As a slew of regulations and mandates befall the nursing home industry, such changes could create legal hurdles and suggest another difficult and onerous year for providers.
Staffing mandates, the consequences of the end of public health emergency responsibility (PHE) Covid and the PREP Act, all create “existential threats” to skilled nurse operators, at a time when so many are still trying to recover from the past two and a half years.
“It’s going to be a really, really tough year after a number of other tough years… Bad policy in any of these particular areas could have very significant consequences, and that’s the kind of thing those of us us who spend every day thinking about this stuff,” Mark Reagan, managing shareholder of Hooper Lundy & Bookman PC, told Skilled Nursing News.
Reagan also represented the California Association of Health Facilities and the American Health Care Association (AHCA).
The challenges associated with staffing and ongoing Covid-related lawsuits alone have the capacity to create huge hurdles for operators, according to Craig Conley, a shareholder at law firm Baker Donelson Bearman Caldwell & Berkowitz.
According to Reagan, it is about finding a balance between advocating for the sector with stakeholders in a way that advances some of the underlying political interests while ensuring that there is realism associated with what can be accomplished.
“The sector has incredible resilience which I have seen in my three decades of professional life representing the sector, but there are many existential threats… And so serious challenges continue. There’s no other way to think about it than that,” he told SNN.
Minimum endowments and mandates at the state and federal level
Suppliers agree that staffing continues to be the biggest challenge facing the industry right now, and that’s not expected to change as the federal government works to create its own federal staffing standard.
The Centers for Medicare & Medicaid Services (CMS) is expected to release a minimum proposal in the spring of 2023, if not sooner.
Meanwhile, federal officials are conducting a staffing study that includes site visits to nursing homes as well as cost analyses, among other qualitative and quantitative considerations.
Several questions surround the impending mandate, including whether it will be achievable, whether it will be tied to the presence of personnel, whether it will be phased in or whether it will be the subject of some sort of pilot program, Reagan said. .
“I think there are a lot of different potential options on how it could happen, but insofar as it’s set at a level that’s not sustainable and imposed on a timeline that’s not sustainable , I think that raises a number of questions about the underlying legality of such a warrant,” he said.
According to data from accounting and consulting firm CliftonLarsonAllen in partnership with AHCA, implementing a minimum of 4.1 staff hours per day per resident would require 94% of care homes to increase their staffing levels just to be in compliance.
Some states that have minimum staffing requirements in place have already had to make policy revisions given the current state of the labor market — and facilities that are unable to comply.
New York State’s staffing requirements were originally scheduled to go into effect in January of this year, but were delayed until April by Governor Kathy Hochul.
The state’s more than 600 nursing homes are required by law to provide 3.5 hours of care per resident per day.
About two-thirds cannot meet the minimum, Stephen Hanse, president and CEO of the New York State Health Facilities Association, said earlier this year.
Potential legal questions also relate to whether CMS has the authority to impose a minimum endowment mandate without congressional action, and if so, whether it could create future access issues for grantees. of Medicaid, Reagan said.
“I know the industry’s goal is to try to reach a reasonable compromise along those lines, but I think if that’s not reached, I think every single action or those are the kinds of issues that I ‘ve described… It might involve potential litigation at some point,” he added.
A budgetary precipice at the end of the health emergency
While the PHE remains in effect, providers and legal experts wonder what the impact will be for facilities if temporary programs such as increased Medicaid funding end.
The challenge now for advocacy groups is to convince heads of state to maintain these permanent increases.
AHCA President and CEO Mark Parkinson told SNN earlier this year that would be the association’s “top priority” for 2023.
Some states have already taken steps towards these efforts.
In California, for example, the 10% fare increase from 2019 will remain in place through 2023, whether or not the PHE ends before then.
The $700 million in Illinois facility staffing incentives implemented this year involve a data-driven staffing ratio program and salary incentive initiative — specifically the CNA’s tenure and promotion payment program to increase and maintain salaries for certified practical nurses.
“States that create permanent solutions to recognize these internal increases in labor costs will be better off when it comes to being able to provide access. Those who just have a hard stop and a cliff, it’s going to be a real problem and a real challenge,” Reagan said.
It remains to be seen whether the federal government will step in if Medicaid increases are not made permanent, although CMS has encouraged states to allocate funds for improved staffing – in line with its goals of strengthening health. quality of care, accountability and transparency in the sector. .
“Through initiatives like these, we expect Medicaid beneficiaries residing in nursing care facilities to receive better care through CMS and states working together to achieve the goals set out in the plan. nursing home reform action by the Biden-Harris White House administration,” Daniel Tsai, deputy administrator and director of the Center for Medicaid and CHIP Services, said in an August memo.
Tsai called Medicaid “a key lever” for achieving goals set by the Biden administration.
Covid liability cases and the PREP law
Although the Covid-19 pandemic has not necessarily created the “tsunami” of lawsuits that many legal experts expected, liability issues, including the Public Preparedness and Emergency Preparedness Act (PREP) , should remain in the minds of suppliers.
Many cases involving the PREP Act are currently at the stage of determining where the cases are to be heard, whether in federal or state court. But that will soon turn into a fight over whether the law protects nursing home providers, according to Reagan.
The law, established by Congress in 2005, provides immunity from liability, except for willful misconduct, against certain legal actions. The protection can be used in state and federal courts, and will continue to be used after the PHE.
Usually, when state and federal laws conflict, federal law takes precedence over state law, pursuant to the Supremacy Clause of the US Constitution. But that hasn’t really been the case for these nursing home cases.
The United States Supreme Court has been asked to decide whether it will hear a wrongful death case in a Covid-19 nursing home involving the PREP law – potentially interpreting federal law for the first time.
California-based nursing home operator Glenhaven Healthcare asked the Supreme Court to consider hearing the case in late August after the 9th United States Circuit Court of Appeals upheld more earlier this year a lower court’s decision to keep the case in state court.
Another issue concerns the role of insurance, or lack thereof, in dealing with these cases. Many insurers have offloaded responsibility for covering these issues amid the pandemic, creating a “significant fork” if providers were to take legal action and potentially settle or pay damages, Reagan said.
While the flood of lawsuits in the early stages of the pandemic didn’t materialize as expected, Conley said he’s seen an increase in care-related cases during the pandemic – what he calls “snapshot lawsuits.” .
“I think the recent surge in Covid-related lawsuits will likely continue, as memories fade as some of the immunity laws disappear and some of the other protections pass their deadlines and are no longer in place.” , did he declare. “I think Covid-related staffing and lawsuits, especially the so-called instant lawsuits, will be an ongoing hurdle for the industry and suppliers to manage.”