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As Hospitals Consolidate, Medicaid Patients Have Fewer Options

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: When hospitals acquire other hospitals to increase revenues and profits, somehow Medicaid member access gets even worse. Wonders never cease.



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A new research brief finds Medicaid admissions decline as hospital markets get more concentrated, but hospitals question the analysis.


Source: Getty Images

September 28, 2023 – Access to care for Medicaid patients declines as hospital markets become more concentrated following mergers and acquisitions, a new research brief from the National Institute for Health Care Management (NIHCM) Foundation suggests.

The research brief finds the average hospital reduced admissions for Medicaid patients when markets became more concentrated. The finding indicates potential limitations on access to care for lower-income individuals, says lead researcher and health economist Sunita Desai, PhD, of the New York University School of Medicine.

Desai analyzed data between 2006 and 2012 from the Healthcare Cost and Utilization Project State Inpatient Databases for New York State, the American Hospital Association Annual Survey, and data on hospital mergers.

The average hospital’s measure of market concentration increased by 7 percent during that time, Desai reports. With every 1 percent increase in a hospital-specific measure of concentration, there was a 0.59 percent decline in all Medicaid admissions and, specifically, a 1.3 percent decline in birth admissions. The study analyzes births separately, as they account for the most frequent Medicaid admissions.

“Policymakers and regulators should consider potential impacts on care and access for Medicaid patients when reviewing mergers or developing policy responses to hospital concentration,” Desai writes. “Moreover, given Medicaid patients are more likely to go to public hospitals, investments in the public hospital systems may be warranted in response to growing market concentration.”

Non-profit hospitals are particularly impacted by hospital market concentration with greater consolidation associated with a decline in Medicaid volume for non-profit organizations. Meanwhile, Medicaid volume increased for public hospitals, according to the research brief.

The finding suggests that non-profit hospitals are not necessarily investing increased profits they receive from higher commercial reimbursement rates into care for low-income populations that require a safety net, the research brief explains. Hospitals generally receive 90 cents for every dollar they spend on treating Medicaid patients, significantly less than what they receive for treating commercially insured patients.

The American Hospital Association (AHA), however, claims the research brief is a “bias-riddled ‘study'” that deflects from the effects payer concentration has on access to care.

“Instead of continuing to myopically focus on the hospital field, researchers should look at broader factors, like how commercial health insurers dominate every market in the U.S. and use that market power for their own enrichment,” Melinda Hatton, AHA’s general counsel and secretary, says in a statement.

“This market domination often comes at the expense of patients. Government reports confirm that some commercial health insurers leverage their market power to put in place policies that delay or deny patient care, inappropriately withhold reimbursement to providers and burn out doctors and nurses,” Hatton continues.

AHA-published research has linked hospital mergers and acqusitions to increased access to high-quality care.

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Arizona’s Medicaid program isn’t giving suspected fraudsters due process, critics say

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Some providers are getting caught in the crossfire as the state tries to deal with the humanitarian crisis / fallout from the sober homes fraud last year.


Stephanie Innes

Arizona Republic

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The number of people publicly criticizing Arizona’s Medicaid fraud crackdown appears to be growing and protesters say they won’t stop until state leaders address their concerns.

About 60 people, carrying signs with slogans such as “All Tribes Lives Matter” and “Our Struggle Is Real,” gathered Tuesday in front of the Arizona Health Care Cost Containment System offices at 801 E. Jefferson St. in Phoenix on to criticize the way the agency has responded to rampant fraud involving its American Indian Health Program.

A much smaller group of protesters gathered a week ago in front of the state health department.

State officials have said the fraud involved fake behavioral health clinics billing the state for services they never provided and that the clinics preyed on Indigenous people struggling with substance use disorder.

In some cases, clinics in the Valley were using white vans to kidnap people from indigenous reservations and take them to bogus treatment facilities, sometimes holding them against their will, investigators have said.

Navajo Nation President Buu Nygren on June 20 declared the fraud a humanitarian crisis on the Operation Rainbow Bridge Facebook page. The fraud reportedly spread to tribes in other states, including Montana, where the Blackfeet Nation in August declared an emergency over the scam, the Associated Press reported.

The Navajo Nation launched Operation Rainbow Bridge to help people who were caught up in the scams get home or find the services they need.


But critics say that the state’s effort to punish fraudsters and prevent more theft of taxpayer dollars has caused an increase in homelessness and unemployment, and left some people without the treatment they need. At least 102 providers were suspended from the AHCCCS program in May, and others have since been suspended in connection with the alleged fraud.

Patients are suffering and in some cases are dying because they aren’t getting the help they need, said Ashley Adams, an attorney who attended the protest. She said she is representing some of the providers who have either been suspended or otherwise harmed by the state crackdown.

“The bad actors set the tone for everyone else,” Adams said. “Anyone who got into this business at a certain time is assumed to be bad … (AHCCCS) is not doing investigations, they are not interviewing employees or looking at records. They are making assumptions.”

A big part of the problem, Adams said, is that much of the fraud began during the height of the COVID-19 pandemic, when demand for behavioral health and substance use disorder treatment was increasing and the health system in general was trying to improve access for patients.

But the state’s response after discovering the scam clinics and money loss was to have a “knee-jerk reaction” and now all providers of services through the American Indian Health Program are assumed to be fraudulent, she said.


“There are solutions to be found aside from suspending everybody,” she said. “They are suspending providers that were doing good work.”

Protest organizer André Miller, a pastor, mayoral candidate and behavioral health provider from Mesa, said his group is trying to meet with Arizona Gov. Katie Hobbs to outline its concerns but that so far they’ve bene unable to to secure any of her time. Hobbs’ office did not respond Tuesday to a request for comment. Miller said his group will continue its public protests until state leaders respond.

Hobbs’ office issued a statement last week when the protesters were outside the Arizona Department of Health Services that said her administration “has worked relentlessly to crack down on fraud, protect taxpayer dollars and end the humanitarian crisis created by fraudulent sober living homes that have endangered some of Arizona’s most vulnerable.”

The statement emailed by Hobbs spokesperson Christian Slater said the administration has been working to get resources for those affected, “providing 13,700 nights of temporary lodging and transportation for over 750 people affected, and directly serving over 4,000 individuals.”

Investigators have said the scam primarily targeted indigenous Arizonans through the AHCCCS American Indian Health program, which allows providers to bill AHCCCS directly as fee-for-service rather than to managed care organizations, which is how most of the agency’s billing is handled.

Miller and some other providers say they they’ve been forced to fire employees, not because they were suspended, but because payments from AHCCCS are delayed because of extra checks and balances the agency put in place to prevent more fraud.

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AHCCCS was allegedly bilked for “hundreds of millions of dollars,” Arizona Attorney General Kris Mayes announced in May at a multi-agency news conference led by Hobbs. The scam was a “stunning failure of government,” Mayes said at the time.

Newfound Hope Wellness & Detox Center in Tempe, which serves primarily indigenous patients, was suspended from AHCCCS payments in February because of suspected fraud, though the owners, who attended Tuesday’s protest, say there’s no evidence any fraud occurred.

Tara Sutherland is living at a facility operated by Newfound Hope with her four children and is fearful that if the organization doesn’t get its provider suspension lifted soon, she’ll be without a place to live. Sutherland, 50, is Navajo and is getting help for substance use disorder involving drugs and alcohol. She and her children were homeless for two months in the spring after a sober living home where they were residing closed.

“We were living in my van and my car. We were parking here and there, maybe staying overnight at friends’ houses, it was hard,” Sutherland said. “Now they are starting in new schools and I don’t want them to keep transferring.”

AHCCCS officials on Tuesday did not have any comment other than to reiterate what they said last week, which is that the agency continues to investigate and suspend behavioral health providers for credible allegations of fraudulent billing, and that its top priority is the health and safety of enrolled members.

Reach health care reporter Stephanie Innes at or at 480-313-3775. Follow her on X, formerly known as Twitter @stephanieinnes.

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PROVIDERS (Financing)- Oklahoma Receives CMS Approval and Advances Medicaid Transformation with SoonerSelect

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: OK tees up the next round of magic money to hospitals by flipping from “supplemental payments” to “directed payments.” Both of course are billed as crucial for “value-based care” (just like DSRIP is…). All 3 are of course just a funds transfer mechanism for hospitals.



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Oklahoma City, OK – The Centers for Medicare & Medicaid Services (CMS) has granted approval for Oklahoma’s 1915(b) waiver for delivery system reform and the proposal to increase supplemental payments to hospitals. These approvals mark a significant milestone in the transition from a fee-for-service system to the new comprehensive health delivery system, SoonerSelect.

“The swift approval of these milestones is a testament to the tireless efforts of the OHCA team and our CMS partners,” said Ellen Buettner, OHCA Chief Executive Officer. “This achievement brings us one step closer to our vision of a comprehensive health delivery system designed to improve the quality of care and services to enhance the health and lives of Oklahomans.”

1915(b) waivers provide states with the flexibility to modify their delivery systems by allowing CMS to waive certain federal regulatory requirements. This waiver is the initial phase of collaboration between OHCA and CMS in transitioning to the SoonerSelect program.

The hospital payment proposal outlines the transition from current supplemental payments to directed payments based on average commercial rates under SoonerSelect, which will substantially increase the pool of funds available for participating hospitals.

OHCA, in close coordination with the provider community, contracted entities and CMS, is diligently preparing for a seamless transition with rigorous testing of systems, provider network development and on-site readiness reviews. SoonerSelect will allow OHCA to strengthen the quality of services SoonerCare members receive by leveraging the resources of the contracted entities, investing in enhanced care coordination and addressing social determinants of health, while maintaining program and contractual oversight to ensure SoonerSelect goals are met.

All health and dental plans will be required to provide SoonerSelect members the same health care services currently offered by SoonerCare but may offer additional benefits.

SoonerSelect dental plans are expected to launch Feb. 1, 2024, with medical and children’s specialty plans expected to launch April 1, 2024.

For more information and updates about delivery reform in Oklahoma, visit

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PROVIDERS (LTC)- Biden’s nursing home staffing proposal is dangerously inadequate

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: This journo says that the rule all the LTC providers are freaking out about will go nowhere anyway.



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Tina Sandri, CEO of Forest Hills of DC senior living facility, left, helps resident Courty Andrews back to her room, Dec. 8, 2022, in Washington. The federal government will, for the first time, dictate staffing levels at nursing homes, the Biden administration said Friday, Sept. 1, 2023, responding to systemic problems bared by mass COVID deaths. (AP Photo/Nathan Howard, File)

As nursing home residents and staff died by the thousands in the first months of the COVID-19 pandemic, one thing became clear: Understaffing in America’s nursing homes is lethalMost facilities lacked the staff needed to prevent neglect and avoidable harm to residents. 

President Biden responded to the nation’s nursing home crisis by declaring that his administration would create a minimum staffing standard for nursing homes, to help ensure basic care and services for the nation’s more than 1 million nursing home residents.

This announcement was heralded by long-term care residents and their supporters. For years, nurses, physicians, researchers, consumer advocates and government reports had been sounding the alarm that understaffing in nursing homes jeopardized residents’ health and safety. 

Consider the result of understaffing in four New York nursing homes recently sued for abuse. 

One resident was so neglected his son couldn’t recognize him. Another resident was dying from an infected pressure sore that grew “cavernous” and ended up “eating away most of his buttocks.” Staff had so little time to provide basic care that they left windows open to reduce the stench of unclean residents, leaving residents “freezing” and swarmed by flies.

Unfortunately, the federal agency responsible for drafting Biden’s new staffing standard has just dropped a bombshell. On Sept. 6, it published a proposed staffing standard so minimal and with such huge exceptions that many nursing home residents will see no benefit at all.

To be sure, the proposal has some good news for residents. It requires a registered nurse to be present in a nursing home 24 hours a day, replacing the current federal requirement of only 8 hours. That’s a major step forward. RN levels predict nursing home quality, and RNs play a critical role in assessing, diagnosing, planning, and overseeing care. 

But when it comes to total staffing levels, the federal agency in charge, the Centers for Medicare and Medicaid Services (CMS), has proposed that nursing homes only be required to provide three hours of staff time per resident per day. That’s far less than what many states with state-specific minimum staffing standards require. It’s only 73 percent of the 4.1 hours per day that a rigorous CMS study found is necessary to avoid neglect. 

A lower standard might be understandable if the federal government planned to make all nursing homes comply with it. It doesn’t. 

CMS proposes granting waivers to both rural facilities and facilities in communities with below-average numbers of health care providers. Facilities must make a “good faith effort” to recruit and retain staff to get a waiver, but this effort doesn’t have to include offering the higher wages or benefits needed to attract workers. 

So long as a facility offers the “prevailing wage”— which is notoriously low — it can avoid the minimum staffing requirement. The Economic Policy Institute found that long-term care workers (over 80 percent of whom are women and who are disproportionately Black and immigrant women) are substantially underpaid and most lack any employer-provided retirement or health benefits.  

The nursing home industry argues that it can’t afford higher staffing requirements. Yet even nursing homes that are dependent on Medicaid (which the industry claims doesn’t pay enough) are being bought up by private equity firms because of their profit potential. And stories abound of nursing homes claiming poverty while their owners pocket millions.  

It’s time for the federal government to stop allowing nursing homes to operate with unsafe staffing levels. After all, the federal government foots the bill for three-quarters of nursing home residents. And the federal government shouldn’t continue to expect taxpayers to pay for nursing homes that lack the minimum staff needed to provide adequate care.

Nursing home residents, their families and their supporters need to demand minimum staffing standards that are higher and that apply to all nursing homes (rural residents deserve good care too). They may not have the resources of the nursing home industry, which routinely spends over $100 million a year on lobbyists. But they can make themselves heard. One way to do so: commenting directly on CMS’s proposed standard on the federal government’s dedicated website. CMS is legally required to read these comments and consider them in developing the final rule.

Inadequate nursing home staffing is not just an issue for today’s residents. Each of us may be one accident away from a nursing home. Whether we are 80 years old with a broken hip or 30 years old with a head injury, we shouldn’t have to worry that we’ll end up neglected in a nursing home too understaffed to keep us safe. 

As one longtime nursing home resident explained, understaffing means “you don’t get cleaned or changed which leaves you susceptible to all kinds of sicknesses” and that’s “counterintuitive to how you’re supposed to live in a nursing home. You’re not supposed to get sicker here because of low staffing.” He’s right. 

Nina A. Kohn is a visiting professor at Cornell Law School, a distinguished scholar in Elder Law at the Solomon Center for Health Law and Policy at Yale Law School and the David M. Levy Professor at Syracuse University College of Law. Charlene Harrington is professor emeritus at the University of California San Francisco’s School of Nursing.
Lori Smetanka is executive director of the National Consumer Voice for Quality Long-Term Care.

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PROVIDERS (LTC)- “Crackdown”: Proposed Nursing Home Minimum Staffing Rule to Cost the Industry $4.23 Billion and Would Directly Impact For-Profit Facilities

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: The initial push back to Biden’s effort to increase care levels in nursing homes has been fierce.



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According to President Biden’s recently published column, the Administration’s proposed rule, published on September 6, 2023, mandating that nursing homes begin to staff facilities so that registered nurses (RNs) and nurse aides (NAs) provide a minimum number of hours per resident day (HPRD) of care is a “crackdown” designed to “[deliver] a clear message to the nursing home industry: no more padding profits on the backs of residents and nurses.” The President’s column clarifies that the Administration is focused on for-profit facility staffing, particularly in those facilities owned by private equity firms, although the rule would apply to both non-profit and for-profit facilities. The Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS) estimate that facilities’ total cost to satisfy the proposed minimum staffing requirement would cost the industry approximately $4.23 billion. Furthermore, CMS and HHS acknowledge that the proposed requirements would require approximately 79 percent of long term care (LTC) facilities to increase their staff levels to ensure full compliance with the proposed requirements.

The rule suggests a comprehensive staffing approach requiring Medicare and Medicaid-certified LTCs to: 1) abide by a new minimum nurse staffing standard based on case-mix; 2) increase their on-site RN presence; and 3) consider new factors in their facility assessments. Specifically, the proposed rule would mandate that facilities maintain an RN staffing requirement of 0.55 HPRD, which is higher than any current RN staffing requirement in any state, except for the District of Columbia. The proposed rule would also require that NAs be staffed at a minimum of 2.45 HPRD, higher than the current minimum in any state or the District of Columbia. Hours staffed by other licensed nurses, such as licensed practical nurses (LPNs) and licensed vocational nurses (LVNs), would not be included in the minimum requirement. In addition, LTC facilities would be required to have an RN onsite 24 hours per day, seven days a week.

Critically, the rule makes clear that the minimum established HPRD is a floor, not a ceiling. Facilities must ensure that their staffing levels consider patient acuity and are based on the results of a facility assessment conducted at least annually, the extensive requirements for which are set out in the proposed rule. The facility assessment is to be developed using evidence-based, data-driven methods that consider both the needs of the facility’s residents and the facility staff’s competencies. The proposed rule emphasizes that it is not incentivizing facilities currently staffing at higher levels than proposed in the rule to decrease numbers, but rather to ensure that “a LTC facility’s staffing decisions should be based on the specific needs of its resident population and not motivated by cost-savings.”

The proposed rule does include a hardship exemption from the minimum HPRD requirements for RNs and NAs, under certain circumstances. To qualify, the facility must be located either in an area where the supply of RNs and/or NAs is insufficient to meet geographic needs, as determined by CMS and HHS, or be 20 or more miles from the next closest LTC facility. In addition, the facility must also be able to document that it has made a good-faith effort to hire and retain staff. Lastly, the facility must be surveyed and cited as noncompliant with the minimum staffing requirement, then demonstrate through documentation the financial resources that the facility expends annually on nurse staffing relative to revenue. However, facilities can negate a potentially available exemption from the staffing requirement if they fail to submit payroll-based journal system data, are classified as a Special Focus Facility (SFF), or based on survey history and other criteria. The proposed rule would implement the final requirements in three phases over a three-year period for facilities located in urban areas, and over a five-year period for facilities located in rural areas.

CMS and HHS state that the types of LTC facilities that may need to increase staffing to meet the minimum requirements include for-profit facilities, as compared to government and non-profit facilities. Also expected to be impacted are larger facilities, freestanding LTC facilities (relative to hospital-based facilities), facilities that are part of a continuing care retirement community, facilities with higher shares of Medicaid residents, SFF facilities or candidates, and rural facilities.

The proposed rule also emphasizes the need for increased efforts to recruit and retain direct care workers into the industry. The proposal includes a new provision that would specify requirements for states to report, annually by delivery system and by facility, the percentage of Medicaid payments that nursing facilities spent on compensation for direct care workers and support staff.

Analyses of the proposed mandates, to date, have noted a number of issues with the proposed rule, as it is currently drafted, that would significantly increase the investment and oversight involved in operating a nursing home. 

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PROVIDERS/LTC- HHS Proposes Minimum Staffing Standards to Enhance Safety and Quality in Nursing Homes

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: The new rule would require more than 75% of facilities can offer.



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Builds on President Biden’s Historic Commitment to Create a Long-Term Care System Where People Can Live with Dignity 

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), issued a proposed rule that seeks to establish comprehensive staffing requirements for nursing homes—including, for the first time, national minimum nurse staffing standards—to ensure access to safe, high-quality care for the over 1.2 million residents living in nursing homes each day. This proposed rule builds on the President’s historic Action Plan for Nursing Home Reform launched in the 2022 State of the Union.

Today’s action is one among many advanced by the Biden-Harris Administration to build a long-term care system where all older Americans can age with dignity, where people with disabilities can receive high quality services in the setting of their choice, where family caregivers are adequately supported, and where there is a pipeline of direct care workers into good-paying jobs with the free and fair choice to join a union. 

“Establishing minimum staffing standards for nursing homes will improve resident safety and promote high-quality care so residents and their families can have peace of mind,” said HHS Secretary Xavier Becerra. “When facilities are understaffed, residents suffer. They might be unable to use the bathroom, shower, maintain hygiene, change clothes, get out of bed, or have someone respond to their call for assistance. Comprehensive staffing reforms can improve working conditions, leading to higher wages and better retention for this dedicated workforce.”

“CMS is proud to be leading the President’s initiative to improve the lives of over 1.2 million residents who reside in Medicare and Medicaid-certified long-term care facilities, and those who will need that care in the future,” said CMS Administrator Chiquita Brooks-LaSure. “Today, we took an important first step to propose new staffing requirements that will hold nursing homes accountable and make sure that residents get the safe, high-quality care that they deserve.”

Under CMS’s proposal, nursing homes participating in Medicare and Medicaid would be required to meet specific nurse staffing levels that promote safe, high-quality care for residents. Nursing homes would need to provide residents with a minimum of 0.55 hours of care from a registered nurse per resident per day, and 2.45 hours of care from a nurse aide per resident per day, exceeding existing standards in nearly all states. CMS estimates approximately three quarters (75%) of nursing homes would have to strengthen staffing in their facilities. As the long-term care sector continues to recover from the COVID-19 pandemic, the proposed standards take into consideration local realities in rural and underserved communities through staggered implementation and exemptions processes.

In addition, nursing homes would also be required to ensure a registered nurse is on site 24 hours per day, 7 days per week and to complete robust facility assessments on staffing needs. Facilities would continue to be required to provide staffing that meets the needs of the individual residents they serve, which may require higher levels of staffing above the proposed minimum standards.  

CMS also proposes to require states to collect and report on compensation for workers as a percentage of Medicaid payments for those working in nursing homes and intermediate care facilities. These policies build on CMS’ recent proposals to support compensation for direct care workers in home- and community-based settings and to publish Medicaid data on average hourly pay rates for home care workers. This enhanced transparency will aid efforts to support and stabilize the long-term care workforce across settings. The Biden-Harris Administration remains committed to strengthening access to high-quality long-term care both at home, in the community as well as in nursing homes and other facilities.

Additionally, CMS announced a national campaign to support staffing in nursing homes. As part of the HHS Workforce Initiative, CMS will work with the Health Resources and Services Administration (HRSA) and other partners to make it easier for individuals to enter careers in nursing homes, investing over $75 million in financial incentives, such as scholarships and tuition reimbursement. This staffing campaign builds on other actions by HHS and the Department of Labor to build the nursing workforce.

“Wages are an important part of job quality and drive challenges in recruitment and retention of direct care workers. Our research shows that in many places these workers can earn higher wages doing other entry-level work,” said Miranda Lynch-Smith, Senior Official Performing the Duties of the Assistant Secretary for Planning and Evaluation.

More than 500,000 direct care workers provide care in nursing homes, assisting residents with daily tasks, such as bathing, dressing, mobility, and eating. This work, performed primarily by women of color, is significantly undervalued. Direct care workers across long-term care settings earn low wages, rarely receive health and retirement benefits, and experience high injury rates. Improving working conditions and wages will lead to improvements in the recruitment and retention of direct care workers and enable nursing staff to provide safer care. 

Findings published by the Office of the Assistant Secretary for Planning and Evaluation show that wages for direct care workers trail other entry-level jobs. In 2019, median wages for nursing assistants were lower than the wages of other entry level jobs in 40 states and the District of Columbia. As an example, the median wage for nursing assistants in Louisiana is $10.90 per hour, compared to $13.41 for other entry-level positions. This is despite the significant demands of direct care jobs and their essential role in meeting the long-term care needs of older adults and people with disabilities.

Other announcements from CMS and the HHS Office of the Inspector General (HHS-OIG) made today would increase transparency, enhance enforcement of existing standards, increase accountability, and ensure safe, high-quality, and dignified care for people living in nursing homes. These announcements include:

  • Increasing Audits of Nursing Homes’ Staffing: CMS is expanding audits of the direct care staffing data that nursing homes must report to make sure that federal and state inspectors, as well as residents and their families, have accurate information, including through Nursing Home Care Compare, CMS’ informational website that families and prospective residents use to learn about facilities.
  • Improving Nursing Home Inspections: CMS will undertake new analyses of state inspection findings to ensure cited deficiencies receive the appropriate consequence, particularly in incidences involving resident harm. These analyses will ensure citations are applied more consistently and reflect the seriousness of the deficiency, permitting appropriate follow-through and enforcement.
  • Ensuring Taxpayer Dollars Go Toward Safe, High-Quality Care: HHS-OIG is performing new oversight work to follow the money on how nursing homes spend the taxpayer funds they receive. This will include analysis of how nursing homes may profit at the expense of taxpayers and residents by using services, suppliers, or facilities controlled by parties they own or are otherwise connected to, rather than from vendors who might charge a more competitive price. These “related party transactions,” have not only obscured how taxpayer funds are being used by nursing homes, but also prevent a transparent and accurate assessment of whether profits and payouts to shareholders are prioritized above investments in resident safety and fair wages for workers. 
  • Cracking Down on Inappropriate Antipsychotic Prescribing Practices and Risks: Grave concerns persist – PDF that nursing homes are overprescribing dangerous antipsychotic drugs to residents. To support efforts to reduce the misuse of these powerful medications, HHS-OIG is examining risks at nursing homes that have concerning prescribing practices. This builds on recent actions by CMS to increase oversight of inappropriate use of antipsychotic medication.
  • Enhancing Resident Safety During Emergencies: Nursing home residents are often among the most vulnerable to public health emergencies and recent emergencies have exposed weaknesses in nursing home emergency planning and harm to residents who suffered from inadequate care. The HHS-OIG is undertaking a new effort to improve resident safety during emergencies, including launching a national study of nursing home preparedness and key challenges and identifying practices to strengthen protections for residents.

The proposed rule is available at

The ASPE report is available at:

The CMS fact sheet is available at:

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REFORM- MDHHS seeks bids for pilot to provide incentives to Medicaid enrollees who meet substance use disorder recovery goals

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Michigan Medicaid is looking to test out a motivational incentives-based model for substance-abuse treatment. This RFP is for people to train providers on the model.



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MDHHS seeks bids for pilot to provide incentives to Medicaid enrollees who meet substance use disorder recovery goals

LANSING, Mich. – The Michigan Department of Health and Human Services (MDHHS) is moving forward with plans to offer an additional evidence-based treatment for Medicaid and Healthy Michigan Plan enrollees who are recovering from substance use disorders.

MDHHS is seeking bids through Aug. 25 from vendors that can offer training and technical assistance to Medicaid prepaid inpatient health plans and providers of substance use disorder treatment. The training will prepare the health plans and other providers to participate in MDHHS’s Recovery Incentives Pilot.

The Recovery Incentives Pilot will use a type of cognitive behavioral therapy known as contingency management that provides motivational incentives to people living with a substance use disorder who achieve their treatment goals. Incentives will be in the form of low-denomination retail gift cards. The amount of the incentive earned increases each week that the participant abstains from a narrow set of specified substances, as evidenced by negative drug tests.

The department plans to launch the Recovery Incentives Pilot in October 2024. The pilot is one of several projects to expand access to substance use disorder treatment through the Michigan Opioid Healing and Recovery Fund.

In addition to providing training, the selected contractor will develop a training curriculum and support providers as they offer services, including developing ongoing support tools and documentation.

“Following trends across the country, the opioid epidemic in Michigan has expanded and now includes the use of stimulants and other mixed substances,” said Dr. Natasha Bagdasarian, MDHHS chief medical executive. “We must continue to equip providers and beneficiaries with the latest evidence-based tools in prevention, treatment and recovery strategies to combat a persistent and evolving crisis. Providing these types of incentives has proven to be one of the most effective treatments for substance use disorder.”

Proposals must be submitted electronically through SIGMA Vendor Self Service by Aug. 25. After vendors log in, they can search for RFP # 230000002778 or search for “Recovery Incentives Training and Technical Assistance.”

The contract period is expected to be from Jan. 1, 2024, through Sept. 30, 2026.

MDHHS reserves the right to change contractor requirements, dates or any other information deemed necessary.

For questions regarding the pilot, contact

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Feds Say Hospitals That Redistribute Medicaid Money Violate Law | California Healthline

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CMS is looking into secondary, private agreements that providers use to further game “provider tax” schemes.



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(Moment / Getty Images)

The Biden administration wants to crack down on private arrangements among some hospitals to reimburse themselves for taxes that help fund coverage for low-income people. It contends the practice violates federal law.

Federal regulators say these arrangements “appear designed to” redirect Medicaid dollars away from facilities that treat the poorest patients to those that “provide fewer, or even no, Medicaid-covered services,” according to a proposed enforcement plan released May 3 by the Centers for Medicare & Medicaid Services.

The practice is typically orchestrated by the lobbying groups that represent hospitals in state capitals — and is often kept secret. Not even federal regulators know how widespread it is, although programs operate in at least a few states, including California and Missouri. It’s also the subject of a Texas lawsuit that could block the federal government’s proposal.

“It does seem like these associations are finding a way to distribute the money in a really weird way,” said Joshua Gordon, the director of health policy for the Committee for a Responsible Federal Budget in Washington, D.C. “But without the transparency, we don’t exactly know what’s going on.”

Previous efforts to block these payback arrangements have gone nowhere in the face of opposition from the powerful health care industry and state health officials who fear that clamping down could result in less money for Medicaid, the joint state-federal health insurance program for low-income people. Several Medicaid experts predicted the latest proposal could meet the same fate, or face immediate court challenges if adopted.

The federal government’s sweeping and contentious proposal would require states to police hospitals, nursing homes, and other health care providers to ensure they made no private agreements to redistribute Medicaid dollars.

Public and private hospitals argue CMS has no jurisdiction to regulate private transactions and has overstepped its legal authority. Together with state health officials from around the country, they warn the move could strip billions of federal dollars from Medicaid and threaten safety-net coverage for 94 million low-income people. Texas alone could lose $6 billion a year, according to Texas Health and Human Services.

California Healthline attempted to interview state health leaders and hospital association officials around the country, but they declined to comment or did not respond to repeated calls and emails.


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The federal government’s proposal is part of a broader Medicaid financing package, and it resurrects a long-standing effort by administrations of both parties over the years to rein in Medicaid spending — which ballooned to $734 billion in 2021.

In this case, regulators are targeting what are known as provider taxes, which states are increasingly imposing on hospitals, nursing homes, and other health care providers to help states pay for their share of the Medicaid program. The more provider taxes states levy, the more money they can also get in federal funding.

These taxes are a critical source of revenue that all states except Alaska rely on for their Medicaid programs — and to get federal matching Medicaid dollars. They account for 17% of state Medicaid funding in 2018, according to a 2020 report by the Government Accountability Office, which called for more transparency in how the money is collected and spent.

In California, hospitals have redistributed provider tax funds since 2009. Here’s how it works: Hospitals with a significant share of low-income patients get more Medicaid funding back than they pay in the tax, so they donate a small portion of their Medicaid funding to a charity run by the leadership of the California Hospital Association, a statewide lobbying organization. The charity awards grants to the hospitals that treat a smaller share of low-income patients and don’t receive as much funding back as they paid in taxes.

For instance, Cedars-Sinai in Los Angeles, one of the country’s richest hospitals, paid nearly $172 million in provider taxes in 2022, eclipsing the $151 million it got back in Medicaid dollars. Then, it received nearly $28 million from the hospital association’s charity — earning about $6.9 million from the program, the hospital’s audited financial statements show.

Meanwhile, faith-based Adventist Health, which serves a larger share of poor people and operates roughly two dozen hospitals in California, Oregon, and Hawaii, paid $148 million in taxes in 2022 and reaped $401 million in Medicaid dollars through the program, according to its independently audited financial statements. It then contributed $3 million of that Medicaid money to the charity.

Federal law sets stringent rules for provider taxes: They must be broad-based and apply to all providers within a certain category, like hospitals; providers within a state must be taxed at the same rate; and taxes can’t be returned directly or indirectly to providers as part of a “hold harmless” agreement.

It’s that last clause that has spurred the feds to act.

Regulators say some health care providers, to gain the needed support within their ranks for the tax, are moving the tax money — and the federal revenue it draws to states — among themselves.

“We believe providers with relatively higher Medicaid volume agree to redistribute some of their Medicaid payments to ensure broad support for the tax program,” they wrote in their proposal.

These agreements “undermine the fiscal integrity” of the Medicaid program, they wrote.

It’s unclear how widespread such agreements are because hospitals don’t make them public. CMS said it has identified “instances” of Medicaid redistribution payments, but spokesperson Greg Myers declined to elaborate.

Jonathan Williams, vice president of government affairs at Sutter Health, which operates about 20 hospitals across Northern California, argued in a June 30 letter to the federal agency that these arrangements help hospitals expand “care networks and afford necessary incentives to ensure that providers can continue caring for Medicaid beneficiaries with unique and specific care needs.”

Missouri’s hospital association also runs a “pooling arrangement,” in which hospitals that get more Medicaid money than they paid in taxes can donate funds to the hospitals that didn’t.

“Missouri providers have had various private agreements to redistribute funds among themselves for decades, with the full knowledge and approval of CMS,” according to an unsigned and undated letter to the agency from the MO HealthNet Division, which runs the state’s Medicaid program.

In 2002, Missouri got federal approval for its redistribution program by pledging to use the funds for Medicaid services, whereas California has not received approval.

The federal government’s plan would require states to get health care providers to attest that they don’t participate in any arrangement that violates federal law. State officials described the proposal as an impractical administrative burden that could dissuade hospitals, nursing homes, and other providers from participating in Medicaid altogether. “Imposing additional requirements on providers that participate in Medicaid managed care networks would only serve to further dissuade network participation, which will have a negative impact on member access to care,” Mike Levine, the assistant secretary for MassHealth, Massachusetts’ Medicaid program, wrote to CMS on July 3.

Texas, which has long tangled with the federal agency over how it funds its Medicaid program, sued in federal court earlier this year after the agency declared in a separate letter to states that these types of arrangements aren’t allowed and must be reported. The letter was sent in February, before the agency issued its formal proposal.

In June, a federal judge handed Texas and its health care industry a victory, temporarily delaying the reporting requirement that regulators had outlined in their February letter. The judge agreed with Texas that the agency had exceeded its legal authority and couldn’t regulate private agreements.

State health officials and hospital leaders are pointing to the Texas court case as evidence that the agency’s May proposal to crack down on the redistribution of Medicaid funds is a “widely controversial interpretation” of the law, as the Tennessee Hospital Association put it in a July 3 letter to CMS.

Federal regulators have not said if or when they will implement their plan. The last time the agency issued a sweeping Medicaid financing proposal, it withdrew it almost a year later.

Mark McClellan, who served as head of the Centers for Medicare & Medicaid Services for two years during the George W. Bush administration, predicted states and Congress would push back hard if the new proposal moved forward.

“Medicaid is a huge component of state spending and keeps getting bigger,” McClellan said. “So, sudden CMS changes or clamping down is going to be disruptive for state coverage.”

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REFORM (PROVIDERS)- What Share of Nursing Facilities Would Meet Possible New Staffing Requirements?

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: A lot (45%) of nursing home providers would struggle to give residents 3.5 hours of care per day.



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Nursing facilities provided medical and personal care services for nearly 1.2 million Americans across 15,076 Medicare and Medicaid-certified facilities in 2022. While these facilities provide care to an older, frail, and disproportionately female population, there have been long-standing concerns about insufficient staffing in nursing facilities and its impact on quality. 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 of inadequate staffing levels 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 when staffing levels are low and quality suffers. A March 2023 report by GAO cited the need to improve staffing as a priority issue in nursing facilities, finding that inadequate staffing made it difficult for nursing homes to adhere to proper infection prevention and control practices.

In light of these concerns, the Administration issued an executive order in April 2023 directing the Secretary of Health and Human Services to consider actions to promote adequate staffing at nursing homes and reduce staff turnover. The order also directed the Secretary of Labor to take actions that would improve the jobs of long-term care workers. This executive order followed the release of a fact sheet by the Biden Administration in February 2022 announcing forthcoming requirements for minimum nursing facility staffing levels.

This data note explores the current state of nurse staffing levels at nursing facilities in anticipation of the forthcoming proposed rule on staffing regulations. Specifically, we analyze the percentage and characteristics of facilities that would meet higher levels of nursing staff, if required under Medicare and Medicaid. The analysis includes data from 14,575 nursing facilities (97% of all facilities, serving 1.17 million or 98% of all residents) that reported staffing levels in June 2023. Staffing levels and requirements are often specified as direct care hours per resident day (HPRD), which equals the total number of hours worked by each type of nursing staff (nurse aides, registered nurses, and licensed practical nurses) divided by the total number of residents. Key takeaways include:

  • Nearly all facilities would meet a requirement of 2.5 or fewer HPRD and 85% of facilities would meet a requirement of 3.0 HPRD, but close to half (45%) of all nursing facilities would not meet a 3.5 HPRD requirements, and only 29% would meet an HPRD of 4.0.
  • Similarly, when looked at as a share of residents, 83% of residents live in a facility with staffing levels of at least 3.0 HPRD, but 50% of residents live in a facility that meet a 3.5 HRPD and only 23% live in a facility with staffing levels of 4.0 or greater.
  • At any required staffing level above 2.5 HPRD, a lower percentage of for-profit nursing facilities would meet the requirement than non-profit or government nursing facilities.
  • There is wide state variation in the share of facilities that would meet required HPRD levels of 3.0 or higher: At a level of 4 HPRD, the share of facilities meeting the requirement would range from 12% in Texas to 100% in Alaska.

HPRD is a relatively simple measure that does not account for what type of nursing staff are at the facility or the types of patients the facility serves. The measure also does not account for the number of non-nursing staff employed by a facility. The proposed rule is likely to strengthen the HPRD minimum requirement and could potentially include additional nurse staffing requirements. If the proposed rule includes requirements related to the types of nurses facilities must employ (and the hours they must work) or adjusts the number of required nurses based on patient health and frailty, fewer nursing facilities would meet a given requirement than are shown here. The rule may also require nursing facilities to employ additional staff beyond nurses, but such requirements are outside the scope of this analysis.

What are Current Staffing Requirements for Nursing Facilities?

The 1987 Nursing Home Reform Act, established the first federal staffing minimums for nursing facilities. The Obama Administration issued an update to these regulations in 2016. Federal regulations require facilities to provide licensed nursing services 24 hours a day, 7 days a week and to have a registered nurse on duty eight hours per day, seven days per week. Facilities must also appoint a director of nursing, have a full-time registered dietician on staff, and provide services that are “sufficient” to meet residents’ needs. Combined, federal regulations have been interpreted as requiring the equivalent of 0.3 nursing HPRD for a 100-bed facility. Requirements are applied irrespective of facility size or resident census, with two exceptions: In facilities with daily occupancies of 60 or fewer, the director of nursing may serve as a charge nurse; and in facilities with greater than 120 beds, staff must include at least one-time full-time social worker.

For at least 20 years, a number of groups have suggested that federal requirements for nursing staff levels (0.3 HPRD) are below the levels that would ensure patient safety and well-being. For example, in 2001, a report commissioned by the Centers for Medicare and Medicaid Services (CMS) recommended a minimum of 4.1 HPRD. In April 2022, the National Academies of Science, Engineering, and Medicine (NASEM) published a report with staffing recommendations that include: having RN on staff 24/7 with additional RN coverage as needed (current requirement of 8 hours per/day); a full-time social worker (currently this only applies to facilities over 120 beds); and an infection prevention and control specialist (no current requirement). The report also recommended funding research to identify optimum staffing levels for other direct care staff. A KFF June 2022 analysis of state policies on nursing facility staffing minimums found that most states require staffing standards above federal requirements.

What Share of Nursing Facilities Meet Varying Levels of Staffing Requirements That Could Be Included in the Forthcoming Proposed Rule?

As of June 2023, virtually all nursing facilities meet current staffing requirements (0.3 HPRD) and most would meet requirements of up to 3.0 HPRD, but if the new staffing requirements are 4.0 or greater, most facilities would need to hire new staff to comply (Figure 1). Because it is unknown what the new requirements might be, this analysis shows how many nursing facilities would meet required HPRD ranging from 1 to 5. Nearly all facilities would meet a requirement of 2.5 or fewer HPRD and 85% of facilities would meet a requirement of 3.0 HPRD, but close to half (45%) of all nursing facilities would not meet a 3.5 HPRD requirements, and only 29% would meet an HPRD of 4.0. Similarly, when looked at as a share of residents, 83% of residents live in a facility with staffing levels of at least 3.0 HPRD, but 50% of residents live in a facility that would meet a 3.5 HRPD and only 23% live in a facility with staffing levels of 4.0 or greater (Figure 1).

A small share of nursing facilities currently have staffing levels that would meet a requirement higher than 4 HPRD. Only 15% of facilities have staffing levels over 4.5 HPRD and just 8% have levels of 5.0. Only one in ten residents live in a facility with 4.5 or more HPRD and just 5% live in a facility with 5 or more HPRD.

If the required HPRD is adjusted for the health and frailty of residents in a nursing facility (case-mix), about 70% would meet a requirement of 3 HPRD, which is lower than the 85% that would meet an unadjusted requirement of 3 HPRD (Figure 2). Under current requirements, facilities do not have to adjust staffing based on the types of residents that live in the facility. However, federal data include staffing levels for facilities that are adjusted to reflect the health and frailty levels of facility residents. This adjustment is called “case-mix” and accounts for the fact that residents who have more health needs or are frailer are expected to require more assistance from nursing staff. For a given required HPRD, a smaller percentage of facilities would meet a “case-mix” adjusted requirement than would meet an unadjusted requirement.

At any required staffing level above 2.5 HPRD, a lower percentage of for-profit nursing facilities would meet proposed staffing levels than non-profit or government nursing facilities (Figure 3). If the level were set at 3 HPRD, 81% of for-profit nursing facilities would meet the requirement compared with 94% of non-profit facilities and 90% of government facilities. At 3.5 HPRD, differences by ownership type widen: a smaller share (47%) of all for-profit nursing facilities would meet requirements than non-profit facilities (75%) or government facilities (68%). At 4.0 HPRD, just 20% of for-profit nursing facilities would meet requirements compared with about half of non-profit (52%) and government facilities (47%). About 72% of all facilities are for-profit (home to 74% of residents), 22% are non-profit (home to 20% of residents), and 6% are government-owned, (home to 6% of residents).

Differences by ownership status are smaller when using an HPRD adjusted for resident health and frailty. When using this adjusted HPRD, only about 12% of for-profit facilities, 8% of non-profit, and 8% of government facilities would meet a requirement of 3.5 HPRD. There is nearly no difference by ownership type in the percentage of facilities that would meet a case-mix adjusted requirement of 4 HPRD or higher.

If required staff levels exceed 3 HPRD, there would be wide variation across states in the share of facilities that would meet the requirements (Figure 4). There is minimal state variation across the states if the new requirements are 2 HPRD or fewer because over 90% of facilities would meet a required level of 2 HPRD in all states (Figure 4). If the requirement is 3 HPRD, the share of facilities in compliance would range from 58% in Missouri to 100% in five states and, if set at a level of 4 HPRD, the share of facilities in compliance would range from 12% in Texas to 100% in Alaska. Results are similar when looking at the percentage of nursing facility residents who live in a facility that would meet various staffing requirements (Appendix Table 1).

Staffing levels also vary within states, though some states generally have lower levels of staffing than others. For example, in Alaska, staffing levels range from 4.7 to 12.7 while in New Mexico, facilities range from 2.3 to 5.6 (Appendix Table 2).

What Happens to Nursing Facilities When They Do Not Meet Required Staffing Levels?

For facilities determined out of compliance with federal staffing requirements, penalties vary depending on a deficiency’s severity and how long it takes for a nursing facility to reach substantial compliance.
Substantial compliance is a level of compliance with the requirements such the deficiency no longer poses a substantial risk to resident health or safety. For deficiencies that do not result in immediate jeopardy, facilities are given up to six months to correct deficiencies. If a facility does not come into substantial compliance within three months, Medicare and Medicaid will not pay the costs for individuals admitted after the deficiency finding date. If a facility that does not come into substantial compliance within six months, Medicare and Medicaid will not pay the costs for any individuals in the facility. For deficiencies that result in immediate jeopardy, CMS or the State Medicaid Agency may either: 1) appoint temporary management to oversee operations while deficiencies are corrected or 2) end the facility’s participation in the Medicare and/or Medicaid programs and transition residents to another facility or community setting.

Between July 2021 and July 2022, about 19% of nursing facilities received deficiencies for “Nursing Services“, meaning that they failed to have “sufficient nursing staff with the appropriate competencies and skills sets to provide nursing and related services to assure resident safety”. This grouping of deficiencies captures more than just failing to meet the 0.3 HPRD requirement and includes other deficiencies such as the failure to ensure proper training for nurse aides. The vast majority of these deficiencies were not associated with harm to patients.

What are Key Issues to Watch?

Looking ahead, if a proposed rule is issued and finalized, many nursing facilities may need to hire new staff to meet the proposed staffing levels, but the extent of the challenge will depend on the specifics of the new requirements. Key considerations for evaluating new requirements, beyond the level of the minimum staffing requirement, include the following.

  • How long do nursing facilities have to comply with the new requirements and are they phased in over time? Implementation periods of several years and phased-in requirements give nursing facilities more time to come into compliance.
  • Do the new requirements include a total number of HPRD or do they include specific requirements for different types of nursing staff? Requirements for overall staffing levels will be easier for nursing facilities to meet than requirements that are specific to each type of nursing staff.
  • Do the new requirements include requirements for non-nursing staff such as social workers, nutritionists, and infection control specialists? Requirements for non-nursing staff could make it harder for some facilities to comply.
  • Are the new requirements adjusted for patients’ characteristics such that facilities with higher-risk residents need to have more staff or more highly trained staff? It may be more difficult for nursing facilities to meet requirements that vary based on patient characteristics.

Compounding the compliance challenge are workforce shortages in the long-term services and supports (LTSS) sector, which reflect demanding working conditions and relatively low wages. The COVID-19 pandemic affected health care workers in all settings but particularly for direct care workers who provide LTSS. As of December 2022, employment levels were still over 13% below pre-pandemic levels for nursing care facilities and 7% below pre-pandemic levels for community care facilities for the elderly. Immigrants could help fill some of those positions, but a backlog of green card petitions is expected to further exacerbate nursing shortages across both health and long-term care sectors. Nationwide, there is “a growing crisis of unfilled job openings and high staff turnover” in the long-term care sector. Recognizing these shortages, most states have moved forward to increase Medicaid payment rates to LTSS providers. In a recent survey of Medicaid directors, 44 states reported increasing Medicaid rates for nursing facilities in 2022, and a survey of HCBS programs found that 48 states increased rates for home- and community based LTSS providers. Despite those pay increases, workforce shortages persist.

Potential increases in nursing home staffing requirements could increase costs, which may be difficult for some states’ Medicaid programs to absorb without additional federal funding. The American Health Care Association, a group representing both for-profit and not-for-profit long-term care facilities, commissioned a study in anticipation of the proposed rule and estimated that a minimum staffing requirement could cost anywhere from 3 billion to 10 billion dollars in a single year and require hiring more than 187,000 nurses and nurse aides. It is not clear how these costs will be financed, but they 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. Medicaid financing is shared by the states and the federal government. However, unlike the federal government, states must meet balanced budget requirements, and therefore, may need to cut other spending or raise taxes to pay for the state share of additional nursing home costs.

In addition to potential costs to meet nursing facility staffing requirements, a recent proposed rule on Medicaid access would require states to demonstrate that their payment rates for home and community-based LTSS are “adequate to ensure a sufficient direct care workforce to meet the needs of beneficiaries and provide access to services in the amount, duration, and scope specified in the person-centered plan” Together these rules could require significant Medicaid investments in LTSS.

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REFORM (PROVIDERS)- Provider group seeks 2-year moratorium on HCBS settings rule enforcement

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: In which the nursing home lobby asks for more time to remedy abysmal member care. 2 more years, to be exact.


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(Credit: Ijubaphoto / Getty Images)

A new white paper from LeadingAge recommends a two-year enforcement moratorium on the federal government’s home- and community-based services settings final rule, saying that it is flawed policy.

The final rule from the Centers for Medicare & Medicaid Services, originally proposed in 2014 and in effect since March, creates “significant challenges” and “pain points” as it fails to ensure access to person-centered care and creates obstacles to assisted living and other providers trying to deliver services, according to the paper.

The white paper, titled “Home and Community-Based Settings Rule: How Regulation Intended to Ensure Access to Medicaid Funded Services Falls Short, and Changes Needed to Fix It,” was released Wednesday. 

LeadingAge President and CEO Katie Smith Sloan said in a statement that although the intent of the HCBS settings final rule is “laudable,” it is problematic in practical application. The association recommends the two-year enforcement moratorium for HCBS providers while the Biden administration develops specific guidance for them.

“When applied to certain types of care settings, including assisted living and adult day services, the rules’ requirements could potentially harm an older adult,” Sloan said. “As a result of these issues, the rule is limiting older adult Medicaid beneficiaries’ access to HCBS — the opposite of its intent.”

Providers could leave Medicaid

The sentiments echo a letter Sloan sent to leaders of the Senate Special Committee on Aging and Senate Committee on Health, Education, Labor and Pensions last month. States had until March 17 to comply with most of the rule’s provisions. Assisted living communities providing HCBS to their residents through Medicaid waivers are among those affected.

The white paper presents examples demonstrating how the settings rule affects assisted living and some other providers — for instance in the areas of employment counseling, kitchen access and lockable door requirements for assisted living residents living with dementia. As a result, LeadingAge said, the rule could “chill access” to services, with many assisted living and adult day providers declining to accept Medicaid payments.

Currently, 18% of assisted living residents rely on Medicaid to pay for daily services, and 61% of all assisted living communities are Medicaid-certified, according to the National
Center for Assisted Living.

“Additional costs for staffing to complete lengthy person-centered service planning templates with inapplicable questions, coupled with renovations and policy changes, do not make financial sense in a system already struggling with low Medicaid reimbursement rates and a staffing crisis,” the paper stated. “These pressures have pushed — and will push — providers out of the Medicaid provider space, further limiting options for low-income older adults, and forcing more individuals to go without care, or pushing them into their only remaining option — a nursing home — quite the opposite of the intent of the settings rule.”

Thirty-four percent of assisted living residents are living with diagnosed dementia, according to the Centers for Disease Control and Prevention’s National Center for Health Statistics. Eighteen percent of assisted living communities have dedicated dementia care wings or floors, and 11% serve only adults who are living with dementia, according to NCAL.

More feedback recommended

Along with a two-year moratorium on the settings rule, LeadingAge is proposing that CMS treat services for older adults differently than those for working-aged individuals with disabilities. The association also recommended soliciting feedback from aging services experts, providers and state officials on the settings rule, to better define compliance parameters for the population being served.

“By better defining parameters for compliance in settings where the settings rule doesn’t fit the population being served, settings rule compliance efforts can focus more directly on services to individuals for which the rule was intended,” the paper concluded.