CMS is on the verge of proposing new mandatory staffing levels at SNFs, a move that could improve care quality but may cost the industry billions of dollars. Learn about three ways the mandate could unfold — and how to prepare for what comes next.

CMS is nearing the end of its year-long study to determine mandatory staffing levels at SNFs nationwide. The impetus for doing so is to improve quality at SNFs in response to poor outcomes that were exacerbated by the pandemic.

In a 2001 report by CMS, a ratio of 4.1 hours per patient day (HPPD) was recommended nationwide. However, this ratio has remained a recommendation and has never been made law. Nationally, there are no federal requirements for per-patient care hours—and only Washington DC currently mandates more than 4.1 HPPD, though other SNFs may voluntarily staff to this level.

SNFs across the country face serious barriers to maintaining or growing their staffing levels. Staffing shortages continue to plague the SNF industry and recent reports project staffing won’t return to pre-pandemic levels until 2027. An aggressive mandate—without financial or workforce pipeline assistance from the government—will lead to an existential crisis for SNFs and will trigger ripple effects for the entire healthcare industry.

Three possible staffing mandate scenarios

Previous studies on SNF staffing have explored the impact of implementing various staffing requirements. Though CMS has not indicated their specific plans, the following three staffing scenarios illustrate the cost to the industry of maintaining staffing at different levels and may indicate how far the CMS mandate will go.

The most extreme staffing levels CMS could mandate is 4.1 HPPD, as recommended in 2001, but this is highly unlikely. Higher staffing minimums should, in theory, raise quality of care for patients. However, 94% of SNFs today do not meet this requirement—and it would cost all SNFs $10.1 billion annually to maintain.

Even a lower staffing minimum requirement would have significant implications. Under a less-extreme mandate of a 3.1 HPPD as projected by a CLA analysis last year, only 27% of SNFs are currently meeting this requirement. Maintaining this level for all SNFs would cost an estimated $3.5 billion annually.

Most realistically, we expect the new staffing requirements will mandate a baseline HPPD—likely less than 3.1 HPPD. If CMS is successful in increasing payment rates for SNFs, this could enable a slightly higher requirement. CMS will not want to contribute to a shortage of post-acute beds and industry disruption. As increased payment rates allow, it is likely their requirement will be realistic for the majority of SNFs to meet.

Why adding staff is hard for SNFs

There are shortages of healthcare workers across the industry, but SNFs have unique challenges that make it especially difficult for them to recruit and retain staff.

SNFs struggle to add new workers for two primary reasons: financial shortfalls, and reputational damage that limits prospective employee interest in working in the SNF setting. 

The majority of SNF patients are on Medicaid, which does not reimburse enough for SNFs to break even on the care they deliver, and only about 13% of patients are on higher-paying Medicare FFS plans. Additionally, Medicare Advantage plans are incentivized to either avoid SNFs or limit the length of stay at those sites for their beneficiaries. As such, SNF wings are occasionally converting to assisted living, increasingly rejecting referrals, and sometimes closing altogether.

Compared to hospitals and health systems, SNFs have little financial ability to attract the graduates of these programs and fill positions that remain open even without a staffing minimum. In addition, prospective employees may have negative perceptions about the SNF work environment and opportunities for career growth. These challenges underscore additional factors causing delays in transitions to post-acute care, which you can read about more here. 

Implications for the Industry

• Slower transitions from hospital to post-acute care, leading to reduced hospital throughput and longer length of stay.  As SNF beds become limited, hospitals will face throughput challenges with backed up emergency departments and longer inpatient lengths of stay without appropriate discharge options. As such, other post-acute sites must prepare for increased demand. High acuity patients will go to IRF/LTACH, but these are expensive options, and not available to or appropriate for all patients.

• Financial pressure on patients—and potentially poor outcomes for those unable to pay.  Lower acuity patients who are unable to find a SNF placement will need assisted living home health, family caregivers, or some combination of all three. Not everyone can afford private-pay assisted living, and depending on the scope-of-practice laws for assisted living in each state and the patient’s level of need, some facilities will not be able to provide a sufficiently high level of clinical care. Home health does not provide round-the-clock care or support with activities of daily living, so these patients often require additional paid caregivers or a full-time family caregiver—expensive, and often impossible options.

• Staffing minimums for other care settings. Once a SNF staffing mandate is imposed, it is possible that these other sites of care will also see increased regulation and staffing requirements.

How your organization can prepare

The staffing mandate and increased industry constraints will put significant pressure on SNFs. SNF leaders will need to continue to strengthen their employee value proposition and help prospective employees understand the unique, valuable experiences staff can gain working at SNFs.

As hospitals anticipate increased throughput challenges, they will need to collaborate with SNF partners to ease the discharge process from hospital to SNF, potentially through closer care coordination or offering joint trainings for SNF staff alongside hospital staff. Collaborating with these care settings now is an investment in future hospital throughput, reducing hospital LOS, and ensuring patients get the level of care they need.