Price of proposed nursing home staffing mandate? Try $11.3B a year, new AHCA report finds

The American Health Care Association Thursday released an updated report from accounting and consulting firm CliftonLarsonAllen detailing the costs of a potential federal staffing mandate for America’s nursing homes. 

“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.”

The White House in February proposed establishing a minimum staffing requirement for nursing homes. According to the report, CLA estimates more than 191,000 nurses and nurse’s aides would be needed at the annual cost of $11.3 billion for nursing homes to meet a staffing minimum of 4.1 hours per resident day. Those estimates are up from June, when CLA estimated an additional 187,000 caregivers and an annual cost of $10 billion would be required.

Nursing homes cannot absorb the costs associated with a federal staffing mandate on their own, according to AHCA. The majority of residents rely on Medicaid and Medicare. The sector is chronically underfunded and now facing increased costs due to COVID and inflation, the association said. CLA also referenced a separate report that found that nearly 60% of skilled nursing facilities currently are operating with negative margins.

Although the number of facilities nationwide that are reaching the magic number of 4.1 hours per resident day and other criteria set by the White House has improved slightly from the previous analysis in June, the CLA said the cost to meet those criteria has increased from the original analysis. Operators have necessarily increased hourly wages for staff in the wake of labor challenges, the authors said.

“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,”  Harmon said.