Raising the Floor: CMS Proposes New Nurse Staffing Requirements for Long-Term Care Facilities

September 26, 2023
12 minutes

I. Introduction

On September 6, 2023, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule that would impose federal requirements for nurse staffing in Medicare- and Medicaid-certified long-term care (“LTC”) facilities1 (the “Proposed Rule”).2 The Proposed Rule responds to chronic understaffing concerns in the post-acute setting, which was exacerbated by the COVID-19 public health emergency (“PHE”), and attempts to “improve[] the likelihood that [the 1.4 million LTC facility] residents in the U.S. are provided safe, high-quality care, and that workers have the support they need to provide high-quality care.”3 While the impact of the Proposed Rule would be state-dependent, as some states have no laws on point while others have similar laws to the Proposed Rule, it imposes substantial costs on LTC facilities, managers, owners, and other stakeholders. If finalized without changes to the timeline, the staffing proposals would be implemented in three phases over three years, with more flexibility afforded to LTC facilities located in rural areas to comply within a five-year timeline. Public comments to the Proposed Rule will be accepted through November 6, 2023.

II. Background

LTC facilities participating in Medicare and/or Medicaid are required to ensure all employees and contractors comply with federal participation requirements,4 which serve to ensure that LTC facilities meet and maintain residents’ minimum health and safety requirements. Under these standards, skilled nursing facilities (“SNFs”) and nursing facilities (“NFs”) are required to provide 24-hour licensed nursing services5 and must also follow a plan of care addressing the medical, nursing, and psychological needs of each resident,6 which must be periodically reviewed and revised following mandated assessments. Additionally, SNFs and NFs must comply with regulatory requirements addressing LTC facility administration, resident rights, care planning, quality assessment, performance improvement, and staffing requirements, among other requirements.7

The Proposed Rule seeks to address some of the shortcomings of the current federal requirements for providers of services in LTC facilities. First, while the federal requirements specify the number of hours that licensed nurses and other nursing personnel must be available, nurses are not required to allocate those hours to direct resident care. Second, the federal requirements do not account for the effects of understaffing, which have been found to negatively impact resident safety and quality of care. For example, studies have shown that chronic understaffing increases the likelihood of “residents’ call lights going unanswered, medication errors, untreated wounds, inadequate bathing, . . . resident falls and altercations between residents.”8 Advocates of minimum staffing standards note also that residents at understaffed LTC facilities may “lie for hours in wet and soiled diapers” and “suffer abuse from staff and other residents because no one is watching.”9 Importantly, retrospective studies have shown that consistent, adequate, and/or increased nurse staffing in LTC facilities is correlated with improved clinical outcomes.10

III. Summary of Proposed Rule

The Proposed Rule outlines three main staffing proposals, amending and/or supplementing existing requirements set forth in the Social Security Act (the “Act”) and its implementing regulations, as follows: (1) minimum nurse staffing standards of 0.55 hours per resident day (“HPRD”)11 for Registered Nurses (“RNs”) and 2.45 HPRD for Nurse Aides (“NAs”); (2) a requirement to have an RN on-site 24 hours a day, seven days a week (the “24/7 RN On-Site Requirement”); and (3) improved facility assessment requirements, which may require staffing above these minimum standards.

a. Minimum Nurse Staffing Standards

The Proposed Rule clarifies that LTC facilities must have sufficient staffing as a matter of regulatory compliance with CMS’s participation requirements for LTC facilities. CMS proposes individual minimum nurse staffing standards of 0.55 HPRD for RNs and 2.45 HPRD for NAs. These standards are based on the 2022 Nursing Home Staffing Study evidencing statistically significant differences in safety and quality of care at these levels, which are higher than current state minimum requirements in all states and D.C., with the exception that D.C. has a more stringent RN staffing standard.12 Per the federal participation requirements, these individual minimum nurse staffing standards would be assessed through CMS’s existing survey, certification, and enforcement processes.13 Consequently, if LTC facilities violate these federal participation requirements, CMS or the state may terminate the provider agreement and/or impose additional remedies, including, but not limited to, denial of payment for Medicare and/or Medicaid individuals by CMS, civil monetary penalties, transfer of residents, and a directed plan of correction.

Importantly, the Proposed Rule sets forth a hardship exemption to these individual minimum nurse staffing standards, which would be granted for a one-year period, with an opportunity for extension in one-year increments if the LTC facility continues to meet exemption criteria. Prior to being granted an exemption, the LTC facility must first be surveyed and found noncompliant with the minimum staffing requirements. Then, the LTC facility would be required to demonstrate that it meets the following criteria:14

  • Location. The LTC facility must be located in an area with a low supply of applicable health care staff (between 20 and 40 percent below the national average, as calculated by CMS using the Bureau of Labor Statistics and Census Bureau data) or 20 miles or more from another LTC facility.
  • Demonstrated Good Faith Effort to Hire and Retain Staff. The LTC facility must have developed and implemented a recruitment and retention plan and shown that they were unable, despite diligent efforts (e.g., job postings, competitive wage offerings), to recruit and retain appropriate nursing staff.
  • Demonstrated Financial Commitment. The LTC facility must provide documentation of the annual financial resources expended on nurse staffing relative to revenue.
  • Exclusions. The LTC facility must not be eligible for an exclusion if it: (1) failed to submit its data to the Payroll-Based Journal System; (2) has been identified by CMS as a Special Focus Facility;15 or (3) has been cited as having patterns of insufficient staffing with resultant harm or immediate jeopardy to resident health and safety within the 12 months preceding the survey.

The proposed criteria are not all framed as bright-line threshold standards. For example, the criteria related to demonstrated financial commitment does not define a required proportion of financial resources that a LTC facility must expend on nurse staffing relative to revenue. Additionally, CMS does not clearly state what efforts constitute “good faith” efforts to hire nursing staff. There are, therefore, some ambiguities with the proposed criteria of the hardship exemption. We anticipate that stakeholders will likely request that CMS clarify these ambiguities as part of the final rule.

b. 24/7 RN On-Site Requirement

The Proposed Rule would require LTC facilities to have an RN on-site for 24 hours a day, seven days a week. Currently, regulations only require than an RN be on-site for eight consecutive hours a day, seven days a week.16 Full-time RN coverage ensures that facility residents can receive appropriate care and clinical assessment in a timely manner, which has become increasingly important as LTC facilities treat patients with more acute care needs. In fact, the National Academies of Science, Engineering, and Medicine has recommended full-time RN on-site coverage to reduce the number of preventable safety events that occur in the absence of an on-duty RN.17

c. Updates to Facility Assessment Requirement

The Proposed Rule also requires that LTC facilities strengthen supplemental facility staffing assessments, which may require facilities to supplement the minimum staffing requirements described above. Currently, facilities must conduct, document, and annually review a facility-wide assessment to determine what resources are necessary to competently care for their residents during both day-to-day operations and emergencies.18 To underscore the importance of the facility assessment requirements, CMS first proposes to redesignate the existing facility assessment requirements to its own standalone section. The proposed changes to the facility assessment requirements include the following:

  • Evidence-Based, Data-Driven Methods. LTC facilities must use evidence-based, data-driven methods when care-planning for residents that consider factors such as condition types, physical and behavioral issues, cognitive disabilities, and overall acuity.
  • Evaluation of Skill Sets. LTC facilities must evaluate staff skill sets, in addition to staff competencies, to better serve the level and type of care needed for their resident population.
  • Input of Facility Staff. LTC facilities must include the input of facility staff (e.g., nursing home leadership, management, and direct care staff) in their facility assessment.
  • Implementation. LTC facilities must use facility assessment results to inform staffing decisions.
  • Staffing Plan. LTC facilities must develop and maintain a staffing plan to maximize recruitment and retention of nursing staff.

d. Implementation Timeline

The Proposed Rule sets forth three phases—over the course of three years—for the implementation of staffing proposals described above.19 In Phase 1, LTC facilities would be required to comply with the proposed facility assessment requirements 60 days after the publication date of the final rule. In Phase 2, LTC facilities would be required to comply with the 24/7 RN On-Site Requirement two years after the publication date of the final rule. In Phase 3, LTC facilities would be required to comply with the individual minimum nurse staffing standards three years after the publication date of the final rule. A delayed timeline would apply to LTC facilities located in rural areas, as defined by the U.S. Census Bureau, which would require compliance with (1) the facility assessment requirement 60 days after the publication date of the final rule; (2) the 24/7 RN On-Site Requirement three years after the publication date of the final rule; and (3) the minimum nurse staffing standards five years after the publication date of the final rule.

e. Medicaid Institutional Payment Transparency

In addition to the three staffing proposals, the Proposed Rule seeks to promote greater transparency related to the percentage of Medicaid payments for services expended on direct care workers and support staff services in NFs and intermediate care facilities for individuals with intellectual disabilities (“ICF/IID”). Specifically, CMS proposes a new Medicaid Institutional Payment Transparency provision, which would require state Medicaid agencies “to publicly report the percentage of payments expended for direct care workers and support staff services in Medicaid-participating nursing facilities and ICF/IIDs.”20 This provision would not set a minimum percentage of Medicaid payments for direct care workers and support staff services. The purpose of this proposed provision is to promote accountability and transparency around compensation for direct care workers and support staff, and to address the connection between sufficient payments and quality of services. While some states have already voluntarily established similar transparency policies, this proposed provision would establish a federal requirement to support nationwide payment transparency.

IV. Health Care Regulatory Implications

a. Burden of Complying with Proposed Staffing and Facility Assessment Standards

The proposed RN staffing requirement appears to be higher than corresponding requirements in all states and only lower than that of D.C., while the proposed NA staffing requirement appears to be higher than corresponding requirements in all states and D.C., although such standards differ widely across states.21 Particularly for states with lower thresholds, the Proposed Rule imposes substantial burden, and the facility assessment requirements only heighten this burden. LTC facilities in rural areas are given a bit more flexibility, and the hardship exemption as drafted is quite broad, but is likely subject to further clarification. Each LTC facility must use the findings of its facility assessments to determine whether additional resources or staff are necessary to care for its resident population. For those LTC facilities in states that do not already have minimum nurse staffing standards, or that are located in rural areas, compliance may be more difficult. Such LTC facilities may consider seeking the hardship exemption, and therefore must assess whether they fulfill the proposed prerequisite criteria.

b. Strategies for Meeting Minimum Staffing Standards

To meet the individual minimum nurse staffing standards, LTC facilities should consider strategic ways to rely on pre-existing relationships with hospitals and other health care partners while considering the potential fraud and abuse implications of these strategies. For example, LTC facilities may consider ways to partner with hospitals and academic medical centers, either formally or informally, such as by leveraging their transfer agreements to allow for such institutions to serve as a referral source for nursing staff. LTC facilities could also consider supplementing staff with nurse trainees that complete some of their training in LTC facilities. Such arrangements could implicate the federal Anti-Kickback Statute (“AKS”) if remuneration (e.g., in the form of cash payments or free services) is used to generate business for the LTC facility. If such strategies are considered, applicable safe harbors under AKS should be analyzed closely.

In addition, LTC facilities should consider partnering with nurse staffing agencies to meet the proposed staffing standards. During the COVID-19 PHE, many LTC facilities turned to nurse staffing agencies to address understaffing; however, such measures are generally thought of as a temporary fix, and consequently result in shorter-term contracts. Nevertheless, nurse staffing agency models are expanding, and these agencies could consider using a staff-to-employ model to work with LTC facilities in implementing staffing plans that develop as a result of facility assessments. Such partnerships will require close review of relevant licensure requirements to ensure compliance, as well as an understanding of the limitations on the use of international nurses.22

c. Funding to Meet Minimum Staffing Standards

LTC facilities and their partners are seeking ways to offset increased nurse staffing costs with new revenue opportunities. In particular, LTC facilities may look to opportunities in venture capital and debt financing or private fundraising or acquisition opportunities to obtain the funding necessary to recruit and maintain nursing staff to meet the proposed standards. Furthermore, LTC facilities may consider partnerships with academic medical centers to offset costs of other services and operations provided by LTC facilities to allocate more funding to nurse staffing. If private funding opportunities are being considered, LTC facilities should be aware that such strategies may implicate state determination of need, change of ownership, and corporate practice of medicine laws.

V. Conclusion

If finalized as proposed, the Proposed Rule has material implications that will require LTC facilities to assess their facilities, understand their resident population, and develop and implement a staffing plan that ensures the safety of, and quality of care provided to, their residents. Strategies that LTC facilities should consider employing in anticipation of an ensuing final rule include:

  • Revisit internal policies to align with the proposed federal minimum staffing standards;
  • Conduct annual risk assessments and implement auditing and monitoring;
  • Foster relationships with contracting partners to fill gaps where needed;
  • Lock in essential long-term suppliers; and
  • Seek alternative funding.

If you have questions about interpreting the Proposed Rule, navigating the proposed criteria for the hardship exemption, or strategizing to meet the proposed minimum staffing standards, please do not hesitate to contact one of the authors or your regular Ropes & Gray advisor.

  1. LTC facilities include skilled nursing facilities for Medicare and nursing facilities for Medicaid.
  2. 88 Fed. Reg. 61,352 (Sept. 6, 2023).
  3. 88 Fed. Reg. at 61,357–58.
  4. Social Security Act §§ 1819(b) and 1919(b). See also 42 C.F.R. § 483.1(a).
  5. Social Security Act §§ 1819(b)(4)(C)(i) and 1919(b)(4)(C)(i).
  6. Social Security Act §§ 1819(b)(2)–(3) and 1919(b)(2)–(3).
  7. Set forth at 42 C.F.R. §§ 483.1 through 483.95.
  8. 88 Fed. Reg. at 61,358. U.S. Department of Health & Human Services Office of Inspector General, OEI–04–18–00450, Some Nursing Homes’ Reported Staffing Levels in 2018 Raise Concerns; Consumer Transparency Could Be Increased (August 2020), available at https://oig.hhs.gov/oei/reports/OEI-04-18-00450.pdf.
  9. 88 Fed. Reg. at 61,358.
  10. Abt Associates, Nursing Home Staffing Study Comprehensive Report (June 2023), available at https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
  11. HPRD is defined as “staffing hours per resident per day which is the total number of hours worked by each type of staff divided by the total number of residents as calculated by CMS.” 88 Fed. Reg. at 61,368.
  12. The 2022 Nursing Home Staffing Study showed that “there was a statistically significant difference in safety and quality care at 0.45 HPRD for RNs and higher including 0.55 HPRD; [and] there was a statistically significant difference in safety and quality care at 2.45 HPRD and higher for NAs.” 88 Fed. Reg. at 61,357. CMS further noted that it arrived at these minimum standards by conducting a cost and benefit analysis “that would yield the strongest improvements in quality and safety for residents.” Id.
  13. CMS’s enforcement authority is granted under §§ 1818(f)(1) and 1919(f)(1) of the Act.
  14. 88 Fed. Reg. at 61,378.
  15. Pursuant to the Special Focus Facility Program established under §§ 1819(f)(8) and 1919(f)(10) of the Social Security Act.
  16. 42 C.F.R. § 483.35(b)(1).
  17. National Academies of Sciences, Engineering, and Medicine, The National Imperative to Improve Nursing Home Quality: Honoring Our Commitment to Residents, Families, and Staff (2022), available at https://nap.nationalacademies.org/catalog/26526/the-national-imperative-to-improve-nursing-home-quality-honoring-our.
  18. 42 C.F.R. § 483.70(e).
  19. 88 Fed. Reg. at 61,380.
  20. 88 Fed. Reg. at 61,365.
  21. While some states have implemented RN- and NA-specific staffing requirements, many states have instead implemented total HPRD models, which would require a certain number of hours of direct nursing care per resident without specifying the number of hours required for each nursing role. 88 Fed. Reg. at 61,367.
  22. See, e.g., Dave Muoio, State Department cap on EB-3 visas limits international relief for nursing shortage, Fierce Healthcare (April 24, 2023), https://www.fiercehealthcare.com/providers/state-department-cap-eb-3-visas-limits-international-relief-healthcares-nursing-shortage