Nursing Homes Need $11.3B Annually to Meet Proposed Staffing Minimum

It was previously estimated that 187,000 caregivers would be needed, costing $10 billion annually.

Last February, the Biden administration proposed establishing a minimum staffing requirement for the nation's nursing homes, but did not provide the monetary resources to accomplish the mandate. A recent report from CLA (CliftonLarsonAllen LLP), an accounting and consulting firm, estimated that for facilities to meet the requirement, over 191,000 nurse and nurse aides will need to be hired, estimated to cost $11.3 billion annually.

These numbers have grown from CLA's previous estimate of 187,000 caregivers to meet the requirement, with an annual cost of $10 billion.

According to the American Health Care Association (AHCA), throughout the pandemic, nursing homes have lost more staff than any other sector in healthcare—more than 200,000. As a result, some nursing homes say they can’t take new patients, and nearly three-quarters are concerned their facilities may close due to workforce shortages. 

"This report once again highlights how our nation's policymakers should be investing in our long-term caregivers, not mandating quotas," AHCA President and CEO, Mark Parkinson, said in a statement. "Nursing homes have been doing everything they can do to recruit and retain staff—including increasing wages—but it has not been enough to stem the tide."

"If Washington wants to increase staffing in nursing homes, then they need to put their money where their mouth is. Otherwise, we'll fail to address the underlying issue here, and our residents will have fewer long-term care options."

With the ongoing workforce shortage and increasing labor costs, as well as facilities being severely underfunded, the staffing minimum is not a feasible solution for the workforce shortage in nursing homes. The report, released in December, found that 94% of nursing homes wouldn't be able to meet the proposed 4.1 HPRD (hours per resident day) minimum.

Additionally, more than one-third of nursing home residents would be at risk of displacement if a facility was unable to comply with the staffing minimum.

"The additional burden of meeting minimum staffing requirements with no funding mechanism will potentially increase the number of facilities operating with negative margins," Deb Emerson, principal at CLA, said in a statement. "Although there have been improvements in workforce availability in some areas of the country, nationally nursing homes are still challenged to find the appropriate workforce."

"If nursing homes are unable to increase their workforce, hundreds of thousands of residents could be impacted by census reductions."

According to a statement by the AHCA, the majority of nursing home residents rely on Medicaid and Medicare, whose reimbursement rates don't cover the full cost of care. As facilities begin to recover from the toll of the pandemic, inflation has further exacerbated strained finances. In separate report CLA referenced almost 60% of nursing homes were operating with negative margins.

"Unfunded staffing mandates do not create jobs or attract individuals to apply," Holly Harmon, RN, AHCA's senior vice president of quality, regulatory, and clinical services, said in a statement. "Investing in our caregivers, developing recruitment programs, and building a pipeline of caregivers will help us rebuild the long-term care workforce."