Opinion: Staffing law creates an uncertain future for RI's nursing homes. Here's why
Robert B. Hackey is a professor of health sciences at Providence College and an adjunct lecturer in international and public affairs at Brown University.
The nursing home industry in Rhode Island faces unprecedented financial challenges in 2023. Several nursing homes have closed in recent years. Enforcing the Nursing Home Staffing and Quality Care Act could push many facilities into bankruptcy if the state Department of Health imposes fines on nursing homes that cannot meet the minimum staffing requirements established by the General Assembly in 2021.
Gov. Dan McKee’s executive order in February 2022 suspended these financial penalties to preserve the availability of resident care in nursing homes, but the Department of Health is now preparing to issue financial penalties for facilities that do not comply with the new regulations. Doing so would have a dire effect on the state’s health care system.
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During the second quarter of 2022, 55 of the 77 nursing facilities would have faced more than $11 million in financial penalties. Penalties for not meeting staffing requirements increase over time, rising from “200% of the calculated labor shortage expense” for the first quarter of noncompliance, to 250% in the following quarter, and 300% afterwards. The financial impact of such penalties would be devastating.
In addition, facilities that cannot recruit enough staff to meet the requirements will also be required to suspend new patient admissions after four quarters of noncompliance. This limits nursing home revenues as they struggle to recruit new staff with higher pay, signing bonuses, or expensive contracts with temporary staffing agencies. John Gage, the president of the Rhode Island Health Care Association, noted that the underlying problem is that “there’s just no willing people looking to fill these jobs.”
Indeed, the state’s nursing home workforce shrank by nearly 2,000 workers (20%) from 2019-2022. Facilities thus face a classic Catch-22. They cannot find enough workers to meet the state’s new staffing requirements — and if they don’t, the state will impose draconian financial penalties.
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The impact of nursing home closures would reverberate throughout the state’s health care system, disrupting care for vulnerable residents and their families. Nursing homes also provide essential rehabilitation services for patients discharged from hospitals to less acute care settings. In Massachusetts, 25 nursing homes closed from March 2020 to December 2022, and four nursing homes in western Massachusetts recently announced they would cease operations this spring. Even before the latest closures, a recent survey by the Massachusetts Hospital Association found nearly 900 patients remained in limbo, waiting for beds in nursing homes or inpatient rehab facilities.
In addition, a shortage of nursing home beds could affect the financial well-being of the state’s hospitals. Hospitals might have to postpone surgeries or freeze admissions if patients cannot be safely discharged to other care settings. Furthermore, closures would impact revenues for local governments. A majority of the state’s nursing homes are for-profit institutions that are major employers in communities. For-profit nursing homes also support local governments by paying property taxes. The McKee administration recently pledged to “to assess Rhode Island’s existing minimum staffing requirements and evaluate solutions that support residents, workers, and the long-term health of facilities.”
By pausing mandatory penalties for nursing homes unable to meet staffing requirements, the McKee administration can give legislators much needed time to explore options to address the staffing shortage. While policymakers examine longer-term solutions, the administration should take immediate steps to avoid a preventable fiscal crisis for Rhode Island’s nursing homes.
This article originally appeared on The Providence Journal: Staffing law poses a Catch 22 for RI nursing homes | Opinion Column
