For the Biden administration, the over 200,000 COVID-related deaths of nursing home residents and staff have served as a powerful signal for the need for nursing home reform. As part of the administration’s reform efforts, CMS recently issued guidance on August 22, 2022 in an informational bulletin that aims to strengthen the correlation between nursing home quality measures and reimbursement.

In addition to directing CMS to take certain nursing home reform actions, the Biden administration plans to improve the quality of care in nursing homes by:

• Seeking a $500,000,000 appropriation to HHS directing the agency to improve its inspection processes and procedures, and develop a database that tracks nursing home operators with known healthcare-related violations to increase transparency in nursing home reporting requirements;
• Increasing enforcement activity and scrutiny of low performing nursing homes;
• Recommending that CMS promulgate guidance prohibiting nursing home owners from entering into Medicaid provider agreements if they have a history of owning underperforming or non-compliant facilities and that CMS have the ability to initiate enforcement actions against owners after their nursing home facility closed;
• Directing CMS to implement the results of its study examining the appropriate minimum staffing requirement for nursing homes. CMS will make this minimum staffing requirement a mandatory requirement for all nursing homes;
• Relatedly, directing additional funds to make nursing home aid training and certification more affordable in an effort to increase the number of individuals interested in pursuing this career path;
• Instructing HHS to phase out three-person occupancy rooms and to promote single-occupancy rooms in nursing homes to reduce the spread of infectious diseases;
• Directing CMS to modify its Medicare and Medicaid reimbursement methodology to account for staff retention, resident satisfaction, and staffing adequacy. The Biden administration also directed CMS to improve information sharing and implement communication best practices; and
• Developing robust policies to prevent inappropriate diagnoses and prescriptions (particularly with respect to anti-psychotic drugs).

As noted above, the Biden administration has tasked CMS with implementing these nursing home care reforms. To that end, CMS’s recent informational bulletin encourages states to support its goals by implementing new measures with respect to reimbursement either by changing the methodology used to calculate the base rate or by adding a separate value-based program payment as a monetary incentive to improve nursing home operations. This would essentially shift reimbursement from volume-based to value-based by factoring in measurements for value-based care indicators such as:

• How many single-occupancy rooms versus multiple occupancy rooms are utilized by a facility;
• Establishing staffing incentives such as minimum payment standards for staff; and
• Increasing payments to facilities that achieve quality standards set by CMS (e.g., Nursing Home Five-Star Quality System) or standards independently developed by states based on their synthesis of state-wide performance data.

In addition to the above steps aimed at improving the quality of nursing home care, CMS has requested that states develop long-range solutions for training and improving staffing and workforce sustainability issues in nursing facilities as well as solutions to improve safety and quality in nursing homes in a manner that specifically addresses the needs of each state. For example, as previously noted, CMS has requested that states review their own state-specific data sources to identify measurable metrics by which CMS and states may monitor (and incentivize) improvements. CMS has offered to work with states as they review their data sources and identify potential metrics with the purpose of achieving the goals of the administration including evaluating and updating state emergency preparedness programs. CMS also requested that states revisit licensure criteria to incorporate the agency’s focus on increasing owner accountability and improving performance standards. CMS’s guidance urges states to think creatively to address the administration’s objective to improve the quality of care provided by nursing homes.

Information on the White House Biden-Harris Administration’s Nursing Home Reform Action Plan is available here, and CMS’s information bulletin is available here.