CMS calls on states to tie Medicaid funds to high quality measures for nursing houses

The Centers for Medicare & Medicaid Services is asking states to use Medicaid payments to incentivize better outcomes for nursing home residents and improve staffing.

CMS issued a bulletin on Monday detailing actions states can take to improve care in nursing homes. The initiatives outlined can be implemented immediately through the Medicaid state plan, waiver or demonstration process. These include creating a minimum nursing home staffing requirement, reducing resident room crowding, strengthening the Medicare Skilled Nursing Facility Value-based Purchasing program, and reinforcing the safeguards against unnecessary medications and treatments.

The bulletin builds on a set of reforms the Biden administration announced in February.

“Our loved ones living in nursing homes deserve the highest quality of care, dignity, and respect,” said Health and Human Services Secretary Xavier Becerra in a news release. “At HHS, we’re taking another critical step to implement President Biden’s bold set of reforms to improve our nation’s nursing homes. We call on all states to work with us and ensure everyone has access to the high-quality care they deserve.”

Some states have already implemented programs that tie Medicaid payments to quality measures, according to CMS’ bulletin. This includes California, which provides increased payments to facilities that improve the quality of care to their residents. They reward facilities that perform at or above the state average, and assess them using quality indicators defined by CMS.

Another state is Illinois, which created a data-driven staffing ratio target program and wage incentive in 2022. The program supports facilities that increase and maintain the wages of Certified Nursing Assistants to improve retention. This in return leads to better outcomes for residents, CMS said in the report.

“We know that low wages for staff can contribute to frequent turnover and dangerous staffing shortages at nursing homes, so we encourage states to work with these facilities to find solutions for training and improving staffing,” said CMS Administrator Chiquita Brooks-LaSure.

The agency also recommended that states use federal and state data to improve the oversight of nursing facilities. Some states do this using the CMS Nursing Home Five-Star Quality Rating System. In this model, states are ranked between one and five stars, where five stars is considered above average and one star is below average.

Additionally, CMS called on states to use state-specific data to help find areas where staffing can be improved and develop solutions. For example, Connecticut created a 2% Medicaid rate increase for facilities that raise employee wages and salaries, improve health/dental benefits or retirement plans, or do a combination.

Lastly, following Covid-19, it asked states to review their emergency preparedness policies and incentivize facilities to be more prepared for future pandemics. However, it couldn’t provide any examples of states doing this currently.

While CMS’ announcement is a step in the right direction, more needs to be done, including fully funding nursing homes through Medicaid for the actual cost of care, said the American Health Care Association/National Center for Assisted Living.

“We appreciate CMS’ announcement today — we have long backed reimbursement programs that support and incentivize long term care providers to further enhance the quality of care delivered,” said Holly Harmon, senior vice president of quality, regulatory & clinical services at AHCA/NCAL. “First and foremost, Medicaid needs to fully fund nursing homes for the actual cost it takes to care for residents. Too many states fail to meet this baseline, and as a result, nursing homes are struggling to compete for workers and keep their doors open. We look forward to working with state and federal policymakers to continue to develop these quality-focused reimbursement programs.”

Photo credit: Drazen Zigic, Getty Images

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