Jul 31, 2023 - Health

Nursing home pay bump finalized as staffing rule looms

Illustration of a home health aide pushing an empty wheelchair with quarters for wheels. 

Illustration: Shoshana Gordon/Axios

Nursing homes are assured of getting a 4% boost in Medicare reimbursements next year under a payment rule the Biden administration issued on Monday.

Why it matters: The approximately $1.4 billion pay increase takes into account the growing cost of delivering nursing home care next year.

  • It is slightly higher than what regulators proposed in April.
  • But the 2024 pay rate doesn't fully offset the increase in costs because regulators are phasing in a payment adjustment to account for past overpayments to facilities.

The intrigue: Nursing homes are still on edge as they wait for a separate proposal from the Biden administration on mandatory staffing standards for long-term care facilities.

  • "We all want more nurses in all health care settings, but our nation’s nursing shortage would make a new staffing mandate impossible to implement .... If your administration imposes this mandate, more nursing homes will close," American Health Care Association CEO Mark Parkinson wrote in a letter to President Biden in mid July.
  • Changing immigration policies to attract international nurses, improving caretaking technology and continuing efforts to increase access to home care are better solutions, Parkinson argued.
  • The White House Office of Management and Budget has been reviewing proposed staffing regulations since the end of May.

Catch up quick: The Centers for Medicare and Medicaid Services also finalized changes to nursing homes' quality reporting and quality incentive payment systems, including the addition of a health equity adjustment.

  • The new policy will provide financial rewards to nursing homes with high quality scores where at least 20% of the patient population is eligible for both Medicare and Medicaid.
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