Biden Proposes Major Nursing Home Reforms

The Biden Administration has proposed a wide range of changes in the regulation of nursing homes. They include efforts to require minimum staffing levels; limit shared rooms; enhance inspections, penalties, and transparency; and crack down on owners with a history of poor quality. The plan also would expand a technical assistance program to help operators improve their quality of care.

Some of these initiatives can be adopted through regulations, but many would require congressional approval, which will be difficult to achieve. This long-awaited package has the potential to make major changes in the way nursing homes are regulated, improve transparency for consumers, and could drive some operators out of the business—for better or worse.

The Covid-19 pandemic exposed many weaknesses in nursing home care, which is divided between post-acute services such as rehabilitation, largely funded by Medicare; and long-term care, largely paid by Medicaid.

More than 200,000 residents and staff of long-term care facilities (including nursing homes and assisted living) died during the pandemic. Covid exposed severe weaknesses in infection control and staffing, dramatically increased staff shortages, highlighted the problems of social isolation among residents, and accelerated a pre-pandemic trend of moving rehab services out of facilities and into homes. It put many operators under enormous financial pressure and accelerated the trend of non-profit facilities closing or selling out to for-profit owners, including real estate investment trusts (REITs) and private equity investors.

Observers have been waiting for months for the Biden Administration to respond. Today, the White House did.

The proposals came in two buckets: Improving quality and safety and increasing transparency. Much of it can be achieved through regulation by the Centers for Medicare and Medicaid Services (CMS). But some will need federal legislation. Here are some highlights of what the Administration is proposing.

It will:

Set a minimum staffing level for nursing homes. Twenty years ago, a report for CMS recommended the facilities have 4.1 staff hours per resident day. A September, 2020 study found that higher covid cases and deaths were associated with lower staffing levels. But there currently is a wide variation in staffing.

Count on a huge battle over this issue: Both over appropriate levels of nurses, aides, and other staff, and over how the facilities will pay for the inevitable added costs. And staffing levels tell only part of the story. Well-run facilities also require proper staff training, good management, high morale, and limited turnover.  

Improve Nursing Home Compare, CMS’s online tool that is intended to help consumers compare facilities. Biden promises a number of changes, including better usability, more information about staffing, the use of more independently-verified data rather than information reported by the facilities themselves, and penalties for facilities that provide incorrect information.

Unfortunately, the Administration remains focused on safety issues alone and is not pushing for better information about quality of care and quality of life in facilities. That is a missed opportunity.

“Promote” a reduction in shared rooms. Currently many facilities require residents (especially those on Medicaid) to share rooms with as many as three other residents. CMS will “explore ways” to phase out triple and quad rooms and  “promote” single rooms. Facilities say they cannot survive with only single rooms and no increases in payments. But for infection-control reasons alone it is hard to justify these multiple-resident rooms.

Crack down on chronic low-quality facilities. CMS currently has a program to increase inspections and even shut down these facilities. But the Special Focus Facility Program rarely works as intended and these bad actors continue to operate without improvement. Biden proposed tougher enforcement and quicker resolution of cases. He also is proposing increasing financial penalties on chronic violators.

Stop the use of unnecessary medications and treatments. The idea is to further limit the use of drugs such as anti-psychotics for people with dementia and limit fraud where facilities claim reimbursement for, say, physical therapy for residents who cannot benefit from those services.

Bar poor performing chain owners from expanding. Currently CMS reviews only the quality of individual facilities. Now, Biden is asking for legislation that would allow CMS to look at the track record of chain owners before allowing them to acquire or open additional sites. In addition, chain owners could be fined for health and safety violations even after they sell a facility.

More ownership transparency. In 2010, the Affordable Care Act required CMS to track and publicly disclose detailed information on corporate ownership of nursing homes. Most of this never happened. Now, Biden says CMS will collect and report this information, including on the Nursing Home Compare website, so it will be available to consumers.

Biden’s package is extremely ambitious. The regulatory changes will generate heated debate but many are likely to be enacted. Legislative changes are less likely. Many of these changes will better protect consumers even as they put further pressure on the already-deeply disrupted nursing home industry.