pre-pandemic levels for workers in elderly care facilities. Of the two minimum staffing levels, more facilities would need to hire nurse aides than RNs, reflecting broad shortages of direct care workers in all LTSS sectors. And, although fewer facilities would need to hire new RNs, those that do, may find it difficult to compete with hospitals, many of which are also trying to increase the number of RNs they employ. To the extent that many nursing facilities receive hardship exemptions on account of workforce shortages, the effects of the proposed rule on minimum staffing levels will be muted.

How will CMS enforce the requirements and will the agency receive sufficient funding for the costs of verifying compliance? The new staffing standards will require additional administrative resources for survey and certification, but it is unknown whether future federal budgets will have adequate funding for nursing facility inspections and enforcement. A recent report from the U.S. Senate found widespread understaffing at nursing facility survey agencies. A related uncertainty is how CMS will enforce the 24/7 RN requirement. Current data show how many RN hours each facility has but not when those hours occur each day. To the extent that RNs are working overlapping shifts and not covering all 24 hours, it is not clear how that would be identified in existing data.

How will the costs of paying new staff will be financed? For nursing facilities, hiring and retaining sufficient staff will increase their operation costs and CMS estimates that complying with the proposed rule will cost $40 billion in the 10 years after the final rule takes effect. Such costs are likely to be passed on to public and private payers for nursing facility services, including residents and their family members who paid $45 billion in out-of-pocket costs for care in nursing homes and other institutional LTSS settings in 2020. Medicaid spent nearly $53 billion dollars in that year, about twice the amount ($26 billion) that traditional Medicare spent on skilled nursing facilities (SNFs) in 2020, and although Medicaid financing is shared by the state and federal governments, all states except for Vermont must meet balanced budget requirements.

How will the provisions of the final rule compare to those of the proposed rule? The cost of implementing the staffing requirements have already been raised as a major concern from the nursing home industry among others, despite calls for stronger requirements from resident advocates. Changes made to the staffing requirements in response to stakeholder concerns and comments on the rule could affect how many or few nursing facilities will be able to comply.

Methods

This analysis uses Nursing Home Compare as of August 2023. Nursing Home Compare is a publicly available dataset that provides a snapshot of information on quality of care and key characteristics for approximately 14,900 Medicare and/or Medicaid-certified nursing facilities. This analysis drops about 3% of nursing facilities, including the facilities in Guam and Puerto Rico and nursing facilities for which there was not staffing data available for August 2023, for a total analytic sample of 14,591 facilities. Urban and rural facilities have different timelines to come into compliance with the rule, which this analysis does not take into account. This analysis reflects compliance rates if the HPRD requirements were in effect now for all facilities. Due to the limitations of publicly available data, this analysis does not look at facilities that meet the requirement to have an RN on staff 24 hours a day, seven days a week (24/7). Nursing home staffing data is most commonly derived from the Payroll Based Journal (PBJ), which includes data on the total number of RN hours worked per day at a facility, but no data on the timing of shifts. This limits our understanding of whether shifts were worked simultaneously by multiple employees (possibly not fulfilling the 24-hour requirement) or whether those hours were spread out over a 24-hour period (fulfilling the 24-hour requirement). CMS estimates that close to 80% of nursing facilities would already meet the RN 24/7 requirement and their analysis of the number of facilities that meet minimum staffing standards is conducted after evaluating what percentage of facilities would have to hire more RNs to comply with the 24/7 requirement. It is unclear how the agency estimated whether nursing facilities had RNs on staff 24/7 or what data they used to do so. The rule did not account for employment of licensed practical nurses (LPNs), which are employed at most nursing facilities. Neither we nor CMS made assumptions about changes to LPN staffing in our estimates.