Brief Ensuring Quality of Care in Long-Term Care Facilities

The COVID-19 pandemic revealed and exacerbated several challenges facing long-term care, or LTC, facilities, residents and staff. Despite LTC residents and staff making up less than 2% of the U.S. population, they have accounted for more than one-fifth of the nation’s COVID-19 deaths. Various studies have also found that, since the pandemic, LTC residents face high levels of loneliness and isolation, which can negatively affect their physical and mental health.  

Patients and families have long preferred home- and community-based services over institutional care, but since pandemic, the number of nursing home residents decreased by 13%. More than 450 nursing homes have closed since 2020. Nursing homes cite financial hardship related to the pandemic and low reimbursement rates for care as factors contributing to financial pressures. A recent report found 81% of nursing homes receive less than the cost of care for Medicaid patients (which accounts for nearly 60% of nursing home funding). 

Workforce shortages are creating challenges for LTC facilities. Around two-thirds of nursing homes are concerned their facility is at risk of closing due to persistent staffing shortages. Data suggests nursing homes have lost 241,000 employees—just over 15% of the sector’s total workforce—since the start of pandemic. 

There is also a growing trend of private equity involvement with LTC facilities. One study (using Centers for Medicare & Medicaid Services data) found that private equity-owned firms operated fewer than 1% of skilled nursing facilities in 2005; the percentage increased to 9% by 2015. The authors also found private equity ownership was associated with higher charges for LTC services and fewer front-line caregivers, among other differences.  

Given these concerns, states are considering various policy levers to ensure high-quality care in LTC facilities, including: 

• Improving state licensing and oversight of ownership structures. 
• Addressing direct care staffing shortages.  
• Bolstering quality reporting, transparency and metrics. 
• Enhancing state LTC ombudsman capacity. 

Policy Lever 1: Improving State Licensing and Oversight

States establish licensing requirements for LTC facilities to ensure coordinated, quality care for residents. In addition to general quality of care requirements, such as establishing the maximum number of residents in a room, states can include certain ownership and management disclosures as part of the licensing process.

• Arkansas required as a condition of licensure that nursing homes must notify the Office of Long Term Care whenever ownership or controlling interest in the operation of a facility is sold. 
• California prohibited applicants from acquiring or operating a skilled nursing facility without receiving state licensing approval, including in instances of changes in facility ownership or management.
• Iowa recently established a new application requirement for nursing facility licenses, including information on the operator’s financial suitability, regulatory history and ownership structure.
• Maryland updated requirements for reviewing notices of nursing home acquisitions as part of its licensing process—and directed the state to study expanding certificate of need approval for nursing home acquisitions.
• Texas required LTC facilities advertising that they provide “memory care” to disclose whether they are licensed and certified to provide special treatment for those with Alzheimer’s or related memory loss diseases.

Given transparency and quality of care concerns surrounding private equity ownership of nursing facilities, the Biden administration recently proposed rules requiring nursing homes to disclose additional ownership and management information to federal and state regulators. The rules establish definitions for private equity and real estate investment trusts, and require nursing facilities to report private equity and real estate investment trust ownership data to be eligible for Medicare and Medicaid reimbursement. They also set additional disclosure requirements for individuals or entities providing administrative or clinical consulting services.

Policy Lever 2: Addressing Direct Care Staffing Shortages

Many LTC facilities have fewer direct care staff than needed to meet resident needs. While federal regulators maintain certain minimum staffing standards based on working hours (which the Biden administration has indicated interest in updating), several states are establishing staffing requirements beyond federal standards. Given that minimum staffing levels do not address the dearth of direct care staff, states are also looking to recruit additional workers by increasing direct care staff wages and streamlining training requirements.

• Thirty-eight states and D.C. had minimum staffing standards that exceeded federal requirements as of March 2022. Virginia enacted legislation this year to establish minimum staffing standards, requiring nursing facilities to provide an average of 3.08 hours of daily nursing care to every resident.
• Since the pandemic, at least four states—Colorado, Illinois, Massachusetts and North Carolina—permanently increased direct care staff wages as of March 2022. For example, North Carolina required LTC facilities to use 80% of Medicaid rate increases to provide $15 minimum hourly wages for direct care staff.
• Since the pandemic, at least three states—Kentucky, Missouri and Wisconsin—permanently waived certain training requirements for direct care staff as of March 2022. Wisconsin, for instance, lowered the state’s minimum required training to 75 hours, matching federal standards.

Policy Lever 3: Bolstering Quality Reporting, Transparency and Metrics 

LTC facilities are subject to various federal and state quality reporting measures, such as the CMS Five-Star Quality Rating System for nursing facilities. States are looking both to improve reporting and transparency of LTC facility quality metrics and to mitigate administrative burdens for facilities reporting that information.

• Florida’s long-term care association recently launched a Long Term Care Quality Dashboard to provide transparent data about the quality of care delivered in the state’s nursing homes. 
• Illinois allocated $70 million in incentive payments for Medicaid-eligible nursing facilities if they meet certain quality metrics based on CMS’ Five-Star Quality Rating System.
• Maryland mandated a study regarding quality of care provided at assisted living facilities with nine or fewer residents. The study will consider the feasibility of making data on catastrophic health emergencies and quality of care publicly available.
• New Jersey enacted legislation in 2022 to streamline nursing home reporting requirements, impose escalating penalties for ongoing quality of care violations, and publish nursing home data on the department of health website.

Policy Lever 4: Enhancing State LTC Ombudsman Capacity 

LTC ombudsman programs operate in all 50 states, D.C., Puerto Rico and Guam as authorized under the federal Older Americans Act. These state programs resolve problems related to health, safety, welfare and patient rights for LTC facility residents. Several states are increasing the authority and reach of these programs to better respond to residents’ needs.

• Colorado required LTC facilities to provide written notice to residents and the LTC ombudsman prior to involuntarily discharging a resident.
• New York expanded annual reporting requirements for the LTC ombudsman, including examining recurring complaints to identify systemic issues in certain facilities. The state also required LTC facilities that are closing to submit written plans for closure and decertification to the ombudsman.
• Ohio required LTC facilities to develop compassionate care visitation policies during states of emergency in coordination with the LTC ombudsman. The authorizing legislation also requires facilities to educate compassionate caregivers about the right to contact LTC ombudsman with concerns over access to facilities and residents.