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Potential Funding for the Nursing Home Minimum Staffing Requirements

On June 30, 2022, the Department of Health filed a Medicaid State Plan Amendment (SPA) requesting matching federal funds for facilities struggling to meet the new staffing requirements. The implementation of the minimum staffing law, effective April 1, 2022, requires nursing homes to have minimum staffing of at least 1.1 hours per resident day for Registered Nurse (RN)/Licensed Practical Nurse (LPN), 2.2 hours per resident day for Aides, and 3.5 hours of total nursing per resident day. In addition, this new mandate also requires providers to spend at least 40% of revenue on direct resident care staffing.

The SPA requests approval for annual payments of $187 million for three years beginning in 2022 to be made to qualifying facilities that need to add staff to meet the new minimum staffing limits. Facilities that are exempt from the 70/40 requirements, which include facilities whose certified beds are designated to serve medically fragile children or young adults, people with HIV/AIDS, or persons requiring Behavioral intervention or neuro degenerative services, do not qualify for funding.

A facility’s funding eligibility will be based on the additional cost they are expected to incur in order to meet the new minimum staffing hours requirement. The Q4 Payroll Based Journal (PBJ) data will be used to calculate the actual hours per resident day for the quarter. This will then be compared to the new minimum staffing requirement noted above. If a facility’s actual hours per day are lower, the annualized incremental need will be estimated using the Bureau of Labor Statistic (BLS) average hourly wage, increased by 40 percent for benefits.

Further, it has been proposed that if a facility does not spend 40 percent of their revenue on direct care staff, which will be calculated using the facility’s filed cost report, the incremental cost needed to meet the 40 percent requirement will be used to reduce the facility’s eligible funding.

The total $187 million in proposed funding is to be proportionally allocated to all qualifying facilities based on their calculated need. Please keep in mind that these proposed requirements are still going through the federal review process and have yet to be approved.

If you have any questions or need assistance in determining whether or not your facility meets the proposed requirements to receive funding, please do not hesitate to reach out to our trusted experts to discuss your specific situation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.