The minimum staffing rule that most nursing homes will be required to meet within the next three years will add to staffing pressures at continuing care retirement / life plan communities, but it will not affect their ratings, according to a new report from Fitch Ratings.
If the draft rule released earlier this month by the Centers for Medicare & Medicaid Services is implemented as written, non-rural nursing homes will be required to provide a minimum of three hours per patient day of direct care — 0.55 hours of that care by a registered nurse and 2.45 hours by a nurse aide — within three years. Rural nursing homes will have five years to implement the overall hourly rate.
Ratings will not be affected, Fitch said, because although most CCRCs contain a skilled nursing component, they also include other service lines, such as independent living and assisted living, and can adjust the number of skilled nursing beds in service.
“Private-pay [independent living] units, which are a key driver of financial performance and generally comprise the largest number of units at Fitch-rated [life plan communities], are not subject to the proposed staffing requirements,” noted Gary Sokolow, Fitch director of US Public Finance, and Sarah Repucci, Fitch senior director of credit policy – research.
Even so, in addition to skilled nursing facilities, assisted living also is at risk of losing staff members following this first-ever proposed federal staffing mandate for nursing homes, according to senior living experts. Competition for workers, especially nurses and other caregivers, may increase at a time when all providers already face recruiting and retention challenges.
“Assisted living communities are at risk of losing staff,” National Center for Assisted Living Executive Director LaShuan Bethea previously told McKnight’s Senior Living. “No matter where an assisted living community sits on this continuum, a federal minimum staffing mandate threatens to take away the essential staff on which these communities depend to provide high-quality care for hundreds of thousands of residents.”
But most of Fitchs’ rated CCRCs “are positioned to manage the proposed staffing requirements, as revenues from [independent living] can offset the additional skilled nursing staffing expenses,” the company said. Although those communities have been able to pass along higher costs to residents, however, Fitch cautioned that rental fee increases are not a long-term fix.
“Should these inflationary pressures persist beyond the next two years, [life plan communities] may encounter resistance from residents to the substantial rate increases that may be required to offset the added cost pressure,” Margaret Johnson, Fitch senior director and US life plan community group head, said in an unrelated press release issued earlier this month.