Long-Term Care: Are Reforms on the Horizon?

As the COVID-19 pandemic continues to wane, calls to reform one of the healthcare sectors hit hardest by it —the long-term care industry — are growing louder.

Older residents and people with disabilities were among those most vulnerable to COVID-19 and nursing homes often struggled to contain the virus. With the pandemic disproportionately affecting those who work or live in nursing homes, more than 200,000 residents and staff died as a result of COVID-19. The push for reform comes as the industry begins to take stock of the lessons learned during the pandemic.

In recent months, both the White House and a group of experts tapped by the National Academies of Science, Engineering, and Medicine (NASEM) have offered proposals to fix the systemic issues that often impede the delivery of high-quality care.

Those advocating for reform note that while many issues in the industry predate the pandemic, the pandemic has brought them to the forefront, and further underscored the need for change.

In this article, we will detail the proposals and recommendations put forward, the industry’s response, and what reforms could mean for litigation.

Federal Reforms

In February, President Joe Biden announced a set of reforms and proposals to improve nursing home care. Some reforms can be put into place through administrative rule-making, while others will require Congressional approval.

Biden identified three overarching goals: to improve the safety and quality of nursing home care, to hold nursing homes accountable for the care they provide, and to increase transparency surrounding nursing home ownership.

He announced that the Centers for Medicare & Medicaid Services (CMS) will launch several new initiatives, including establishing minimum nursing home staffing requirements.

Biden said CMS will conduct a study to determine the level and type of staffing needed to ensure nursing home residents get safe and quality care and will issue proposed rules on staffing within the next year.

“Establishing a minimum staffing level ensures that all nursing home residents are provided safe, quality care, and that workers have the support they need to provide high-quality care,” he said. “Nursing homes will be held accountable if they fail to meet this standard.”

CMS will also seek to phase out shared rooms in facilities, launch a new effort to ensure residents aren’t being over prescribed antipsychotic medications, and strengthen the Skilled Nursing Facility Value-Based Purchasing Program, which gives incentive funding to facilities based on their performance.

Biden’s proposals that include either the levying of penalties or budgetary needs will require the approval of Congress.

In this area, Biden has called on Congress to fund a nearly 25 percent increase in CMS’s budget, $500 million, to pay for more health and safety inspections at nursing homes.

Biden is also eying increasing financial penalties for poor-performing facilities, calling on Congress to raise the dollar limit on per-instance financial penalties it can levy on poor-performing facilities from $21,000 to $1 million.

That marks a major shift from the previous presidential administration, which lowered penalty amounts by imposing a one-time fine rather than a per-day fine. Under Biden’s reforms, CMS will explore making per-day penalties the default penalty for failing to comply with federal guidelines, he said.

In line with his priority to provide more transparency to the industry, Biden is calling for the creation of a database of nursing home owners and operators, and for HHS to implement Affordable Care Act requirements regarding transparency in corporate ownership of nursing homes.

Additional proposed reforms center on strengthening the nursing home workforce, ensuring nursing homes are prepared to respond to emergencies and pandemics, and studying the impact of private equity ownership.

On the latter, the White House noted that private equity ownership has ballooned from $5 billion in 2000 to more than $100 billion in 2018. Private equity firms own 5 percent of all nursing homes in the U.S., the White House said.

Biden was critical of private equity ownership in nursing homes, noting research that has found resident outcomes are significantly worse compared to other ownership models of nursing homes.

NASEM Recommendations

Nearly two months after the White House announced its reforms and proposed reforms, NASEM issued a report concluding that “the way the United States finances, delivers, and regulates care in nursing home settings is ineffective, inefficient, fragmented, and unsustainable.”

The report was assembled by a committee of experts that convened in fall 2020 to study how the U.S. delivers, finances, measures, and regulates the quality of nursing home care.

The committee reached several overarching conclusions from their study. One of which is that the nursing home sector has suffered from decades-long underinvestment in the quality of care and a lack of accountability for how its resources are allocated. Additionally, the committee noted immediate action is required to make fundamental changes to the industry.

The committee made several recommendations for these changes, including some that overlap with the president’s proposals. One of its biggest recommendations is the creation of a federal long-term care benefit, which could resolve the existing system of paying for care, which the committee called “highly fragmented.”

While the committee acknowledged creating a new benefit would be politically challenging, the group said it’s the best solution for increasing access to long-term care and guaranteeing payment rates are adequate to cover the expected level of quality.

The group also called for:

• Collecting, auditing and making detailed facility-level data on finances, operations and ownership of all nursing homes publicly available
• Implementing strengthened oversight across facilities with a common owner
• Denying licensure and imposing enforcement actions on owners with a pattern of poor quality care across multiple facilities
• Incentivizing the use of electronic healthcare information technology

In its concluding remarks, the committee noted that it has been 35 years since the passage of the Nursing Home Reform Act, a landmark nursing home reform law. The group warned that the failure to act on its recommendations will guarantee the continuation of the conditions that prevent the delivery of high-quality care in all nursing homes.

“It is of the utmost importance that all nursing home partners work together to ensure that residents, their chosen families, and staff will no longer have to wait for needed improvements to the quality of care in nursing homes,” the committee said in the report. “The time to act is now.”

Industry Response

The American Health Care Association, which represents more than 14,000 nursing homes and long-term care facilities in the U.S., issued a statement in response to Biden’s announcement.

The group’s president and CEO, Mark Parkinson, noted improvements in the industry in the last decade, prior to the pandemic, and said increasing oversight without additional assistance will not improve care.

“To make real improvements, we need policymakers to prioritize investing in this chronically underfunded health care sector and support providers’ improvement on the metrics that matter for residents,” he said.

Last year, the ACHA and LeadingAge, a group representing aging services providers, announced their own reform agenda, encouraging passage of their Care for Our Seniors Act.

Many of the proposed bill’s recommendations are in line with recommendations from the committee and the White House.

The groups are calling for state and federal lawmakers to provide more financial resources, including increasing federal Medicaid funding to the states and bringing Medicaid rates up to the cost of care.

They are also seeking to address worker shortages through incentive programs like tax credits, loan forgiveness for workers, and assistance with both housing and childcare costs.

The proposed law has not yet been introduced in Congress.

Litigation Implications

New requirements for nursing homes will likely lead to additional litigation risk for nursing home owners and operators.

Healthcare attorneys are already anticipating an increase in the number of COVID-19-related cases against nursing homes before states’ statutes of limitation runs out. A New York attorney recently told Skilled Nursing News that she expects federal and state initiatives to address staffing levels will lead to even more claims against nursing homes.

While it is unclear whether Congress will approve legislation making fundamental changes to the system, nursing homes and other post-acute care facilities are already operating in an environment in which litigation is increasing and there are pressures to keep costs contained.

As long-term care facilities continue to face challenges in resourcing and demand coupled with a changing regulatory landscape, it’s important for leadership teams to have expert support to navigate forward. Med Law Advisory Partners has nearly 20 years of experience with long-term care facilities on both fronts, both assisting in the investigation of claims for merit and in preparing cases for litigation.

Our consulting nurse experts bring to their cases extensive expertise in direct patient care and administration in long-term care facilities. In each case, our team conducts a deep-dive analysis of the records, provides an initial opinion of liability, and provides a roadmap to facilitate the prompt resolution of the case. They are deeply familiar with the issues and guidelines unique to post-acute care claims.

Contact us today to learn more about how Med Law can partner with your long-term care facility.