[Federal Register Volume 88, Number 171 (Wednesday, September 6, 2023)]
[Proposed Rules]
[Pages 61352-61429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18781]



[[Page 61351]]

Vol. 88

Wednesday,

No. 171

September 6, 2023

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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 42 CFR Parts 438, 442, et al.





Medicare and Medicaid Programs; Minimum Staffing Standards for Long-
Term Care Facilities and Medicaid Institutional Payment Transparency 
Reporting; Proposed Rule

  Federal Register / Vol. 88 , No. 171 / Wednesday, September 6, 2023 / 
Proposed Rules  

[[Page 61352]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 438, 442, and 483

[CMS-3442-P]
RIN 0938-AV25


Medicare and Medicaid Programs; Minimum Staffing Standards for 
Long-Term Care Facilities and Medicaid Institutional Payment 
Transparency Reporting

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish minimum staffing standards 
for long-term care facilities, as part of the Biden-Harris 
Administration's Nursing Home Reform initiative to ensure safe and 
quality care in long-term care facilities. In addition, this rule 
proposes to require States to report the percent of Medicaid payments 
for certain Medicaid-covered institutional services that are spent on 
compensation for direct care workers and support staff.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by November 6, 2023.

ADDRESSES: In commenting, please refer to file code CMS-3442-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3442-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3442-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: The Clinical Standard Group's Long 
Term Care Team at [email protected] for information 
related to the minimum staffing standards.
    Anne Blackfield, (410) 786-8518, for information related to 
Medicaid institutional payment transparency reporting.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.
    To assist readers in referencing sections contained in this 
document, we are providing the following Table of Contents.

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of Major Provisions
    C. Summary of Cost and Benefits
II. Minimum Staffing Standards for Nursing Homes in Response to the 
Presidential Initiative
    A. Background
    B. Provisions of the Proposed Regulations
III. Medicaid Institutional Payment Transparency Reporting Provision
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis

I. Executive Summary

A. Purpose

    This proposed rule would establish minimum staffing standards to 
address ongoing safety and quality concerns for the 1.4 million \1\ 
residents receiving care in Medicare and Medicaid certified Long-Term 
Care (LTC) facilities. On February 28, 2022, President Biden announced 
that CMS would propose minimum staffing standards that nursing homes 
must meet, based in part on evidence from a new research study that 
will focus on the level and type of staffing needed to ensure safe and 
quality care.\2\ In addition, on April 18, 2023, President Biden issued 
``Executive Order on Increasing Access to High-Quality Care and 
Supporting Caregivers'',\3\ which directs the Secretary of HHS to 
consider actions to encourage LTC facilities to reduce nursing staff 
turnover that is associated with improving safety and quality of 
care.4 5
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    \1\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-service-type-reports/cms-program-statistics-medicare-skilled-nursing-facility.
    \2\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
    \3\ Executive Order on Increasing Access to High Quality Care 
and Supporting Caregivers. White House. Accessed at https://www.whitehouse.gov/briefing-room/presidential-actions/2023/04/18/executive-order-on-increasing-access-to-high-quality-care-and-supporting-caregivers/. Published on April 18, 2023. Accessed on 
April 19, 2023.
    \4\ Zheng, Q, Williams, CS, Shulman, ET, White, AJ. Association 
between staff turnover and nursing home quality--evidence from 
payroll-based journal data. J Am Geriatr Soc. 2022; 70(9): 2508-
2516. doi:10.1111/jgs.17843.
    \5\ Castle, Nicholas G, and John Engberg. ``Staff turnover and 
quality of care in nursing homes.'' Medical care vol. 43,6 (2005): 
616-26. doi:10.1097/01.mlr.0000163661.67170.b9.
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    These safety and quality concerns stem, at least in part, from 
chronic understaffing in LTC facilities, and are particularly 
associated with insufficient numbers of registered nurses (RNs) and 
nurse aides (NAs), as evidenced from, inter alia, a review of data 
collected since 2016 and lessons learned during the COVID-19 Public 
Health Emergency (PHE). Numerous studies, including our new research 
study as well as existing literature, have shown that staffing levels 
are closely correlated with the quality of care that LTC facility 
residents receive, and with improved health outcomes. The minimum 
staffing standards would also provide staff in LTC facilities the 
support they need to safely care for residents, help prevent staff--
burnout, thereby reducing staff turnover, which can lead to improved 
safety and quality for residents and staff. This proposed rule would 
also promote public transparency related to the percent of Medicaid 
payments for certain institutional services that are spent on 
compensation to direct care workers and support staff.

B. Summary of Major Provisions

    We are proposing to update the Federal participation ``Requirements 
for Medicare and Medicaid Long Term Care Facilities'' minimum staffing 
standards (``LTC requirements''). The updates to

[[Page 61353]]

the LTC requirements proposed in this rule would be used to survey 
facilities for compliance and enforced as part of CMS's existing 
survey, certification, and enforcement process for LTC facilities. In 
addition, consistent with the President's strategic plan, we also 
intend to display our determinations of facility compliance with the 
minimum staffing standards on Care Compare. We welcome comments on the 
most appropriate approach for doing so.
    We are proposing to establish Federal minimum nurse staffing 
standards for a number of reasons, including the growing body of 
evidence demonstrating the importance of staffing to resident health 
and safety, continued insufficient staffing, non-compliance by a subset 
of facilities, the need to reduce variability in the minimum floor for 
nurse-to-resident ratios across States by creating a consistent floor, 
and, most importantly, to reduce the risk of residents receiving unsafe 
and low-quality care.
    The proposed regulatory updates are based on evidence we collected 
using a multifaceted approach, which included conducting a new nursing 
home staffing study, gathering feedback during listening sessions, 
considering more than 3,000 comments received from the Fiscal Year 2023 
Skilled Nursing Facility Prospective Payment System proposed rule 
(FY2023 SNF PPS) request for information (RFI), assessing Payroll-Based 
Journal (PBJ) System data on nursing home staffing, and reviewing the 
existing literature.
    Specifically, we propose to revise Sec.  483.35(b) to require an RN 
to be on site 24 hours per day and 7 days per week to provide skilled 
nursing care to all residents in accordance with resident care plans. 
We also propose individual minimum staffing type standards, based on 
case-mix adjusted data for RNs and NAs, to supplement the existing 
``Nursing Services'' requirements at 42 CFR 483.35(a)(1)(i) and (ii) to 
specify that facilities must provide, at a minimum, 0.55 RN hours per 
resident day (HPRD) and 2.45 NA HPRD. We note that while the 0.55 and 
2.45 HPRD standards were developed using case-mix adjusted data 
sources, the standards themselves will be implemented and enforced 
independent of a facility's case-mix. In other words, facilities must 
meet the 0.55 RN and 2.45 NA HPRD standards, at a minimum, regardless 
of the individual facility's patient case-mix. RN and NA staffing can 
never be lower than these proposed minimum standards, and if the acuity 
needs of residents in a facility require a higher level of care, a 
higher RN and NA staffing level will also be required. CMS is also 
seeking comments on whether in addition to the 0.55 RN and 2.45 NA HPRD 
standards, a minimum total nurse staffing standard, discussed later in 
the rule, should also be required. For compliance, hours per resident 
day (HPRD) is defined as staffing hours per resident per day which is 
the total number of hours worked by each type of staff divided by the 
total number of residents as calculated by the CMS. As further 
described below, the proposed minimum staffing standard is supported by 
literature evidence, analysis of staffing data and health outcomes, 
discussions with residents, staff, and industry \6\ and other factors.
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    \6\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    We note that each of the minimum staffing requirements 
independently supports resident health and safety. Therefore, 
compliance with the 24/7 RN requirement does not imply compliance with 
the minimum 0.55 RN HPRD and 2.45 NA HPRD requirements or vice versa. 
Specifically, as discussed elsewhere in this rule, the presence of an 
RN in a LTC facility on a 24-hour basis improves overall quality of 
care. Similarly, but separately, a minimum number of RN and NA hours 
per resident per day improve overall quality of care. Both 
independently and collaboratively, these requirements would support 
compliance with statutory mandates to provide services to attain or 
maintain the highest practicable physical, mental, and psychosocial 
well-being of each resident, in accordance with a written plan of care.
    As noted elsewhere, this proposal is informed by multiple sources 
of information, including the 2022 Nursing Home Staffing Study, more 
than 3,000 public comment submissions, academic and other literature, 
PBJ System data, and detailed listening sessions with residents and 
their families, workers, health care providers, and advocacy groups. We 
recognize that some of the materials we have relied upon offer support 
for a higher minimum HPRD standard. For several reasons discussed later 
in this proposed rule, including the importance of setting achievable 
staffing targets as the long-term care sector recovers from the effects 
of the COVID-19 pandemic and the desire to preserve resident access to 
care as the sector expands hiring to meet staffing standards, we are 
proposing a set of policies that balance the urgent need to improve 
resident safety and quality of care alongside these practical 
considerations. The policies include minimum HPRD standards for direct 
care by nursing staff, required access to an RN 24 hours per day 7 days 
per week, and enhanced facility staffing assessments.
    For example, the 2022 Nursing Home Staffing Study found that a 
total nurse staffing level of 3.67 or 3.88 HPRD was linked with 
additional facilities improving quality and safety relative to current 
low performers, and that total nurse staffing levels between 3.8 HPRD 
and 4.6 HPRD (including 1.4 licensed nurse HPRD) were linked with 
reductions in the amount of delayed or omitted clinical care. Our 
proposal squares these associations between higher HPRD nurse staffing 
levels and better care outcomes with the goal of establishing 
implementable minimum standards that can substantially improve quality 
and safety at all LTC facilities in the near-term. We also considered 
variation and contradiction between different information sources, 
including the 2022 Nursing Home Staffing Study, namely regarding the 
benefits of a staffing standard inclusive of or specific to LPN/LVNs. 
We further considered the benefits of a requirement for 24/7 on-site RN 
staffing and strengthened facility staffing assessments, which under 
this proposed rule apply independently of the HPRD requirements.
    The resulting, evidence-based proposal appropriately prioritizes 
quality and safety of care gains from establishing minimum standards 
for RNs and NAs, with a particular emphasis on the direct care 
delivered at the bedside by NAs, and effective implementation of these 
new requirements. As noted elsewhere, if finalized, these new required 
floors would increase staffing in more than 75 percent of nursing 
facilities nationwide, and the proposed NA and RN HPRD requirements 
exceed those of nearly all States. We remain committed to continued 
examination of staffing thresholds, including careful work to review 
quality and safety data resulting from initial implementation of 
finalized policies, and robust public engagement. Should subsequent 
data indicate that additional increases to staffing minimums would be 
warranted and feasible, we anticipate that we will revisit the minimum 
staffing standards to shift them toward the higher ranges supported by 
the evidence, such as those described above, with continued 
consideration of all relevant factors.
    We also propose to revise the existing Facility Assessment 
requirements at Sec.  483.70(e) by moving the provisions to a 
standalone section and modifying the

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requirements to ensure that facilities have an efficient process for 
consistently assessing and documenting the necessary resources and 
staff that the facility requires to provide ongoing care for its 
population that is based on the specific needs of its residents.
    We are proposing to stagger the implementation dates of these 
requirements sufficiently to allow facilities the time needed to 
prepare and be in compliance with the new requirements. Specifically, 
we propose that the RN on site, 24 hours per day, for 7 days a week 
would take effect 2 years after publication of the final rule; and we 
propose that the individual minimum standards of 0.55 HPRD for RNs and 
2.45 HPRD for NAs would take effect 3 years after publication of the 
final rule. Under the proposal facilities in rural areas would be 
required to meet the proposed RN on site 24 hours per day, for 7 days a 
week, 3 years after publication of the final rule; and the proposed 
minimum standards of 0.55 HPRD for RNs and 2.45 HPRD for NAs would take 
effect 5 years after publication of the final rule.
    Exemption from the proposed minimum standards of 0.55 HPRD for RNs 
and 2.45 HPRD for NAs would be available only in limited circumstances, 
where all four of the following criteria are met. The four exemption 
criteria are: (1) where workforce is unavailable, or the facility is at 
least 20 miles from another long-term care facility, as determined by 
CMS; (2) the facility is making a good faith effort to hire and retain 
staff; (3) the facility provides documentation of its financial 
commitment to staffing; and (4) the facility has not failed to submit 
PBJ data in accordance with re-designated 483.70(p), is not a Special 
Focus Facility (SFF); has not been cited for widespread insufficient 
staffing with resultant resident actual harm or a pattern of 
insufficient staffing with resultant resident actual harm, as 
determined by CMS; and has not been cited at the ``immediate jeopardy'' 
level of severity with respect to insufficient staffing within the 12 
months preceding the survey during which the facility's non-compliance 
is identified.
    If finalized, enforcement actions, also called remedies, would be 
taken against LTC facilities that are not in compliance with these 
Federal participation requirements. The remedies CMS may impose 
include, but are not be limited to, the termination of the provider 
agreement, denial of payment for all Medicare and/or Medicaid 
individuals by CMS, and/or civil money penalties.
    We are also proposing new regulations at 42 CFR 442.43 (with a 
cross-reference at 42 CFR 438.82) that would require that State 
Medicaid agencies report on the percent of payments for Medicaid-
covered services in nursing facilities and intermediate care facilities 
for individuals with intellectual disabilities (ICF/IIDs) that are 
spent on compensation for direct care workers and support staff. This 
proposal is designed to inform efforts to address the link between 
sufficient payments being received by the institutional direct care and 
support staff workforce and access to and, ultimately, the quality of 
services received by Medicaid beneficiaries. Taken together, we believe 
that these proposals will improve safety and quality of care for 
residents in Medicare and Medicaid certified LTC facilities and 
Medicaid certified ICF/IIDs.

C. Summary of Cost and Benefits

                       Table 1--Cost and Benefits
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         Provision description                Total transfers/costs
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Comprehensive Staffing Requirement for   Without accounting for any
 LTC Facilities.                          exemptions, we estimate that
                                          the overall economic impact
                                          for the proposed minimum
                                          staffing requirements for LTC
                                          facilities (that is,
                                          collection of information
                                          costs and compliance with the
                                          24/7 RN, facility assessment,
                                          and minimum 0.55 RN and 2.45
                                          NA HPRD requirements), which
                                          includes staggered
                                          implementation of the
                                          requirements, would result in
                                          an estimated cost of
                                          approximately for $32 million
                                          in year 1; $246 million in
                                          year 2; $4 billion in year 3;
                                          with costs increasing to $5.7
                                          billion by year 10. We
                                          estimate the total cost over
                                          10 years will be $40.6
                                          billion, which was derived
                                          from FY 2021 Part V of the
                                          Medicare Cost Report. LTC
                                          facilities would be expected
                                          to bear the burden of these
                                          costs, unless payors increase
                                          rates to cover cost.
                                          Quantified benefits include
                                          but are not limited to,
                                          increased community
                                          discharges, reduced
                                          hospitalizations, and
                                          emergency department visits,
                                          with a minimum estimated
                                          savings of gross costs of $318
                                          million per year for Medicare
                                          starting in year 3. Various
                                          categories of other important
                                          but hard to quantify benefits
                                          include reduced staff burnout
                                          and turnover, and increased
                                          safety and quality of care for
                                          LTC residents. Lack of
                                          quantification is also
                                          noteworthy as regards key
                                          categories of costs.
Medicaid Institutional Payment           The overall economic impact for
 Transparency Reporting.                  the proposed reporting
                                          requirement is a one time cost
                                          of $38 million and ongoing
                                          annual costs of $18 million
                                          per year.
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II. Minimum Staffing Standards for Long-Term Care Facilities

A. Background

1. Statutory Authority and Regulatory Requirements for Direct Care 
Nurse Staffing in Long-Term-Care (LTC) Facilities
    Sections 1819 and 1919 of the Social Security Act (the Act) set out 
regulatory requirements for Medicare and Medicaid long-term care 
facilities, respectively. Specific statutory language at sections 
1819(d)(4)(B) and 1919(d)(4)(B) of the Act permit the Secretary of the 
Department of Health and Human Services (the Secretary) to establish 
any additional requirements relating to the health, safety, and well-
being \7\ of residents in skilled nursing facilities (SNF) and nursing 
facilities (NF), as the Secretary finds necessary. This provision and 
other statutory authorities set out in section 1819 and

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1919 of the Act provide CMS with the authority to issue a regulation 
revising the existing requirements and to mandate a staffing minimum 
for nursing care. Under sections 1866 and 1902 of the Act, providers of 
services in Long Term Care (LTC) facilities seeking to participate in 
the Medicare or Medicaid program, or both, must enter into an agreement 
with the Secretary or the State Medicaid agency, respectively. LTC 
facilities seeking to be Medicare or Medicaid providers of services 
must be certified as meeting Federal participation requirements. These 
Federal participation requirements are the basis for survey activities 
in LTC facilities for ensuring residents' minimum health and safety 
requirements are met and maintained, to receive payment and remain in 
the Medicare or Medicaid program or both. LTC facilities include SNFs 
for Medicare and NFs for Medicaid. The Federal participation 
requirements for SNFs, NFs, or dually certified facilities, are 
codified in the implementing regulations at 42 CFR part 483, subpart B. 
In addition to those provisions, sections 1819(b)(1)(A) and 
1919(b)(1)(A) of the Act require that a SNF or NF must care for its 
residents in such a manner and in such an environment as will promote 
maintenance or enhancement of the safety and quality of life of each 
resident. Section 1819(b)(4)(C)(i) of the Act requires that a SNF must 
provide 24-hour licensed nursing services, sufficient to meet the 
nursing needs of its residents, and must use the services of a 
registered professional nurse at least 8 consecutive hours a day. These 
provisions are largely paralleled at section 1919(b)(4)(C)(i) of the 
Act for NFs. Sections 1819(f)(1) and 1919 (f)(1) of the Act require 
that the Secretary assure that requirements which govern the provision 
of care in skilled nursing facilities under this title, and the 
enforcement of such requirements, are adequate to protect the health, 
safety, welfare, and rights of residents and to promote the effective 
and efficient use of public moneys.
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    \7\ Section 1819(d)(4)(B) of the Act contains the word ``well-
being'', which does not appear in section 1919(d)(4)(B). We do not 
interpret the presence of this word as requiring separate regulatory 
treatment of Medicare and Medicaid long term care facilities.
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    In addition, sections 1819(b)(2) and 1919(b)(2) of the Act require 
that a SNF or NF provide services to attain or maintain the highest 
practicable physical, mental, and psychosocial well-being of each 
resident, in accordance with a written plan of care. The plan of care 
must describe the medical, nursing, and psychosocial needs of the 
resident and how the needs will be met. The plan of care is developed 
with the resident or resident's family or legal representative, and by 
a team which includes the resident's attending physician and an RN with 
responsibility for the resident. The plan of care should be 
periodically reviewed and revised by the team after required 
assessments. Sections 1819(b)(3) and 1919(b)(3) of the Act require that 
a SNF or NF conduct a comprehensive, accurate, standardized, 
reproducible assessment of each resident's functional capacity. 
Assessments are required to be conducted or coordinated by a registered 
nurse at specified frequencies.
    The participation requirements for LTC facilities (Federal 
requirements) are set forth at Sec. Sec.  483.1 through 483.95. In 
general, the health and safety standards for LTC facilities address 
facility administration, resident rights, care planning, quality 
assessment, performance improvement, services provided, emergency 
preparedness, as well as staffing requirements. Federal requirements 
state that LTC facilities must use the services of a registered nurse 
(RN) for at least 8 consecutive hours a day, 7 days a week (Sec.  
483.35(b)(1)), and must provide the services of ``sufficient numbers'' 
of licensed nurses and other nursing personnel, which includes but is 
not limited to nurse aides (NAs), 24 hours a day to provide nursing 
care to all residents in accordance with the resident care plans (Sec.  
483.35(a)(1)). The LTC facility must also designate an RN to serve as 
the director of nursing (DON) on a full-time basis (Sec.  
483.35(b)(2)).
    While these Federal requirements do specify a specific number of 
hours that these licensed nurses and other nursing personnel must be 
available, there is no requirement that those hours be specifically 
dedicated to direct resident care. With respect to staffing 
requirements specific to individual residents, such as RN staffing 
levels per resident, Federal regulations currently require that 
facilities provide staff sufficient to ``assure resident safety and 
attain or maintain the highest practicable physical, mental, and 
psychosocial well-being of each resident''. Facilities should determine 
whether this is met through ``resident assessments and individual plans 
of care and considering the number, acuity, and diagnoses or the 
facility's resident population'' (Sec. Sec.  483.35 and 483.70(e)).
2. The Need for a Minimum Nurse Staffing Requirement in LTC Facilities
    On October 4, 2016, we issued a final rule titled, ``Medicare and 
Medicaid Programs; Reform of Requirements for Long-Term Care 
Facilities'' (81 FR 68688). This final rule significantly revised the 
list of requirements that LTC facilities must meet to participate in 
the Medicare and Medicaid programs. Prior to the final rule, LTC 
facilities' requirements had not been comprehensively reviewed and 
updated since 1991 (56 FR 48826, September 26, 1991), despite 
substantial changes in service delivery in this setting. The final rule 
included revisions that reflect advances in the theory and practice of 
LTC service delivery and safety. The various revisions sought to 
achieve broad-based improvements in the quality of care provided in LTC 
facilities and in resident safety. As part of this 2016 final rule, we 
revised LTC facilities requirements to include competency requirements 
for determining the sufficiency of nursing staff, based on a facility 
assessment requirement that LTC facilities must conduct to determine 
what resources are needed to competently care for their residents 
during both day-to-day operations and emergencies. In the 2015 proposed 
rule, we included a robust discussion regarding the long-standing 
interest in increasing the required hours of nurse staffing per day and 
the various literature surrounding the issue of minimum nurse staffing 
standards in LTC facilities (see 80 FR 42199). In the 2016 final rule, 
we also included a discussion of the feedback received regarding our 
competency-based staffing approach (see 81 FR 68688). At the time, we 
highlighted the importance of establishing national staffing standards 
to promote safe, high- quality care for residents in LTC facilities and 
our desire to further explore potential options, however we noted that 
we needed additional evidence before pursuing potential requirements. 
We acknowledged that additional literature evidence along with data 
from sources such as Payroll Based Journal (PBJ) System would be 
helpful in determining if and what staffing levels should be 
established as minimum staffing standards to improve safety and the 
quality of care.\8\ Additionally, the availability of PBJ System data 
is essential to adequately enforcing oversight of minimum staffing 
standards. Since issuing the 2016 final rule and establishing a 
competency-based approach to staffing in the list of LTC requirements, 
we have collected several years of mandated PBJ System data and new 
evidence from the literature.
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    \8\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Staffing-Data-Submission-PBJ.

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[[Page 61356]]

    Additionally, as a part of the FY 2023 Skilled Nursing Facility 
Prospective Payment System Proposed Rule Request for Information (FY 
2023 SNF PPS RFI) discussed later in this proposed rule, commenters 
provided examples of ongoing quality and safety concerns within 
understaffed LTC facilities. These included, but are not limited to, 
residents going entire shifts without receiving toileting or days 
without bathing assistance, increases in falls, residents not receiving 
basic feeding or changing services, and even abuse in cases where no 
one was watching. The 2022 Nursing Home Staffing Study (also discussed 
later in this proposed rule) corroborated these comments and identified 
that basic care tasks, such as bathing, toileting, and mobility 
assistance, are often delayed when LTC facilities are understaffed. 
Interviews with various nurse staff highlighted ongoing concerns that 
care is often rushed, including for high-acuity residents, which can 
often lead to errors or safety issues.
    The COVID-19 Public Health Emergency (PHE) highlighted and 
exacerbated the long-standing concerns with inadequate staffing in LTC 
facilities. However, the COVID-19 PHE also yielded evidence that 
appropriate staffing made a difference as a part of the overall 
response to the COVID-19 PHE in LTC facilities. The Centers for Disease 
Control and Prevention (CDC) noted that nursing home residents were at 
high risk for infection, serious illness, and death from the COVID-19 
infection and Medicare beneficiaries were disproportionately impacted 
by the COVID-19 infection, with 76 percent of COVID-19 related deaths 
attributed to the people aged 65 years and older by the end of 2021.\9\ 
One study looking at 4,254 LTC facilities across eight States found 
that there were fewer COVID-19 cases in LTC facilities with four or 
five stars for nurse staffing in the Five Star Quality Rating System 
than in counterpart facilities with one to three stars for 
staffing.\10\ These findings suggest that LTC facilities with low nurse 
staffing levels may have been more susceptible to the spread of the 
COVID-19 infection. Findings from a recent 2020 study involving all 215 
nursing homes in Connecticut revealed that a 20-minute increase in RN 
time spent providing direct care to residents was associated with 22 
percent fewer confirmed cases of COVID-19 and 26 percent fewer COVID-19 
related deaths.\11\ These findings suggest that there is a positive 
relationship between the hours of direct care that RNs provide and 
infection transmission in LTC facilities.
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    \9\ March 2022 Report to the Congress: Medicare Payment Policy, 
MEDPAC.
    \10\ Figueroa JF, Wadhera RK, Papanicolas I, et al. Association 
of Nursing Home Ratings on Health Inspections, Quality of Care, and 
Nurse Staffing With COVID-19 Cases. JAMA. 2020;324(11):1103-1105. 
doi:10.1001/jama.2020.14709.
    \11\ https://agsjournals.onlinelibrary.wiley.com/doi/epdf/10.1111/jgs.16689.
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    Workforce challenges have contributed to understaffing and nurse 
burnout. The lack of adequate staffing impedes staff members' ability 
to devote adequate time and attention to each resident. One study 
looked at the impact of nurse burnout on organization and position 
turnover. Findings indicated that 54 percent of the nurses sampled 
suffered from moderate burnout and the impact of burnout on 
organizational turnover was significant.\12\ While workforce challenges 
have existed for years, and have many contributing factors, interested 
parties have reported that the COVID-19 PHE exacerbated the problem as 
many long-term care facilities experienced high worker turnover. 
Potential factors contributing to this turnover include higher rates of 
worker reported-stress; an inability of some workers to return to their 
positions held prior to the pandemic (for instance, due to difficulty 
accessing child care or concerns about contracting the COVID-19 
infection for people with higher risk of severe illness); high rates of 
mortality among long-term- care workers; and lower pay and job quality 
in long-term care settings relative to others, such as more competitive 
wage increases in retail and other industry jobs that tend to draw from 
the same pool of workers.13 14 15 Although the COVID-19 PHE 
has officially ended, the long-term care nursing workforce has been 
slower to recover than the nursing workforce in other healthcare 
settings, although it has steadily increased over the past year and a 
half.16 17 Demand for direct care workers is also expected 
to continue rising due to the growing needs of the aging 
population.18 19
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    \12\ Kelly LA, Gee PM, Butler RJ. Impact of nurse burnout on 
organizational and position turnover. Nurs Outlook. 2021 Jan-
Feb;69(1):96-102. doi: 10.1016/j.outlook.2020.06.008. Epub 2020 Oct 
4. PMID: 33023759; PMCID: PMC7532952.
    \13\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI. Accessed at http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \14\ Gasdaska, A., Segelman, M., Porter, K.A., Huber, B., Feng, 
Z., Barch, D., Squillace, M., Dey, J., & Oliveira, I. Nursing Home 
Staffing Disparities were Exacerbated during the COVID-19 Pandemic 
in 2020 (Research Brief). Washington, DC: Office of the Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. September 12, 2022. Accessed at https://aspe.hhs.gov/sites/default/files/documents/e37945b7d88efb005839a876660a59fb/nh-staffing-disparities-brief.pdf.
    \15\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing Facility 
Staffing Shortages During the COVID-19 Pandemic. Apr 04, 2022. 
Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \16\ Refer, for example, to a report from the Kaiser Family 
Foundation indicating that as of March 20, 2022, 28% of nursing 
facilities reported a staffing shortage, as reported in Ochieng, N., 
Chidambaram, P., Musumeci, M. Nursing Facility Staffing Shortages 
During the COVID-19 Pandemic. Apr 04, 2022. Kaiser Family 
Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic.
    \17\ https://data.bls.gov/timeseries/CES6562300001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true.
    \18\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \19\ Centers for Medicare & Medicaid Services. November 2020. 
Long-Term Services and Supports Rebalancing Toolkit. Accessed at 
https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
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    The studies discussed in this section, corroborated by public 
comment submissions, input provided through listening sessions, and the 
2022 Nursing Home Staffing Study, demonstrate the consequences of 
understaffing on resident health and safety. Yet, ongoing insufficient 
staffing as well as the widespread variability in existing minimum 
staffing standards across the United States (for example, 38 States and 
the District of Columbia have minimum nursing staffing standards; 
however, there are significant variations in their requirements) 
highlights the need for national minimum staffing standards for direct 
care in LTC facilities.
    Chronic understaffing continues in LTC facilities, and evidence 
demonstrates the benefits of increased nurse staffing in these 
facilities. For example, a report by the Office of the Inspector 
General (OIG) highlighted that in 2018, roughly 7 percent of nursing 
homes failed to provide 8 hours per day of RN staffing on at least 30 
total days during the year.\20\ Some studies have demonstrated that 
increased staffing levels were specifically beneficial to vulnerable 
subpopulations in nursing homes, such as residents with dementia or 
Alzheimer's disease. One cross sectional study of long-stay residents 
with Alzheimer's disease and related dementias found that residents in

[[Page 61357]]

nursing homes that had higher licensed nurse staffing levels had better 
end-of-life care and were less likely to experience potentially 
avoidable hospitalizations.\21\ Yet, the literature evidence suggests 
that staffing levels within facilities across the United States vary 
considerably, with less staffed facilities more likely to be for--
profit, larger, rural, and have a higher share of Medicaid residents.
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    \20\ Office of Inspector General (OIG), Some Nursing Homes' 
Reported Staffing Levels in 2018 Raise Concerns; Consumer 
Transparency Could Be Increased, OEI-04-18-00451, August 2020. 
https://oig.hhs.gov/oei/reports/oei-04-18-00450.asp.
    \21\ Jessica Orth, Yue Li, Adam Simning, Sheryl Zimmerman, 
Helena Temkin-Greener, End-of-Life Care among Nursing Home Residents 
with Dementia Varies by Nursing Home and Market Characteristics 
Journal of the American Medical Directors Association, Volume 22, 
Issue 2, 2021, Pages 320-328.e4, ISSN 1525-8610, https://doi.org/10.1016/j.jamda.2020.06.021.
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    Finally, multiple studies have shown that nursing home quality is 
generally lower in LTC facilities that serve high proportions of 
minority residents.22 23 24 Facilities that have a higher 
proportion of minority residents tend to have limited clinical and 
financial resources, low nurse staffing levels, and a high number of 
care deficiency citations.25 26 Furthermore, disparities in 
safety and quality care exist between LTC facilities with a high number 
of Medicaid residents and LTC facilities that have a high number of 
Medicare residents.\27\ These disparities can contribute to differences 
in quality across facilities' sites.\28\
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    \22\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3805666/.
    \23\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4108174/.
    \24\ https://onlinelibrary.wiley.com/doi/epdf/10.1111/1475-6773.12079.
    \25\ https://www.jamda.com/article/S1525-8610(21)00243-7/
fulltext.
    \26\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0094.
    \27\ Mor, Vincent et al. ``Driven to tiers: socioeconomic and 
racial disparities in the quality of nursing home care.'' The 
Milbank quarterly vol. 82,2 (2004): 227-56. doi:10.1111/j.0887-
378X.2004.00309.x.
    \28\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0094.
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    As such, we believe that national minimum staffing standards in LTC 
facilities and the adoption of a 24/7 RN and enhanced facility 
assessment requirements (as discussed later in this proposed rule), 
will help to advance equitable, safe, and quality care for all 
residents. Specifically, we propose individual minimum nurse staffing 
standards of 0.55 hours per resident day (HPRD) for RNs and 2.45 HPRD 
for NAs, that were developed using case-mix adjusted data sources. 
There were several considerations that helped us arrive at these 
proposed standards (discussed in detail later in this proposed rule). 
First, the evidence and findings from the 2022 Nursing Home Staffing 
Study demonstrated that there was a statistically significant 
difference in safety and quality care at 0.45 HPRD for RNs and higher 
including 0.55 HPRD; there was a statistically significant difference 
in safety and quality care at 2.45 HPRD and higher for NAs. Second, we 
evaluated existing State requirements and note that the proposed RN 
requirement of 0.55 HPRD is higher than every State and only lower than 
the District of Columbia (DC) based on September 2022 data. Third, we 
aimed to strike an appropriate balance between cost and benefit that 
would yield the strongest improvements in quality and safety for 
residents. We are not proposing minimum staffing standards based on 
HPRD for licensed nurses, that is, RNs plus LPN/LVNs, nor for total 
nurse staffing, that is, RNs, LPN/LVNs, and NAs because of evidence in 
the literature described below.
    This proposed policy is based on statistical evidence from clinical 
settings which suggests that more positive clinical outcomes are 
associated with increasing the number of RNs and NAs. We are not 
setting a minimum staffing standard for LPN/LVNs. In addition, as noted 
in the next section, it has been reported in the literature that LPN/
LVNs may find themselves practicing outside their scope of practice 
when there is not sufficient RN staffing in a facility to provide 
supervision. This is concerning because LPN/LVNs require an RN or a 
physician's supervision to practice. Furthermore, total licensed nurse 
staffing standards may ensure adequate levels of licensed nurse 
staffing and allow nursing homes the flexibility to substitute nurse 
type for example LPN/LVNs for RNs, or NAs for LPN/LVNs, but may result 
in compromising the safety and quality of care. Multiple studies have 
found no evidence of a consistent relationship of quality and safety 
with LPN staffing.\29\ First, literature evidence suggests that there 
is a negative correlation between LPN and RN staffing, indicating that 
nursing homes with higher LPN staffing levels tend to have lower RN 
staffing levels.\30\ Second, the 2022 Nursing Home Staffing Study did 
not demonstrate an association between LPN/LVNs' HPRD, at any level, 
and safe and quality care.\31\
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    \29\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
    \30\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
    \31\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    Many studies indicate that consistent, adequate nurse staffing is 
correlated with resident health and safety, but we seek additional 
information to make fully informed policy decisions. We welcome input 
from interested parties on the considerations and proposals discussed 
in this rule, and other comments that may be relevant. We encourage 
commenters to submit evidence and data to support any recommendations 
to the extent possible. We continue to seek additional information that 
supports our efforts for improving the safety and quality of care for 
residents within LTC facilities, including feedback on how to improve 
care transitions and discharge planning, such as information about and 
assistance with programs that assist with community placements.
    We are soliciting comments and recommendations in this area and 
have also included specific information requests that are embedded 
throughout this rule regarding certain proposals. We seek this 
information in anticipation that additional comments and 
recommendations will assist us in ensuring that we finalize appropriate 
minimum staffing standards to ensure the health and safety of residents 
and provide staff the support they need to care for residents while 
also considering the limited resources including the local supply of 
RNs and NAs, that may exist as the long-term care sector recovers from 
the COVID-19 PHE and an increased demand due to a growing older 
population.
3. CMS Actions and Key Considerations To Inform Mandatory Minimum 
Staffing Standards
    In February 2022, President Biden announced a comprehensive set of 
reforms aimed at improving the safety and quality of care within the 
nation's nursing homes. One key initiative within the Biden-Harris 
Administration's strategy is to establish a minimum nursing home 
staffing requirement for LTC facilities participating in Medicare and 
Medicaid.\32\ Establishing minimum staffing standards improves the 
likelihood that all nursing home residents are provided safe, high-
quality

[[Page 61358]]

care, and that workers have the support they need to provide high-
quality care.
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    \32\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
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    To help inform our efforts in establishing consistent and broadly 
applicable national minimum staffing standards, we launched a multi-
faceted approach aimed at determining the minimum level and type of 
staffing needed to enable safe and quality care in LTC facilities. This 
effort included issuing the FY2023 SNF PPS RFI,\33\ hosting listening 
sessions with various interested parties, and conducting a 2022 Nursing 
Home Staffing Study, which builds on existing evidence and several 
research studies using multiple data sources. In addition to launching 
our multi-faceted approach, we considered how any potential minimum 
staffing standards affect other CMS programs and/or initiatives as well 
as the enforceability of such standards. Our strategic approach and 
considerations are discussed later in this section.
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    \33\ Medicare Program; Prospective Payment System and 
Consolidated Billing for Skilled Nursing Facilities; Updates to the 
Quality Reporting Program and Value-Based Purchasing Program for 
Federal Fiscal Year 2023; Request for Information on Revising the 
Requirements for Long-Term Care Facilities To Establish Mandatory 
Minimum Staffing Levels. A Proposed Rule by the Centers for Medicare 
& Medicaid Services on 04/15/2022 https://www.federalregister.gov/documents/2022/04/15/2022-07906/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities.
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a. Request for Information in the FY 2023 Skilled Nursing Facility 
Prospective Payment System Proposed Rule (FY 2023 SNF PPS RFI)
    We published the FY 2023 SNF PPS RFI in April 2022, soliciting 
public comments on minimum staffing standards. In response to the FY 
2023 SNF PPS RFI, we received over 3,000 comments from a variety of 
parties interested in addressing LTC facilities' issues including 
advocacy groups, long-term care ombudsmen, industry associations 
(providers), labor unions and organizations, nursing home residents, 
staff and administrators, industry experts, researchers, family 
members, and caregivers of residents in LTC facilities.
    Notably, industry associations and resident advocates expressed 
divergent views on the establishment of minimum staffing standards. 
Resident advocacy groups and family members of residents were strongly 
supportive of establishing minimum staffing standards, while industry 
and provider groups expressed significant concern and opposition to 
such standards.
    Commenters supporting the establishment of minimum staffing 
standards voiced safety concerns regarding residents not receiving 
adequate care due to chronic understaffing in facilities. For example, 
residents going entire shifts without receiving toileting assistance, 
which can lead to an increase in falls or the development or worsening 
of pressure ulcers. Commenters noted that NAs barely have time to get 
each resident dressed, fed, and bathed; that residents lie for hours in 
wet and soiled diapers; that residents who need help to eat struggle to 
feed themselves; and that residents suffer abuse from staff and other 
residents because no one is watching. Commenters also shared stories of 
residents wearing the same outfit for a week without a change of 
clothing or a shower. Commenters highlighted the contribution of 
facility staff and attributed the lack of quality care to insufficient 
staffing levels.
    Commenters also offered recommendations for implementing minimum 
staffing standards including staffing with a RN on every shift. Some 
commenters suggested that CMS focus on implementing an acuity (that is, 
the medical complexity and needs of a resident) staffing model per 
shift as part of any minimum staffing standards. Others recommended 
that minimum staffing standards be established for residents with the 
lowest care needs, assessed using the Minimum Data Set (MDS) 3.0 
assessment forms, citing concerns that acuity-based minimum standards 
will be more susceptible to gaming around composition of the patient 
population (that is, avoiding taking on residents with more complex 
medical needs).
    Concerns raised by the local ombudsmen in the 2020 OIG Report on 
staffing levels echoed those raised by commenters. Some of the concerns 
identified in the OIG Report as a result of understaffing include 
residents' call lights going unanswered, medication errors, untreated 
wounds, and inadequate bathing, including residents going a week 
without a shower. The ombudsmen also focused on problems related to 
weekend staffing below required levels, resulting in resident falls and 
altercations between residents; the ombudsmen attributed such outcomes 
to facilities' inadequate leadership, as well as insufficient numbers 
of NAs.\34\ This information supports what was shared with us during 
the listening sessions as well as during the public comment period on 
the FY 2023 SNF PPS RFI.
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    \34\ Office of Inspector General Data Brief (August, 2020) Some 
Nursing Homes' Reported Staffing Levels in 2018 Raise Concerns; 
Consumer Transparency Could Be Increased. OEI-04-18-00450. https://oig.hhs.gov/oei/reports/OEI-04-18-00450.pdf.
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    Commenters also provided information on several resident and 
facility factors for consideration when assessing a facility's ability 
to meet any mandated staffing standards, including whether the facility 
has a high Medicaid census, high bed count, for-profit ownership, high 
SNF competition within the same county, high community poverty rates, 
low Medicare census, and for staffing, availability of RNs 
specifically. Other commenters stated that resident acuity should be a 
primary determinant in establishing minimum staffing standards, noting 
that CMS pays nursing homes based on resident acuity level.
    We also received comments on factors impacting facilities' ability 
to recruit and retain staff, with most commenters in support of 
creating avenues for competitive wages for nursing home staff to 
address issues of recruitment and retention. Other commenters, however, 
suggested that year-over-year reductions in skilled nursing facility 
payments complicate facilities' ability to increase staff wages and 
benefits.
    Finally, we received differing comments on the study design, 
payment, and cost impacts of establishing minimum staffing standards. 
Some commenters indicated that there is variability in Medicaid labor 
reimbursement amounts and many States' Medicaid rates do not keep up 
with rising labor costs. Others, however, noted that most facilities 
have adequate resources to increase their staffing levels without 
additional Medicaid resources, and cited a recent study that suggests 
that most major publicly traded nursing home companies were highly 
profitable, even during the COVID-19 PHE. Commenters provided robust 
feedback on the study design and method for implementing nurse staffing 
standards, while others noted that resident acuity could change on a 
daily basis and recommended that CMS establish benchmarks rather than 
absolute values in staffing standards. Other commenters recommended 
using both minimum nurse HPRD and nurse to resident ratios.
    Additionally, we note that several members of Congress have 
provided input regarding the establishment of minimum staffing 
standards. While some Members of Congress have expressed concern that 
requiring minimum staffing standards could create access issues for 
rural communities, other Members of Congress have expressed support for 
establishing minimum staffing

[[Page 61359]]

standards for LTC facilities.\35\ We appreciate the thoughtful feedback 
from commenters and have considered the varying feedback that we 
received to inform the staffing study design and proposal for minimum 
staffing standards discussed in this rule.
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    \35\ Sen Tester, Nursing Home Staffing Mandate, 2023; https://www.tester.senate.gov/wp-content/uploads/1-20-23-Nursing-Home-Staffing-Mandate-Letter-FINAL.pdf; Sen Casey, Wyden, et al, Nursing 
Home Staffing Mandate, 2023; https://www.aging.senate.gov/imo/media/doc/letter_to_cms_re_regulations_to_establish_minimum_staffing_levels_in_nursing_homes.pdf; Doggett, Schakowsky Lead Effort Pressing for 
Strong Nursing Home Staffing Standards [verbar] Congressman Lloyd 
Doggett (house.gov), https://doggett.house.gov/media/press-releases/doggett-schakowsky-lead-effort-pressing-strong-nursing-home-staffing-standards.
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b. The 2022 Nursing Home Staffing Study \36\
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    \36\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    The CMS commissioned a nursing home staffing study in 2001, 
entitled ``Appropriateness of Minimum Nurse Staffing Ratios in Nursing 
Homes'',\37\ commonly referred to as the 2001 CMS Staffing Study, that 
focused on two empirical analyses related to the link between staffing 
and quality: (1) whether there is a nurse staffing ratio above which no 
additional improvements in quality are observed, and (2) what nurse 
staffing thresholds are minimally necessary to provide care processes 
consistent with the Omnibus Budget Reconciliation Act (OBRA) of 1987 
optimal standards and related regulations.
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    \37\ Appropriateness of Minimum Nurse Staffing Ratios in Nursing 
Homes (2001) https://www.justice.gov/sites/default/files/elderjustice/legacy/2015/07/12/Appropriateness_of_Minimum_Nurse_Staffing_Ratios_in_Nursing_Homes.pdf
.
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    The study findings identified nursing home staffing thresholds 
beyond which additional staff did not lead to significant further 
improvements in care. These staffing levels, expressed in HPRD, varied 
by outcomes--short-stay or -long-stay- quality measures, by nurse staff 
type, and by level of nurse staffing. Depending on the nature of the 
nursing home population (case-mix), these thresholds ranged between: 
0.55 to 0.75 HPRD for RNs; 1.15 to 1.30 HPRD for licensed nurses (RNs 
and LPN/LVNs); and 2.4 to 2.8 HPRD for NAs. The 2001 study also 
reported that ``[m]inimum staffing levels at any level up to these 
thresholds are associated with incremental quality improvements, with 
the greatest benefits as these thresholds are approached.'' In other 
words, 4.1 HPRD was the highest HPRD of combined NAs and licensed staff 
(RNs/LPN/LVN) for long-stay measures beyond which no further 
improvement in safety and quality was observed. The 4.1 HPRD drawn from 
the 2001 Study is commonly misinterpreted as the minimum total nurse 
staffing that is needed to protect resident health and safety.
    The CMS also commissioned a simulation analysis (``time motion 
study'') on NA time expended for providing five key care processes,\38\ 
in addition to routine care, to determine an HPRD level for NAs to 
provide optimal nursing care. The study findings suggest that the NA 
HPRD level ranged between 2.8 (low workload facility) and 3.2 HPRD 
(high workload facility) for NAs only, depending on the NA workload 
requirements which was based on the nursing home resident population.
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    \38\ Five care processes were the following: (1) dressing/
grooming; (2) exercise; (3) feeding assistance; (4) changing and 
repositioning; and (5) providing toileting assistance.
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    Given the growing body of evidence demonstrating the importance of 
staffing to resident health and safety, the continued insufficient 
staffing, and variability in nurse-to-resident ratios across States, 
creating a consistent floor will reduce the risk of residents receiving 
unsafe and low-quality care. In 2022, given the age of the 2001 study 
and the persistent chronic nurse understaffing linked to poor safety 
and quality care, which was exacerbated by the COVID-19 PHE, we 
commissioned a new nursing home study that focused on a non-empirical 
analysis and four empirical analyses to develop minimum staffing 
standards using case-mix adjusted data sources, as well as staffing 
types and levels for improving safety and quality care in nursing 
homes.
    These non-empirical and empirical analyses, also known as study 
tasks, included a systematic literature review, qualitative analysis of 
data collected using interviews and surveys conducted during scheduled 
site visits, an observation study (``similar to the time motion 
study'') followed by simulation modeling analysis for licensed nurses 
(RNs and LPN/LVNs), quantitative analyses which included descriptive 
and impact analyses, and cost analyses. The key takeaways from the 
multifaceted approach are:
     Recent literature as well as testimonials from nursing 
home staff, residents, and family members underscore the relationship 
between staffing and care quality; however, there is no clear, 
consistent, and universal methodology for setting specific minimum 
staffing standards, as evidenced by the varying current standards 
across certain States.
     Nurse staffing levels vary considerably nationwide by LTC 
facilities' characteristics, such as location, size, and profit status 
and States. Thirty-eight States and the District of Columbia have 
minimum staffing standards, which vary considerably. We note that the 
proposed RN requirement of 0.55 HPRD is higher than every State, and 
only lower than the District of Columbia (DC) based on data from 
September 2022. Our proposed NA requirement of 2.45 HPRD is higher than 
all States and DC, based on data reported in September 
2022.36 39 To reiterate, LTC facilities would be required to 
meet both the proposed 0.55 HPRD for RNs and the 2.45 HPRD for NAs.
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    \36\ Payment and Access Commission (MACPAC). (2022a). Medicaid 
and CHIP Payment and Access Commission (MACPAC). (2022a). 
Compendium: State policies related to nursing facility staffing. 
https://www.macpac.gov/publication/statepolicies-related-tonursing-facility-staffing/.
    \39\ Consumer Voice (The National Consumer Voice for Quality 
Long-Term Care) (2021). State nursing home staffing standards: 
Summary report https://theconsumervoice.org/issues/otherissues-andresources/staffing.
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     The relationship between staffing and quality of care and 
safety, varies by staff type and level as follows:
    ++ RN hours per resident day of 0.45 or more have a strong 
association with safety and quality care.
    ++ NA hours per resident day of 2.45 or more also have a strong 
association with safety and quality care.
    ++ LPN/LVN hours per resident day, at any level, do not have any 
association with safety and quality of care.40 41 42
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    \40\ Akinci, Fevzi, and Diane Krolikowski. ``Nurse staffing 
levels and quality of care in Northeastern Pennsylvania nursing 
homes.'' Applied nursing research: ANR vol. 18,3 (2005): 130-7. 
doi:10.1016/j.apnr.2004.08.004.
    \41\ Yang, Bo Kyum et al. ``Nurse Staffing and Skill Mix 
Patterns in Relation to Resident Care Outcomes in US Nursing 
Homes.'' Journal of the American Medical Directors Association vol. 
22,5 (2021): 1081-1087.e1. doi:10.1016/j.jamda.2020.09.009.
    \42\ Spilsbury, Karen et al. ``The relationship between Nurse 
staffing and quality of care in nursing homes: a systematic 
review.'' International journal of nursing studies vol. 48,6 (2011): 
732-50. doi:10.1016/j.ijnurstu.2011.02.014.
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     Increasing nursing staffing level is associated with 
costs, namely financial costs to LTC facilities, as well as benefits, 
including enhanced safety and quality to varying degrees.
    In brief, the 2022 Nursing Home Staffing Study was conducted as a 
general framework to survey different sources of information and to 
conduct different types of analyses to help inform the minimum staffing 
decision process, while considering the potential

[[Page 61360]]

cost and benefit. The study \43\ was unable to examine the relationship 
between staffing levels by shift and quality/patient safety because the 
PBJ System does not include information on staffing by shift. In 
addition, there was limited information on non-nurse staffing, so the 
study team was unable to examine minimum staffing standards for non-
nurse staff.
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    \43\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    Unlike the 2001 CMS Staffing Study, the 2022 Nursing Home Staffing 
Study was guided by a conceptual model (see Figure 1), that 
hypothesizes that administrative practices (for example, nurse staffing 
levels, staffing mix, care delivery model, and organizational 
environment) influence the quality and safety of care provided in a 
nursing home, which, in turn, influences nursing home residents' 
outcomes (that is, clinical, safety, and disparity). Clinical outcomes 
were defined using Care Compare quality measures derived from the MDS 
and Medicare claims data. Patient safety was defined using measures 
from health inspection surveys.
[GRAPHIC] [TIFF OMITTED] TP06SE23.000

(1) Systematic Literature Review
    The overall goal of the systematic literature review was to 
summarize timely and current evidence of the relationship between 
minimum staffing standards in nursing homes and the safety and quality 
of care, as well as clarify the relative strengths and weaknesses of 
the available literature. In addition, the systematic literature review 
of existing peer-reviewed and ``gray literature'' (that is, published 
outside the traditional research publications such as opinion pieces, 
advocacy materials, and non-statistically rigorous research published 
by government agencies) which includes printed articles, for the 
initial period 2019-2022, and prior to 2019 if needed, focused on 
addressing the following questions:
     What is the relationship between nurse staffing levels and 
safety and quality of care? What minimum staffing levels associated 
with safety and quality of care have been identified in previous 
studies, and what is the empirical basis for them?
     What are the current State and Federal standards for 
staffing level/types and outcomes in nursing homes for weekdays, 
weekends, and evenings?
     What is the role of different nurse types (that is, RNs/
LPN/LVNs/NAs) in ensuring safety and quality of nursing home care?
     What are the costs associated with nurse staffing in 
nursing homes? What are the costs associated with implementing minimum 
nurse staffing standards and increasing nurse staffing levels/types?
    Most importantly, an increase in nurse staffing was associated with 
improved quality of care. In a 2021 study, where interview data were 
examined, and multivariate analyses of resident outcomes were 
conducted, authors concluded that higher total nurse staffing had a 
significant correlation with a decreased number of pressure ulcers, an 
increase in influenza vaccination, an increase in pneumonia 
vaccination, and decreased number of

[[Page 61361]]

outpatient emergency department visits.\44\
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    \44\ Wagner, L.M., Katz, P., Karuza, J., Kwong, C., Sharp, L., & 
Spetz, J. (2021). Medical staffing organization and quality of care 
outcomes in post- acute care settings. Gerontologist, 61(4),605-614.
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    However, the OBRA of 1987,\45\ which amended sections 1819 and 1919 
of the Act to mandate staffing standards in nursing homes, did not 
mandate specific numerical minimum nurse staffing standards. As such 
several States mandated variable staffing standards to help meet the 
standards in sections 1819 and 1919 of the Act.
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    \45\ chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/ 
https://static1.squarespace.com/static/602ac1a3ede5cc16ae72d619/t/6043c094b391303a2d1c1418/1615052948879/OBRA87summary.pdf.
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    As stated in the 2022 Nursing Home Staffing Study report,\46\ which 
will be published concurrently with this proposed rule, studies found 
that States that established higher nurse staffing standards resulted 
in increased staffing within nursing homes, but the magnitude of this 
increase varied by the staff type. For example, authors found that when 
the States of California and Ohio required increased licensed nurse or 
total nurse staffing standards, this resulted in some actual increase 
in staffing levels. California required facilities to increase the 
hours for direct resident care per day from 3.0 to 3.2 and prohibited 
the previous practice of allowing RN or LPN hours to be counted twice, 
also known as ``doubling''. The rationale for doubling was to increase 
the number of licensed staff. Ohio law required facilities to increase 
total nurse staffing (RN, LPN/LVN, and NA) direct care hours from 1.6 
to 2.75. Results showed that for both California and Ohio, nursing 
homes that ranked in the bottom quartile at baseline on total nurse 
staffing significantly increased their HPRDs for all three types of 
nursing staff (RN, LPN/LVN, and NA). However, there was a reduction in 
professional skill mix, meaning there were fewer RNs relative to other 
direct care staff, 71 percent of the increase in nursing staff 
represented an increase in NA hours.\47\
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    \46\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
    \47\ Chen, Min M, and David C Grabowski. ``Intended and 
unintended consequences of minimum staffing standards for nursing 
homes.'' Health economics vol. 24,7 (2015): 822-39. doi:10.1002/
hec.3063.
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    Another study, when controlling for changes in State minimum direct 
care staffing standards during the study period, in Arkansas, Delaware, 
Florida, and Ohio, found that nursing homes serving a higher share of 
Medicaid patients reported large increases in staffing, specifically 
RNs, in response to a one HPRD increase in total nurse staffing from a 
baseline of 2.0 HPRD requirement for total nurse staffing.\48\ In sum, 
studies found that nursing homes in States with higher minimum staffing 
standards employed more staff.
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    \48\ Bowblis, John R. ``Staffing ratios and quality: an analysis 
of minimum direct care staffing requirements for nursing homes.'' 
Health services research vol. 46,5 (2011): 1495-516. doi:10.1111/
j.1475-6773.2011.01274.x.
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    Most LTC facilities typically have nurse teams providing care to 
residents with very few RNs (8 percent) making up the team, compared to 
other nurse team members, (that is, administrative RNs, LPN/LVNs and 
unlicensed assisting staff)49 50 which suggests that LPN/
LVNs provide most of the clinical care with minimal supervision from 
RNs.\51\ Other study findings suggest that some Directors of nursing 
(DONs) view the roles of RNs and LPN/LVNs interchangeably despite the 
difference in educational preparation and scope of practice. Yet, study 
findings suggest that having more RNs in LTC facilities to provide 
clinical skills and supervision of LPNs positively influences LPNs 
contributions to improved quality care.\52\ In summary, the presence of 
more RNs on a team influences the quality of care provided.
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    \49\ American Health Care Association (2012) LTC stats: Nursing 
facility operational characteristics report. Retrieved from http://www.ahcancal.org/research_data/oscar_data/Nursing%20Faciliry%20Operational%Characteristics/LTC+STATS_PVNFOPERATIONS_2012Q4_FINAL.pdf.
    \50\ Siegel, Elena O et al. ``Leadership in Nursing Homes: 
Directors of Nursing Aligning Practice With Regulations.'' Journal 
of gerontological nursing vol. 44,6 (2018): 10-14. doi:10.3928/
00989134-20180322-03.
    \51\ Corazzini, Kirsten N et al. ``Licensed practical nurse 
scope of practice and quality of nursing home care.'' Nursing 
research vol. 62,5 (2013): 315-24. doi:10.1097/NNR.0b013e31829eba00.
    \52\ Corazzini, Kirsten N et al. ``Licensed practical nurse 
scope of practice and quality of nursing home care.'' Nursing 
research vol. 62,5 (2013): 315-24. doi:10.1097/NNR.0b013e31829eba00.
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    Based on gray literature, a coalition of resident nursing home 
advocates and the National Academies of Sciences, Engineering, and 
Medicine recommended RN coverage, with at least one RN, for 24 hours a 
day, 7 days a week, with additional RN coverage if needed, as part of 
the minimum staffing standards.53 54
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    \53\ California Advocates for Nursing Home Reform, Center for 
Medicare Advocacy, Justice in Aging, Long Term Care Community 
Coalition, Michigan Elder Justice Initiative, and The National 
Consumer Voice for Quality Long-Term Care. (2021). Framework. for 
nursing home reform post COVID-19. https://theconsumervoice.org/uploads/files/actionsand-newsupdates/Framework_and_overview_FINAL.pdf.
    \54\ National Academies of Sciences, Engineering, and 
Medicine.(2022).The national imperative to improve nursing home 
quality: Honoring our commitment to residents, families, and staff. 
The National Academies Press. https://doi.org/10.17226/26526.
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    Several costs for increasing nurse staffing were cited in the 
literature, we note that these costs differ from our estimated costs as 
set out in this proposed rule. For example, in one study, by trade 
groups representing the industry, 4.1 HPRD for total nurse staffing 
(that is, RNs, LPN/LVNs and NAs) was found to cost the long-term care 
industry more than $10 billion annually.\55\ Another study estimated 
that the additional staffing costs to meet the 4.1 HPRD for total nurse 
staffing as $7.25 billion.\56\ In summary, several studies found that 
higher levels of nurse staffing, including RNs, were associated with 
improved resident care outcomes and increased costs.
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    \55\ CLA (CliftonLarsonAllen, LLC). (2022). Staffing mandate 
analysis. In-depth analysis on minimum nurse staffing levels and 
local impact. American Health Care Association and the National 
Center for Assisted Living (AHCA/NCAL). https://www.ahcancal.org/News-and-Communications/Fact-Sheets/FactSheets/CLA-Staffing-Mandate-Analysis.pdf.
    \56\ Hawk, T., White, E.M., Bishnoi, C., Schwartz, L.B., Baier, 
R.R., & Gifford, D. R. (2022). Facility characteristics and costs 
associated with meeting proposed minimum staffing levels in skilled 
nursing facilities. Journal of the American Geriatrics Society, 
70(4), 1198-1207. https://doi.org/10.1111/jgs.17678.
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(2) Qualitative Analysis
    Thirty-one nursing homes were selected for scheduled site visits in 
14 States, specifically California, Colorado, Florida, Illinois, 
Massachusetts, Maryland, Missouri, North Carolina, New York, Ohio, 
Pennsylvania, Virginia, Washington, and Wyoming. These site visits 
started in September 2022, and ended in December 2022. nursing homes 
were selected to ensure a national representation by size, ownership 
type, geographic location, Medicaid population, and overall rating 
under the Five-Star Quality Rating System. Nursing homes voluntarily 
participated in these site visits and no incentives were offered. Site 
visit protocols and interview guides were reviewed and approved by Abt 
Associates Inc. Institutional Review Board.\57\ Site visits were 
conducted under the Nursing Home Reform Law in the Omnibus Budget 
Reconciliation Act of 1987 (OBRA '87) (Pub. L. 100-203), which is 
exempt from the Paperwork Reduction Act (PRA).
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    \57\ https://abtimpact.com/mission-impact-2020/ethics-and-governance/.
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    During site visits, interviews (n=361) were conducted with 76 
nursing home leadership, 195 direct care staff

[[Page 61362]]

(including RNs, LPN/LVNs, and NAs), 65 residents, and 25 family members 
to better understand the relationship between staffing levels, staffing 
mix (what types of staff are present), and resident outcomes and 
experiences (that is, clinical outcomes, safety, health disparities). 
Staff completed 168 Missed Nursing Care (MISSCARE) \58\ surveys to 
determine any omitted or delayed care.
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    \58\ Kalish, B.J., & Williams, R.A. (2009). Development and 
psychometric testing of a tool to measure missed nursing care. The 
Journal of Nursing Administration, 39(5), 211-219. https://doi.org/10.1097/nna.0b013e3181a23cf5.
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    Findings from data analyses of surveys and interviews highlighted 
that activities of daily living care tasks, including bathing, 
toileting, and mobility assistance, are the most frequently delayed 
tasks when shifts/units are short staffed. Family members also reported 
that quality of life, quality of care, and resident safety are 
adversely affected when nursing homes are short staffed. Some staff 
stated that rushing through care due to having high-acuity residents, 
meaning that their condition is severe and imminently dangerous, or a 
high number of assigned residents led to medication errors and safety 
issues. For example, one nurse stated that being assigned 33 patients 
without any other staff is not safe. Respondents also noted that 
different staffing requirements for NAs and licensed nurses, among 
other factors, should be considered when developing minimum staffing 
standards. Nursing home staff respondents also suggested minimum staff-
to-resident ratios. NA respondents proposed a ratio of 5 to 14 
residents per NA, whereas RNs and LPN/LVNs suggested ratios from 8 to 
25 residents per licensed nurse (RN and LPN/LVNs). Respondents worked 
across a variety of shifts, units, and resident types (for example, 
skilled nursing/rehabilitation, long-term care, total care, dementia 
care, and behavioral issues), so the acuity of residents they typically 
supported varied as did the ratios they proposed.
(3) Observation Study/Simulation Modeling
    Twenty LTC facilities were selected based on a convenience sampling 
method for the observation study. Time data of 8,249 unique care tasks 
were collected via direct observations of licensed nursing staff (that 
is, RN and LPN/LVNs) providing common clinical tasks including 
medication pass, resident assessment, wound care, and catheter/device 
care. Previous simulation modeling research focused on NAs providing 
non-clinical tasks specifically, activities of daily living (ADL) 
tasks,\59\ but not on clinical tasks. Thus, this simulation study was 
aimed at addressing this gap in knowledge and focused exclusively on 
specific clinical tasks provided by licensed nurses.
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    \59\ Schnelle, J.F., Schroyer, L.D., Saraf, A.A., & Simmons, 
S.F. (2016). Determining nurse aide staffing requirements to provide 
care based on resident workload: A discrete event simulation model. 
Journal of the American Medical Directors Association, 17(11), 970-
977. https://doi.org/10.1016/j.jamda.2016.08.006.
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    These data were used to develop a simulation model to examine the 
impact of different levels of licensed nurses and resident acuity, on 
the quality and timeliness of providing certain care tasks defined as 
delayed and omitted care respectively. This simulation model is 
important to add to existing literature on delayed care and help the 
staffing study reflect not just what staffing levels exist currently as 
a descriptive model, but also what staffing levels are needed for safe, 
quality care for residents at varying acuity levels for the studied 
clinical tasks.
    As stated in the 2022 Nursing Home Staffing Study report,\60\ which 
will be published concurrently with this proposed rule, simulation 
findings suggest that a staffing level of four licensed nurses (that 
is, a combination of RNs and LPN/LVNs) in this setting, would reduce 
the amount of delayed or omitted care for the clinical tasks studied to 
a rate below 5 percent in a 70-resident nursing home. Five licensed 
nurses would virtually eliminate delayed or omitted care in this 
setting. The 4 to 5 licensed nurses correspond to approximately 1.4 to 
1.7 HPRD at such a nursing home. However, the study has several 
limitations. One is that these study observations did not differentiate 
between RN and LPN/LVN tasks, so we are unable to separate estimates of 
potential delayed or omitted care for an RN versus an LPN. Most 
importantly, simulation studies did not incorporate any patient-level 
data or facility-level data from site observations. Instead, 
simulations estimated patient acuity using MDS data. Therefore, patient 
acuity in simulations were based on population-level estimates, rather 
than estimates at the nursing-home level or the individual patient 
level.
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    \60\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    Because the simulation did not use actual patient- or facility-
level data, facilities specializing in treatment of high or low acuity 
residents were not properly represented in the staffing simulation 
models. For example, different staffing needs may arise in facilities 
specializing in care for persons experiencing disabilities resulting in 
paraplegia/quadriplegia, or in facilities specializing in persons 
experiencing advanced cognitive impairment. Analysis of specialized 
care facilities was outside of the scope of this simulation research. 
Furthermore, other existing simulation research focused on NAs only, so 
NAs were considered as part of the evidence base for this work but were 
not included in the analysis.
(4) Quantitative Analysis
    Secondary Analysis: The quantitative analysis used secondary data 
of nursing homes (n = 14,529) from the CMS' PBJ System, the MDS 3.0, 
Medicare cost reports, and health inspection surveys to establish 
minimum staffing standards for different types of nurse staff (that is, 
total nurse staffing and individual RNs, LVN/LPNs, and NAs) and for 
non-nurse staff (that is, social workers, feeding assistant, other 
activities staff, and physical therapy assistant among others) that is 
associated with an acceptable quality of care and safety in nursing 
homes. Quality was defined based on a total composite quality measure 
made up of Short-Stay Measures (that is, community discharge, hospital 
readmissions, emergency department visits, Functional improvement) and 
Long-Stay Measures (that is, activities of daily living decline, 
antipsychotic medication use, mobility decline, high-risk pressure 
ulcer, hospitalizations, and emergency department visits).\61\
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    \61\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    Safety was measured based on the relative on-site health inspection 
performance of nursing homes within a State using surveys for the 
following deficiencies: Immediate jeopardy to resident health or 
safety; Actual harm that is not immediate jeopardy; No actual harm with 
potential for more than minimal harm that is not immediate jeopardy; 
and, No actual harm with potential for minimal harm.
    Similar to other CMS nursing home improvement quality initiatives 
such as Value Based Payment for nursing homes, acceptable quality and 
safety was defined using the 25th and 50th percentile cut-offs on the 
current distribution of the total quality measure (QM) score and 
within-State performance on health inspection survey data, based on the 
predicted probability of nursing homes exceeding the threshold across 
the full distribution of nurse staffing levels. Moreover, some

[[Page 61363]]

nursing homes are staffed at levels that place their residents at 
substantially higher risk of poor quality (for example, being in the 
lowest quartile of QM score, defined as the 25th percentile cut off) 
and low safety (for example, lowest quartile of performance on health 
inspection survey, defined as the 25th percentile cut off). The PBJ 
System data for the fourth quarter of 2019 through the first quarter of 
2022, for 14,688 Medicare and/or Medicaid certified nursing homes in 
the United States were included in the analyses.
    Descriptive analyses examined HPRD for nurse and non-nurse staff in 
nursing homes (n=14,529) across all States. Regression modeling 
analyses controlled for case-mix adjusted data for nurse staffing (that 
is, RN, LPN/LVN, and NA), LTC facility ownership (for example, non-
profit, Government), percent of Medicaid residents, hospital-based 
facility, Continuing Care Retirement Community (CCRC) facility, rural 
location, number of certified beds (per 1-bed increase), and Special 
Focus Facility status. Using a correlational descriptive analysis, 
findings indicate that there is a consistent positive relationship 
between higher RN staffing and better performance, regardless of the 
measure (that is, total quality measure score or within-State health 
inspection score), the performance standard (that is, acceptable 
quality and safety at the 25th, or 50th percentile), or the case-mix 
adjusted RN staffing decile measured in HPRD.
    Among all nurse staffing types, RNs exhibit the strongest 
association with acceptable quality (p<.0001, significant at [alpha] = 
0.05) and safety (pHowever, similar to previous 
analyses,62 63 64 this study found no relationship between 
LPN/LVNs HPRD levels and quality care and safety. This finding may be 
influenced by the LPN/LVN's role \65\ and the fact that nursing homes 
with higher LPN/LVN staffing levels tend to have lower RN staffing 
levels.\66\ The volume and number of HPRD reported in PBJ System for 
non-nurse staff were very low, ranging from 0.00-0.11; as such were 
insufficient to examine further for establishing minimum non-nurse 
staffing standards.
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    \62\ Akinci, Fevzi, and Diane Krolikowski. ``Nurse staffing 
levels and quality of care in Northeastern Pennsylvania nursing 
homes.'' Applied nursing research: ANR vol. 18,3 (2005): 130-7. 
doi:10.1016/j.apnr.2004.08.004.
    \63\ Yang, Bo Kyum et al. ``Nurse Staffing and Skill Mix 
Patterns in Relation to Resident Care Outcomes in US Nursing 
Homes.'' Journal of the American Medical Directors Association vol. 
22,5 (2021): 1081-1087.e1. doi:10.1016/j.jamda.2020.09.009.
    \64\ Spilsbury, Karen et al. ``The relationship between Nurse 
staffing and quality of care in nursing homes: a systematic 
review.'' International journal of nursing studies vol. 48,6 (2011): 
732-50. doi:10.1016/j.ijnurstu.2011.02.014.
    \65\ Firnhaber, G.C., Roberson, D.W., & Kolasa, K.M. (2020). 
Nursing staff participation in end-of-life nutrition and hydration 
decision-making in a nursing home: A qualitative study. Journal of 
Advanced Nursing, 76(11), 305-3068.https://doi.org/10.1111/jan.14491.
    \66\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    We considered findings from the 2022 Nursing Home Staffing Study, 
specifically that there was no statistically significant difference in 
safety and quality care below 2.45 HPRDs for NAs. In other words, 
staffing below 2.45 HPRD for NAs did not improve safety and quality 
care for LTC facility residents. Also, our proposed NA requirement of 
2.45 HPRD which was developed using case-mix adjusted data sources, is 
higher than the minimum requirements in all States and DC, based on 
data reported in September 2022.
    We also considered findings from the 2022 Nursing Home Staffing 
Study that there was no correlation between safety and quality care, 
and LVN/LPNs. We examined findings from the 2022 Nursing Home Staffing 
Study, that there was a statistically significant difference in safety 
and quality care at 0.45 HPRD for RNs and higher. We also factored the 
minimum RN requirements in all States and the District of Columbia, 
which with the exception of two States, all had less than the 0.45 HPRD 
for RNs, which was the lowest level presented in the 2022 Nursing Home 
Staffing Study. However, current State minimum RN staffing levels are 
associated with increased risk for unsafe and poor quality care. 
Therefore, we are proposing the level of 0.55 HPRD for RNs, which was 
developed based on case-mix adjusted data sources and the 2022 Nursing 
Home Staffing Study findings. In addition, 0.55 HPRD for RNs will 
result in a large majority (78 percent) of LTC facilities increasing 
staffing to provide safe and quality care. CMS is also seeking comments 
on whether in addition to the 0.55 RN and 2.45 NA HPRD standards, a 
minimum total nurse staffing standard, such as 3.48 among other 
alternatives, discussed later in the rule, should also be required.
    Furthermore, we considered striking a balance between cost and 
benefit for LTC facilities, nursing staff, and residents, and the 
minimum number of HPRDs by staff type that will improve safety and 
quality care. Therefore, we proposed 0.55 and 2.45 HPRD for RNs and 
NAs, respectively, which were developed using case-mix adjusted data 
sources, because we believe that proposing lower staffing levels than 
current State requirements would be insufficient to meet the statutory 
goals of improving health and safety.
    Impact Analysis: The impact of State minimum staffing policies on 
nurse staffing, and safety and quality care in nursing homes during the 
recent COVID-19 PHE, can inform policy makers on potential outcomes to 
Federal minimum staffing standards. The study also provided analyses of 
the recently revised Massachusetts minimum staffing standards, in the 
wake of the COVID-19 PHE, making the findings the most timely and 
relevant of various State-level analyses. The researchers determined 
that the analysis of the Massachusetts staffing standard would be 
particularly informative given that the State increased its HPRD to a 
relatively high level and incorporated a Medicaid payment reduction of 
2 percent for noncompliant facilities. As such a quasi-experimental 
study was conducted to determine the impact of the Massachusetts 
minimum staffing standards on quality of care and safety in nursing 
homes.
    The Massachusetts nursing home minimum staffing standards requires 
3.58 HPRD for total nurse staffing (that is, RN, LPN, and NA), of which 
0.508 HPRD was for an RN, and provided for a financial penalty for 
noncompliance with the total nurse staffing standard. The study period 
was defined as 2015 Q3 through 2022 Q2. The Massachusetts nursing home 
minimum staffing policy was effective January 1, 2021. Impact analysis 
of existing nursing homes (n=40) data from the PBJ System data (2015Q3-
2022Q2) and Care Compare (quality measure and health inspection survey 
data) were used. The comparison group selected from the sample of 
national nursing homes (n=1,617) was constructed using a synthetic 
control approach. Synthetic control is a statistical method for 
creating a comparison group of nursing homes from a region that did not 
experience the same health policy intervention, but closely resembles 
the nursing home staffing level and trend in Massachusetts using 
weighted estimates. Difference-in-differences regression analyses were 
conducted by stratified nursing home Medicaid share and staffing level. 
Difference-in-differences regression is a statistical method for 
estimating the causal effect of the Massachusetts minimum staffing 
standards, when compared to a region that did not experience the same 
policy intervention.

[[Page 61364]]

    These regression models did not find a discernible impact on 
quality of care nor safety within the time period studied. They did, 
however, find an increase in total nurse staffing levels among low-
staffed nursing homes with a high share of residents with Medicaid in 
Massachusetts. The observed staffing increase was significant for NAs 
(average treatment effect on the treated (ATT)=.179, p=0.03). The 
analysis thus demonstrates that nursing homes were able to expand 
staffing in response to the new requirement, notwithstanding workforce 
challenges since the pandemic.
    One limitation of the analysis was the small number of nursing 
homes included because the analysis focused on a subset of nursing 
homes with the strongest incentive to respond to the new policy, that 
is, those with high Medicaid resident shares (>= 75th percentile) and 
initial staffing levels below the new Massachusetts minimum staffing 
requirement (HPRD <= 3.58 for total nurse staffing), resulting in 1,617 
out of 15,333 nursing homes nation-wide for the control group, and 40 
out of 373 nursing homes in Massachusetts. Also, about one third of the 
nursing homes did not complete health inspection surveys due to the 
COVID-19 PHE, so there was a substantial amount of missing data for 
examining the safety outcome. Furthermore, the analysis of quality of 
care and safety outcomes was limited by the short post-implementation 
study period of Massachusetts's minimum staffing standards, which does 
not allow for sufficient time for a complete evaluation of the policy. 
Additionally, the impact analysis was focused on data from roughly the 
first year of implementation, which usually involves resource planning 
and operational changes to meet the new policy standards, and thus may 
not be representative.
    These study results show that there was an increase in NA staffing, 
which supports the proposed policy to require facilities to meet the 
minimum staffing standards or otherwise be subject to, civil money 
penalties and denial of payment for all Medicare and/or Medicaid 
individuals among other penalties in accordance with 42 CFR 488.406.
(5) Cost and Savings Analysis
    The cost analyses were conducted to determine any associated 
incremental costs that nursing homes would likely experience to meet 
minimum staffing standards, as well as any Medicare savings. Cost 
analyses used the 2021 Q2 PBJ System (staffing data), facility-specific 
information on hourly costs for RNs, LPN/LVNs, and NAs from Worksheet 
S-3, FY 2021 Part V of the Medicare Cost Report for 14,688 SNFs, and 
information on resident census that is available from files produced 
for comparison to evaluate any associated incremental costs. We note 
that the cost analyses were independent of a facility's case-mix.
    Study findings indicate that the staffing costs for increasing RN 
and NA staffing levels in nursing homes to meet the minimum staffing 
standards ranges from $2.2 to $6.0 billion per year. The minimum 
estimated cost savings to Medicare, based on savings from the RN 
staffing requirement, are from the decreased use of acute care services 
(fewer hospitalizations and emergency department visits) and increased 
community discharges (defined as a reduction in Medicare-covered SNF 
days); cost savings ranges from $187 to $465 million. The decision to 
focus on estimated savings for RNs only, was because RN staffing levels 
were found to have a much stronger and a more consistent positive 
correlation with hospitalizations and emergency department visits than 
NAs or LPNs.
    These quantitative analyses of savings to Medicare were limited to 
quality metrics for which there are extant secondary data. However, 
there are likely additional benefits to quality of care and life that 
cannot be fully identified through the analysis in the 2022 Nursing 
Home Staffing Study. Moreover, these analyses do not consider 
facilities' existing resources, ability to pay for possible staffing 
levels, or access to trained healthcare professionals.
    Overall, the study \67\ was unable to examine the relationship 
between staffing levels by shift and quality/patient safety because the 
PBJ System does not include information on staffing by shift. In 
addition, there was limited information on non-nurse staffing, so the 
study team was unable to examine minimum staffing standards for non-
nurse staff.
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    \67\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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c. Listening Sessions
    In addition to commissioning the 2022 Nursing Home Staffing Study 
and issuing the FY 2023 SNF PPS RFI, we also held two listening 
sessions on June 27, 2022, and August 29, 2022, to provide information 
on the study and solicit additional input on the study design and 
approach for establishing minimum staffing standards. The first 
listening session was attended by 18 interested parties representing 
various groups within the LTC community. During this session, this 
small group discussed several ``big picture'' questions about minimum 
staffing standards and provided input on the overall study approach. 
The second listening session was attended by 668 participants who 
offered feedback on specific questions that were included on the 
registration form, such as how to ensure that health equity/health care 
disparities are addressed when establishing minimum nurse staffing 
standards and how minimum staffing standards should consider 
differences in costs for job categories and variations across States.
    During the August 2022 listening session,\68\ participants shared 
their opinions that the current state of staffing standards was not 
adequate, and there was consensus that minimum staffing standards 
should be the same across the country. Participants recommended that 
CMS consider resident characteristics and care needs when developing 
staffing standards. Participants indicated that the interdisciplinary 
team and the care provided by non-nursing staff such as physical, 
occupational, speech therapists, respiratory therapists (especially 
with pediatric specialty/ventilator units), podiatrists, and 
psychiatrists also need to be considered. Others also suggested that 
the inclusion of non-nurse staff to meet staffing standards may 
positively contribute to aspects of quality of life for residents.
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    \68\ https://www.cms.gov/nursing-homes.
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    Similar to the suggestions received in the FY 2023 SNF PPS RFI, 
some participants suggested that CMS create a staff-to-resident ratio 
minimum standard, which can further support a HPRD staffing standard. 
Participants also suggested that facilities should report and display 
staff-to-resident ratios on a daily basis for all shifts. Participants 
in favor of a staff-to-resident ratio requirement noted that increased 
transparency will help residents and family members to easily determine 
if the facility is in compliance with minimum staffing standards.
    Lastly, some participants indicated that minimum staffing standards 
should consider the need for consistent NA qualifications across all 50 
States and to allow for more online training to eliminate the backlog 
of availability for NAs testing and increase the availability of 
classes near candidates to support staff shortages.

[[Page 61365]]

4. Ongoing CMS Initiatives and Programs Impacting LTC Facilities
    In establishing the proposed minimum staffing standards, we also 
considered ongoing CMS policies, programs, and operations, including 
Medicaid institutional payment and transparency, the SNF prospective 
payment system, the SNF Value-based Purchasing Program (SNF VBP), 
oversight and enforcement, and CMS policies intended to enhance access 
to Medicaid home and community-based services and promote community-
based placements.
a. Medicaid Institutional Payments and Payment Transparency
    In this proposed rule we are also proposing a Medicaid 
Institutional Payment Transparency provision that is intended to 
promote public payment transparency. Greater transparency will help us 
assess the extent to which LTC facilities with a large Medicaid 
population have challenges achieving compliance with minimum staffing 
standards. State Medicaid Agencies would be required to publicly report 
the percentage of payments expended for direct care workers and support 
staff services in Medicaid-participating nursing facilities and 
Intermediate Care Facilities for Individuals with Intellectual 
Disabilities (ICF/IID) (see section III. of this proposed rule). We 
expect that as a result of this transparency requirement, some 
facilities would likely increase staffing independent of our proposed 
minimum staffing standards.
b. Medicare Skilled Nursing Facility Prospective Payment System
    The Medicare Skilled Nursing Facility Prospective Payment System is 
a comprehensive per diem rate under Medicare for all costs for 
providing covered Part A SNF services (that is, routine, ancillary, and 
capital-related costs). There are over 15,000 Medicare-certified SNFs. 
The FY 2023 SNF PPS proposed rule published on April 4, 2023 updated 
Medicare payment policies and rates for SNFs for FY 2024. The FY2023 
SNF PPS proposed rule estimated that the aggregate impact of the 
payment policies in the rule would result in a net increase of 3.7 
percent, or approximately $1.2 billion, in Medicare Part A payments to 
SNFs in FY 2024. We note that Section 1888(e)(4)(E) of the Act requires 
the SNF PPS payment rates to be updated annually. These updates take 
into account a number of factors, including but not limited to, wages, 
salaries, and other labor-related costs. Specifics regarding the 
process to update SNF PPS payment rates are discussed in the rule.\69\
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    \69\ Medicare Program; Prospective Payment System and 
Consolidated Billing for Skilled Nursing Facilities; Updates to the 
Quality Reporting Program and Value-Based Purchasing Program for 
Federal Fiscal Year 2024. https://www.federalregister.gov/documents/2023/04/10/2023-07137/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities.
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c. Skilled Nursing Facility (SNF) Value-Based Payment (VBP) Program 
Staffing Measure
    In the FY 2023 SNF PPS final rule, we adopted a new Total Nurse 
Staffing quality measure under the SNF VBP Program, which is used to 
provide an incentive to LTC facilities for improving quality of care 
provided to residents.\70\ Performance on the Total Nurse Staffing 
measure begins in FY 2024, and payment adjustments based on performance 
on this measure (as well as others) occurs in FY 2026. This is a 
structural measure that uses auditable electronic data reported to CMS' 
PBJ system to calculate HPRD for total nurse staffing. Our proposal is 
not to be duplicative of this existing measure; rather, we expect our 
proposed minimum staffing standards to be complementary by establishing 
a consistent and broadly applicable national floor at which residents 
are at a significantly lower risk of receiving unsafe and low-quality 
care. At the same time, the Total Nurse Staffing quality measure will 
drive continued improvement in staffing across LTC facilities.
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    \70\ https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2023-skilled-nursing-facility-prospective-payment-system-final-rule-cms-1765-f.
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d. Nursing Home Survey and Enforcement
    The LTC minimum staffing standards proposed in this regulation are 
part of the Federal participation requirements for LTC facilities and 
these Federal participation requirements are the basis for survey 
activities and for the minimum health and safety requirements that must 
be met and maintained to receive payment and remain as a Medicare or 
Medicaid provider. As such compliance with these requirements will be 
assessed through CMS' existing survey, certification, and enforcement 
process.\71\ Enforcement actions taken against LTC facilities that are 
not in compliance with these Federal participation requirements are 
called remedies. The agency that conducts on-site surveys cites 
deficiencies that indicate the specific Federal participation 
requirements that the facility did not meet. Sections 1819(h) and 
1919(h) of the Act, as well as 42 CFR 488.404, 488.406, and 488.408, 
provide that CMS or the State may impose one or more remedies in 
addition to, or instead of, termination of the provider agreement when 
the CMS or the State finds that a facility is out of compliance with 
the Federal participation requirements. Specifically, enforcement 
remedies that may be imposed include the following:
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    \71\ https://www.cms.gov/medicare/provider-enrollment-and-certification/surveycertificationenforcement/nursing-home-enforcement.
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     Termination of the provider agreement;
     Temporary management;
     Denial of payment for all Medicare and/or Medicaid 
individuals by CMS;
     Denial of payment for all new Medicare and/or Medicaid 
admissions;
     Civil money penalties;
     State monitoring;
     Transfer of residents;
     Transfer of residents with closure of facility;
     Directed plan of correction;
     Directed in-service training; and
     Alternative or additional State remedies approved by CMS.
    In general, to select the appropriate enforcement remedy(ies), the 
scope and severity levels of the deficiencies is assessed. The severity 
level reflects the impact of the deficiency on resident health and 
safety and the scope level reflects how many residents were affected by 
the deficiency. The survey agency determines the scope and severity 
levels for each deficiency cited at a survey.
    As part of these survey and enforcement activities, we currently 
publish data for all LTC facilities on the Care Compare website, 
including number of certified beds, an overall Five Star rating, and 
three individual star ratings in the categories of inspections, 
staffing, and quality measurement.\72\ In addition, individual 
performance measures are included on Care Compare. With respect to 
staffing, this includes the following staffing data: total number of 
nurse staff HPRD, RN HPRD, LPN/LVN HPRD, and NA HPRD, as well as some 
additional staffing measures, including weekend hours. These published 
data are collected through a variety of mechanisms, including during 
CMS surveys (inspection data), through the reporting

[[Page 61366]]

of PBJ System and are also self-reported by LTC facilities to us.
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    \72\ Centers for Medicare & Medicaid Services Medicare.gov. Find 
and Compare Nursing Homes Providers near you https://www.medicare.gov/care-compare/?providerType=NursingHome&redirect=true.
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    In general, facilities report employing three types of nursing 
staff: RNs, LPNs/LVNs, and NAs. We have been moving towards more data-
driven enforcement, including use of the self-reported PBJ System data 
to guide monitoring, surveys and enforcement of existing staffing 
requirements. We continue to recognize the value of assessing the 
sufficiency of a facility's staffing based on observations of resident 
care conducted during the onsite survey. For example, while compliance 
with numeric minimum staffing standards could be assessed using PBJ 
System data, it is possible that due to a facility's layout, 
management, and staff assignments, a facility could meet the numeric 
staffing standards but not provide the sufficient level of staffing 
needed to protect residents' health and safety. Resident health status 
and acuity (for example, proportion of residents with cognitive decline 
or use of ventilators) are also factors in determining adequate 
staffing. Therefore, when assessing the sufficiency of a facility's 
staffing it is important to note that any numeric minimum staffing 
requirement is not a target and facilities must assess the needs of 
their resident population and make comprehensive staffing decisions 
based on those needs. The additional requirements proposed in this rule 
to bolster facility assessments are intended to address this need and 
guard against any attempts by LTC facilities to treat the minimum 
staffing standards included here as a ceiling, rather than a floor.
    In summary, the benefits and success of minimum staffing standards 
are heavily dependent on the survey process. Therefore, in establishing 
numerical minimum staffing standards our goal is to ensure that they 
are both implementable and enforceable, as determined through both the 
PBJ System as well as on-site surveys.
e. Medicaid Home and Community-Based Services
    We remain committed to a holistic approach to meeting the long-term 
care needs of Americans and their families. This requires a focus on 
access to high-quality care in the community while also ensuring the 
health and safety of those who receive care in LTC facilities. In the 
proposed April 2023 Ensuring Access to Medicaid Services (Access NPRM) 
and Medicaid and CHIP Managed Care Access, Finance, and Quality 
(Managed Care NPRM), we proposed several policies intended to work 
alongside those included in this proposed rule. These proposals require 
that at least 80 percent of Medicaid payments for personal care, 
homemaker and home health aide services be spent on compensation for 
the direct care workforce (as opposed to administrative overhead or 
profit); establish standardized reporting requirements related to 
health and safety, beneficiary service plans and assessments, access, 
and quality of care; and promote transparency through public reporting 
on quality, performance, compliance as well as Medicaid managed care 
plans' payment rates for direct care workers. Additionally, we remain 
committed to facilitating transfers from LTC facilities to the 
community through the continued implementation of the Money Follows the 
Person program.\73\
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    \73\ Money Follows the Person [bond] Medicaid, https://www.medicaid.gov/medicaid/long-term-services-supports/money-follows-person/index.html.
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    Notably, we believe that the proposed minimum staffing standards 
will improve quality of care which includes facilitating the transition 
of care to community based care services; similar to findings that are 
reported in the 2022 Nursing Home Staffing Study as well as potential 
Medicare savings.

B. Provisions of the Proposed Regulations

    As discussed above, meeting minimum staffing standards may be 
influenced by and/or affect existing CMS initiatives and programs, and 
programs within LTC facilities. Given these factors and the broad 
spectrum of suggestions and inputs discussed, we acknowledge that there 
are many considerations and potential policy options for establishing 
minimum staffing standards. Therefore, we propose a comprehensive 
staffing approach that consists of the three following elements: (1) 
establishing new minimum nurse staffing standards based on case-mix 
adjusted staffing; (2) revising the on-site RN requirement; and (3) 
revising the existing facility assessment requirement. We believe, when 
taken together, these three elements will establish a consistent and 
broadly applicable national minimum staffing standards as a floor, 
while also ensuring that LTC facilities staff beyond the minimum 
staffing standards as needed, based on their resident population.
    While we expect LTC facilities to meet the comprehensive staffing 
standards, we acknowledge that there may be circumstances related to 
the nursing workforce that require efforts to both ensure access to 
care and maintain quality care and safety. Therefore, we are proposing 
options for exemptions and a staggered implementation of the proposal's 
components for meeting the minimum staffing standards. This 
comprehensive approach aims to strike the appropriate balance between 
ensuring resident health and safety, while guarding against unintended 
consequences, and preserving access to care.
    Our goal is to protect resident health and safety and ensure that 
facilities are considering the unique characteristics of their resident 
population in developing staffing plans, while balancing operational 
requirements and supporting access to care. Moreover, the comprehensive 
staffing standards will provide staff with the support they need to 
safely care for residents.
    We believe that the elements of the proposed comprehensive staffing 
standards discussed in this rule support these goals and align with the 
key function of the LTC facility participation requirements, which is 
to establish minimum standards to ensure safety and quality care for 
all residents.
    We also acknowledge the impact that proposed minimum staffing 
standards will have on the LTC facility industry and recognize the 
potential for unintended consequences, such as facilities' 
misinterpretation of the minimum staffing standards. Such 
misinterpretation could result in inappropriate behaviors, such as 
choosing to staff only at the minimum RN and NA HPRD requirements, 
without adequate consideration of facility characteristics and resident 
acuity and needs; healthcare workforce substitution (hiring for one 
position by eliminating another); task diversion (assigning non-
standard tasks to a position); or gamesmanship around composition of 
the patient population (avoiding residents with more complex medical 
needs). Such actions would not result in the improved safety, quality, 
and person-centered care that we seek in facilities. As such, we are 
soliciting public comments on the policy proposals outlined below, in 
particular the feasibility of the proposals, any unintended 
consequences, and alternatives that we should consider. We will 
consider all feedback to inform the final policy.
1. Nursing Services (Sec.  483.35)
a. Sufficient Staff (Sec.  483.35(a)(1))
    In general, LTC facilities report employing three types of nursing 
staff: RNs, LPN/LVNs, and NAs. RNs are assigned both administrative 
roles and resident assessment and care planning, which typically 
results in less hands-on

[[Page 61367]]

time with residents and more non-clinical skills (for example, 
managerial and time management skills). They are able to assess 
resident health problems and needs, develop and implement care plans, 
and maintain medical records. LPN/LVNs are entry-level licensed nurses 
providing basic level care under a RN or physician supervision such as 
checking blood pressure, changing bandages and dressings, and 
documenting patient care records. NAs spend the most time providing 
care to residents by assisting with activities of daily living (for 
example, feeding, bathing, and dressing). Moreover, roles for NAs may 
differ from LPN/LVNs depending on the State.
    NAs are paid on average $16.90/hour, whereas RNs and LVN/LPNs are 
paid an average hourly wage of $37.11 and $28.17 in Nursing Care 
Facilities.\74\ While the work of NAs and other direct care workers, 
like home health aides and personal care assistants, requires 
considerable technical and interpersonal skills, these workers 
historically receive low pay, rarely receive benefits, and experience 
high injury rates.\75\ Despite the rising demand for services, direct 
care workers continue to earn poverty-level low wages. Almost one-half 
of the direct care workforce (45 percent) live below 200 percent of the 
Federal poverty level and about one-half (47 percent) rely on public 
assistance. Recent research by the U.S. Assistant Secretary for 
Planning and Evaluation finds that wages for direct care workers, 
including NAs, lag behind workers in other industries with similar 
entry-level requirements, exacerbating recruitment and retention 
challenges. According to its findings, average hourly wages also vary 
considerably State to State--as low as $10.90 for NAs in Louisiana to 
as high as $18.66 in Alaska.
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    \74\ Nursing and Residential Care Facilities--May 2022 OEWS 
Industry-Specific Occupational Employment and Wage Estimates 
(bls.gov).
    \75\ Wages of Direct Care Workers Lower than Other Entry Level 
Jobs in most States, Assistant Secretary for Planning and 
Evaluation, April, 2023 https://aspe.hhs.gov/reports/dcw-wages.
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    Current regulations at Sec.  483.35(a)(1)(i) and (ii) require 
facilities to have sufficient numbers of licensed nurses and other 
nursing personnel, including but not limited to NAs, available 24 hours 
a day to provide nursing care to all residents in accordance with the 
resident care plans.\76\ In the 2016 LTC final rule mentioned 
previously,\77\ CMS described the complexity of establishing minimum 
staffing standards at that time given that the PBJ System reporting 
program had only been recently implemented. Therefore, we did not have 
adequate information in terms of facility-level staffing data that 
would be needed to establish minimum staffing standards. We further 
stated that once a sufficient amount of data was collected and 
analyzed, we could re-visit the establishment of minimum staffing 
standards in LTC facilities. As of calendar year 2022, we have access 
to about 6 years of self-reported data from the PBJ System which are 
sufficient to examine the staffing issues in LTC facilities that still 
persist and were exacerbated by the COVID-19 PHE.
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    \76\ 42 CFR 483.35 https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
    \77\ Medicare and Medicaid Programs; Reform of Requirements for 
Long-Term Care Facilities. (81 FR 68688) https://www.federalregister.gov/documents/2016/10/04/2016-23503/medicare-and-medicaid-programs-reform-of-requirements-for-long-term-care-facilities.
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    According to CMS survey and enforcement data, over 1,000 facilities 
were cited for insufficient staffing in 2022 and residents, family, 
ombudsmen, researchers, and others continue to report to CMS that 
understaffing negatively affects care. There is also considerable 
variation in State staffing requirements. As previously stated, a 
review of State staffing requirements indicates that 38 States and the 
District of Columbia currently have minimum staffing standards in LTC 
facilities, but these standards differ across States by staff types, 
hours and measurement across States, and more so during the COVID-19 
PHE.\78\ The proposed RN requirement of 0.55 HPRD is higher than every 
State, and only lower than the District of Columbia. The proposed NA 
requirement of 2.45 HPRD is higher than all States and the District of 
Columbia, based on data from September 2022.
---------------------------------------------------------------------------

    \78\ State Policies Related to Nursing Facility (NF) Staffing 
https://www.macpac.gov/wp-content/uploads/2022/03/State-Policies-Related-to-Nursing-Facility-Staffing.xlsx.
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    For example, only 10 States out of the 38 States have minimum HPRD 
standards for NAs ranging from 1.04 to 2.44 (see Table 2).

               Table 2--HPRD Requirement for NAs by State
------------------------------------------------------------------------
                                                                  CNAs
                            State                                (HPRD)
------------------------------------------------------------------------
1. California................................................        2.4
2. Delaware..................................................        1.6
3. Florida [Dagger]..........................................        2.0
4. Montana...................................................        1.2
5. New Jersey................................................       1.04
6. New York..................................................        2.2
7. Oregon....................................................       2.16
8. Rhode Island..............................................       2.44
9. South Carolina............................................       1.63
10. Vermont..................................................        2.0
------------------------------------------------------------------------
Notes: CNAs= certified nursing assistants or nursing assistants; HPRD=
  hours per resident day.
[Dagger] FL revised CNA HPRD from 2.45 to 2.0 on 4/2022.
Source: RTI International, 2021, Review of State Policies Related to
  Nursing Facility Staffing.

    Some States have implemented a total hour per resident day (HPRD) 
model, with some including licensed nurses in this calculation, whereas 
others exclude LPN/LVNs but include RNs, DONs, and NAs only. For 
example, the District of Columbia requires a minimum daily average of 
4.1 hours of direct nursing care per resident per day (with an 
opportunity to adjust the requirements above or below this level, as 
determined by the Director of the Department of Health), an RN on site 
24 hours a day, 7 days a week, plus additional nursing and medical 
staffing requirements.\79\ Some States implemented a ratio of numbers 
of full-time equivalent NAs per resident. For example, California 
requires 3.5 HPRD for total nurse staffing with at least 0.24 of those 
hours provided by RNs, and 2.4 HPRD for NAs, and no HPRD required for 
LPN/LVNs. Massachusetts requires 3.58 HPRD for total nurse staffing 
with at least 0.508 of those hours provided by a RN.\80\ Arkansas 
requires at least 3.36 average HPRD for nurse and non-nurse staff each 
month to include licensed nurses, NAs, medication assistants, 
physicians, physician assistants, licensed physical or occupational 
therapists or licensed therapy assistants, registered respiratory 
therapists, licensed speech language pathologists, infection 
preventionists, and other healthcare professionals licensed or 
certified in the State, plus requirements for minimum numbers of 
licensed nurses per residents per shift. There is also limited evidence 
on how these different staffing standards were developed and their 
impact.
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    \79\ https://doh.dc.gov/sites/default/files/dc/sites/doh/publication/attachments/Nursing_Facility_Regulations_Health_Care_Facilities_Improvement_2012.pdf.
    \80\ https://theconsumervoice.org/uploads/files/issues/CV_StaffingReport.pdf.

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[[Page 61368]]

    The 2022 Nursing Home Staffing Study \81\ included an analysis of 
PBJ System data for the fourth quarter of 2019 through the first 
quarter of 2022. The 2022 Nursing Home Staffing Study, as discussed 
previously, provided CMS with findings to inform the proposal for 
minimum staffing standards, and discussed trade-offs associated with 
balancing cost and feasibility with implications for acceptable quality 
care and safety, especially among the lowest performing facilities 
(that is, at or below the 25th percentile for total safety and quality 
measure scores) that are at the most risk for providing unsafe care.
---------------------------------------------------------------------------

    \81\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare 
and Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    After considering all of the available evidence and extensive 
comments provided, we are proposing revisions to the Nursing Services 
regulations at Sec.  483.35 to establish national, quantitative minimum 
staffing standards to ensure all facilities provide at least the same 
baseline level of high-quality and safe care to residents across all 
participating LTC facilities. We propose to revise Sec.  
483.35(a)(1)(i) and (ii) to further define ``sufficient numbers'' by 
establishing a numerical minimum level for HPRD for RNs and NAs. We 
also propose to revise Sec.  483.5 to include the definition of ``hours 
per resident day'' (HPRD), that is, staffing hours per resident per day 
is the total number of hours worked by each type of staff divided by 
the total number of residents as calculated by CMS.\82\ Specifically, 
at Sec.  483.35(a)(1)(i) we propose individual nurse staffing type 
standards for RNs and NAs. We propose to require facilities to have 
minimum staffing standards of 0.55 HPRD of RNs and 2.45 HPRD of NAs as 
well as to maintain sufficient additional nursing personnel, including 
but not limited to LPN/LVNs, and other clinical and non-clinical staff, 
to ensure safe and quality care, based on the proposed facility 
assessment requirements at Sec.  483.71. CMS is also seeking comments 
on a minimum total nurse staffing standard of 3.48 HPRD discussed later 
in the rule.
---------------------------------------------------------------------------

    \82\ https://data.cms.gov/provider-data/dataset/4pq5-n9py.
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    We are not proposing minimum nurse staffing standards that include 
HPRD for licensed nurses (that is, RNs plus LPN/LVNs) nor for total 
nurse staffing (that is, RNs, LPN/LVNs, and NAs). This proposed policy 
is based on the 2022 Nursing Home staffing study findings and other 
literature evidence demonstrating that RNs and NAs have a larger effect 
on quality than LPN/LVNs. In addition, literature and statistical 
evidence suggests that improved clinical outcomes are associated with 
increasing the HPRD rates of RNs and NAs \83\ especially among nursing 
homes that have a high reliance on Medicaid.\84\ Moreover, when LPN/
LVNs work with higher numbers of HPRD for RNs and NAs (that is, total 
nurse staff) it appears to reduce delayed or omitted care and increase 
gross cost savings to Medicare.\85\ We believe that establishing 
national, numerical standards of direct care hours will improve safety 
and quality in many LTC facilities. By creating a consistent Federal 
floor for staffing expectations, we will better define the minimum 
number of care hours residents should receive to protect health and 
safety, while also facilitating strengthened oversight and enforcement.
---------------------------------------------------------------------------

    \83\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare 
∧ Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
    \84\ Bowblis J.R. (2011). Staffing ratios and quality: an 
analysis of minimum direct care staffing requirements for nursing 
homes. Health services research, 46(5), 1495-1516. https://doi.org/10.1111/j.1475-6773.2011.01274.x.
    \85\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare & 
Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    As an example, when establishing the proposed HPRD level of 0.55 
for RNs and 2.45 for NAs, we note that the minimum number of RN hours 
(that is 0.55 HPRD) provided in a facility that has 100 residents and 
runs an 8-hour shift per 24 hours, would require a total of 55 RN hours 
per 24 hours.\86\ In other words, at least two RNs on staff each 8-hour 
shift, plus a third RN for one shift, would be necessary in this 
scenario although no per shift minimum is being established in this 
rule. Similarly, the minimum number of NA hours (that is 2.45 HPRD) 
provided in a facility that has 100 residents and runs an 8-hour shift 
per 24 hours will require at least a total of 245 NA hours per 24 
hours.\87\ In other words, at least 10 NAs on staff each 8-hour shift, 
plus a third NA for one shift would be necessary in this scenario 
although no per shift minimum is being established in this rule.
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    \86\ 100 residents x 0.55HPRD = 55 RN hours for 24 hours; or 18 
RN hours/8-hour shift; that is ~2 RNs.
    \87\ 100 residents x 2.45HPRD = 245 NA hours for 24 hours; or 81 
NA hours/8-hour shift; that is ~10 NAs.
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    These proposed levels for hours of care would establish the minimum 
nurse staffing levels needed to provide safe and high-quality nursing 
services to each resident per day. We underscore that these standards 
reflect only the absolute minimum floor adjusting for the average 
acuity across all LTC facilities, and the required hours of nursing 
care may be greater but never lower than the proposed minimum 
standards, if the acuity needs of residents in a facility requires a 
higher level of care. Additionally, the proposed staffing levels 
require all facilities to meet at least this minimum floor, even if the 
facility has below average acuity, given that resident population can 
shift more rapidly than staffing plans; most facilities have either an 
average acuity or higher of resident population; and as noted above, 
the evidence can also support a higher range of staffing thresholds.
    Notably, we are proposing to specify HPRD for RNs and NAs in the 
minimum staffing requirement at Sec.  483.35(a) and are not proposing a 
total nurse staffing level under which facilities have the flexibility 
to decide between types of licensed nurses to meet the minimum 
requirement. We have taken this approach given the evidence that shows 
a strong positive association between RN staffing levels and safety and 
quality, as well as NA staffing levels at higher HPRDs. Literature 
evidence also indicates that the increased presence of RNs in nursing 
facilities would help address several issues.
    First, research evidence suggests that greater RN presence has been 
associated with higher quality of care and fewer deficiencies. Second, 
it has been reported in the literature that where standards provide 
flexibility as between types of licensed nurses (that is, do not 
specify RN hours), LPN/LVNs may find themselves practicing outside of 
their scope of practice partly because there are not enough RNs 
providing direct patient care and supervision of LPN/LVNs. The 
specificity of this approach would increase the number of hours per day 
that a LTC facility must have RNs in the facility and would alleviate 
concerns about LPN/LVNs engaging in activities outside their scope of 
practice in the face of resident need during times when no RN is on 
site (80 FR 42168, 42200). Moreover, to prevent a high rate of unusual 
patient safety events, the National Academy of Medicine (NAM) (formerly 
the Institute of Medicine (IOM)) suggests having adequate staffing 
levels, specifically NAs, who provide most of the care to nursing home 
residents.\88\ In addition, our proposal,

[[Page 61369]]

which focuses on sufficient numbers of nursing staff, does not 
contemplate staffing levels for non-nursing staffing because nursing 
staff are most critical to ensuring minimum standards of care, and 
there is insufficient information on non-nurse staffing levels in the 
PBJ System and other available data sources that limits our efforts to 
examine staffing requirements for non-nurse staff at this time. We 
solicit comment on the need to allow for substitution, such as 
substituting LPN/LVNs for NAs, in extraordinary cases and specifically 
what extreme circumstances would appropriately allow for such 
substitution.
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    \88\ Institute of Medicine (US) Committee on the Work 
Environment for Nurses and Patient Safety. Keeping Patients Safe: 
Transforming the Work Environment of Nurses. Edited by Ann Page, 
National Academies Press (US), 2004. doi:10.17226/10851.
---------------------------------------------------------------------------

    As noted, based on the findings reported in the 2022 Nursing Home 
Staffing Study, information gathered through the FY2023 SNF PPS RFI, 
listening sessions, assessment of the PBJ System data, and review of 
the literature evidence, we are proposing individual minimum staffing 
levels at 0.55 HPRD for RNs and 2.45 HPRD for NAs. In establishing this 
proposal, we considered the context of substantial cost that the 
proposed policy may impose on LTC facilities, especially those with 
limited resources that may face difficult decisions in terms of how to 
allocate funding and resources (see Regulatory Impact Section for more 
detail). Likewise, the evidence from the 2022 Nursing Home Staffing 
Study supports the proposed minimum staffing level for RNs and NAs for 
improving safety and leading to higher quality care. As such, we are 
proposing minimum nurse staffing standards for these two types of 
nursing staff that we believe are reasonable and creates meaningful, 
positive impact on resident quality and safety. These standards will 
especially help ensure all facilities reach acceptable levels of safety 
and quality care, working in tandem with CMS' other quality improvement 
programs that focus on raising performance beyond minimum requirements.
    The proposed minimum nurse staffing standards would create broadly 
applicable minimum standards at which all residents across all LTC 
facilities would be at a significantly lower risk of receiving unsafe 
and low-quality care. LTC facilities would be required to staff above 
these minimum adjusted baseline levels, as appropriate, to address the 
specific needs of their unique resident population. This additional 
staffing should be based at the facility level using the facility 
assessment and an examination of resident acuity levels.
    LTC facilities are also responsible for compliance with other 
requirements for participation, including but not limited to Sec.  
483.24, which requires that each resident must receive and the facility 
must provide the necessary care and services to attain or maintain the 
highest practicable physical, mental, and psychosocial well-being, 
consistent with the resident's comprehensive assessment and plan of 
care. Therefore, we propose to add a new Sec.  483.35(a)(1)(v) to 
reinforce this standard. Specifically, at Sec.  483.35(a)(1)(v), we 
propose to specify that compliance with minimum HPRD for RN and NA 
should not be construed as approval for a facility to have fewer 
nursing and non-nursing staff than the number of staff with the 
appropriate competencies and skills sets necessary to assure resident 
safety, and to attain or maintain the highest practicable physical, 
mental, and psychosocial well-being of each resident, as determined by 
resident assessments, acuity and diagnoses of the facility's resident 
population in accordance with the facility assessment required at 
current Sec.  483.70(e)), which we propose to be redesignate as new 
Sec.  483.71.
    The acuity and characteristics of residents in LTC facilities has 
continued to evolve and change over the years. For example, there are 
more residents with a psychiatric diagnosis with reports showing that 
the proportion of residents with schizophrenia increased from 6.5 
percent in 2000 to 12.4 percent in 2017.\89\ There has also been an 
increase in the percentage of facilities with an Alzheimer's unit and 
more residents appear to need assistance with activities of daily 
living. For example, it was reported that on average 96 percent of 
residents at the facility level needed assistance with bathing in 2015, 
compared to the national average of 89 percent of residents in 
1985.\90\ Also the percentage of residents with bladder incontinence 
has also increased over the years from 49.3 to 62.1 percent.\3\
---------------------------------------------------------------------------

    \89\ M. Barton Laws, Aly Beeman, Sylvia Haigh, Ira B. Wilson, 
Ren[eacute]e R. Shield, Prevalence of Serious Mental Illness and 
Under 65 Population in Nursing Homes Continues to Grow. Journal of 
the American Medical Directors Association,Volume 23, Issue 7, 2022, 
Pages 1262-1263, https://doi.org/10.1016/j.jamda.2021.10.020.
    \90\ Fashaw, Shekinah A et al. ``Thirty-Year Trends in Nursing 
Home Composition and Quality Since the Passage of the Omnibus 
Reconciliation Act.'' Journal of the American Medical Directors 
Association vol. 21,2 (2020): 233-239. doi:10.1016/
j.jamda.2019.07.004.
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    Furthermore, there appears to be an increase in the proportion of 
younger residents, under 65 years of age, in part due to severe mental 
illness and substance use disorders, who have different needs from the 
traditional nursing home population.\91\ Given the variation in 
resident acuity and complexity of care required for a facility's unique 
resident population, facilities must make thoughtful, informed staffing 
plans and decisions that are focused on meeting resident needs, 
including maintaining or improving resident safety and quality of life, 
which will often result in the need for a facility to staff above the 
minimum nurse staffing requirement. Based on the needs of its resident 
population, an individual facility may need to maintain levels of HPRD 
for RN, NA and other staffing that surpasses the proposed minimum nurse 
staffing HPRD.
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    \91\ Laws, M Barton et al. ``Changes in Nursing Home Populations 
Challenge Practice and Policy.'' Policy, politics & nursing practice 
vol. 23,4 (2022): 238-248. doi:10.1177/15271544221118315.
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    This need for increased staff would be evidenced by the facility 
assessment (Sec.  483.70(e)) and resident assessments (Sec.  483.20) 
which would require facilities to make staffing and care planning 
decisions that account for resident acuity, physical/cognitive 
abilities, conditions, diagnoses, etc . . . Compliance with the 
numerical minimum staffing requirement is necessary but not necessarily 
sufficient to meet staffing needs for every facility. Later in this 
proposed rule, we discuss an additional element of this comprehensive 
proposal, revising the facility assessment requirement at Sec.  
483.70(e) which we believe would help avoid the unintended consequence 
of facilities inappropriately staffing at the minimum staffing 
requirement.
    We note that, as discussed previously, while the 0.55 and 2.45 HPRD 
standards were developed using case-mix adjusted data sources, the 
standards themselves will be implemented and enforced independent of a 
facility's case-mix. In other words, facilities must meet the 0.55 RN 
and 2.45 NA HPRD standards, regardless of the individual facility's 
patient case-mix. Based on the October 2021 Care Compare data, we 
estimate that approximately 6,094 facilities are staffed below a level 
of 0.55 for RNs, and approximately 9,998 are currently staffed below a 
level of 2.45 for NAs out of an estimated 14,688 total facilities with 
complete information. These estimates do not reflect proposed 
exemptions discussed below. Similarly, we recognize that there are 
facilities currently staffing at levels greater than or equal to 0.55 
RN HPRD (n=8,594) and 2.45 NA HPRD (n=4,690) who would not be directly 
impacted by this proposed policy at this time. However, staffing should 
be assessed on an ongoing basis and we emphasize that

[[Page 61370]]

the facility must provide adequate nursing care to meet the needs of 
each resident.
    Typical characteristics of LTC facilities that may need to staff up 
to meet this minimum requirement, based on having current staffing, 
below the proposed levels are:
     For-profit facilities (compared to government and non-
profit facilities).
     Larger facilities.
     Freestanding LTC facilities (relative to hospital-based).
     Facilities that are part of a Continuing Care Retirement 
Community.
     Facilities with higher shares of Medicaid residents.
     Facilities that are Special Focus Facilities (SFF) or SFF 
candidates.
     Rural facilities.
    We note that the existing statutory waiver for Medicaid NFs, 
authorized by section 1919(b)(4)(C)(ii) of the Act and implemented at 
Sec.  483.35(e) for a State to waive the requirements of Sec.  
483.35(b) to provide licensed nurses on a 24-hour basis would still be 
in place for NFs to pursue through the current waiver process. The 
statutory waiver is discussed further under Section II.B. 3. ``Hardship 
Exemption from the Minimum Hours Per Resident Day Requirements for RNs 
and NAs.'' In addition, we propose to add new paragraphs (a)(1)(iii) 
and (iv) to existing Sec.  483.35 to specify that facilities may be 
exempted from the minimum HPRD requirement for RNs and NAs using 
separate criteria, and to indicate the period of time that will be 
assessed to determine compliance.
    At new Sec.  483.35(a)(1)(iii), we propose facilities that are 
found non-compliant with the HPRD requirement for RNs and NAs and meet 
certain eligibility criteria may be exempted from the 0.55 HPRD for RNs 
and/or 2.45 HPRD for NAs requirements. The details of this exemption 
framework and the specific eligibility criteria are discussed further 
in section II.B.3. ``Hardship Exemption from the Minimum Hours Per 
Resident Day Requirements for RNs and NAs.'' of this rule. At new Sec.  
483.35(a)(1)(iv), we propose that determinations of compliance with 
minimum HPRD requirements for RNs and NAs will be made based on the 
most recent available quarter of PBJ System data submitted in 
accordance with the requirements at existing Sec.  483.70(p) 
(``Mandatory Submission of Staffing Information Based on Payroll Data 
in a Uniform Format'').
    We solicit comments on the timeframe used to determine compliance 
with the minimum HPRD, specifically if the lookback period should be 
longer, for example 1 year to cover a full certification period, or 
some other timeframe to ensure the most reliable and realistic 
assessment of staffing data. We also invite public comments on the 
following proposals discussed in this section. As highlighted 
throughout the discussion, we acknowledge multiple avenues for 
establishing a minimum nurse staffing requirement. Based on the 
proposed policy presented in this rule, we are seeking feedback 
regarding whether or not alternative policy options are necessary to 
meet and maintain acceptable quality and safety within LTC facilities, 
while balancing a facility's ability to comply and ensure access to 
care.
    In developing the proposed rule, we considered varying staffing 
models that are available and different approaches we could have 
adopted for establishing minimum nurse staffing standards. For example, 
we could have adopted multiple different types of combinations of 
staffing requirements, such as a four-part requirement (inclusive of a 
total nurse staffing ratio, RNs, LPN/LVNs, and NAs) or a three-part 
requirement (inclusive of a total nursing staffing ratio, RNs, NAs or 
separate standards for RNs, LPN/LVNs, and NAs). We also considered that 
LTC facilities differed across States in their reliance on LPN/LVNs, 
which was one of the reasons that we did not set a minimum requirement 
for LPN/LVNs, in addition to available evidence on LPN/LVN associations 
with safety and high--quality care. Alternatively, we could have 
proposed staffing requirements for professionals such as social 
workers, therapists, feeding assistants and other non--nurse staff in 
the minimum staffing requirement. However, the HPRD reported in PBJ 
System data for non-nurse staff were insufficient for use in 
establishing minimum staffing requirements at this time.
    We propose to use HPRD that LTC facilities self-report to CMS and 
currently reported and auditable in the CMS' PBJ System. However, we 
recognize that staffing levels can be measured in at least 19 different 
ways with HPRD being the most frequently used.\92\ This includes 
measuring staffing levels as either full time equivalent per resident, 
full time equivalent per 100 beds, minutes per resident day, or nursing 
staff to resident ratios. Alternative minimum staffing policy options 
could also focus on the need to increase or decrease the number of HPRD 
or FTEs by nurse staff and/or type or on specifying the number by shift 
(including day, evening, night, or weekends or over a 24-hour period).
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    \92\ Clemes, S., Wodchis, W., McGilton, K., McGrail, K., & 
McMaho, M. (2021). The relationship between quality and staffing in 
long-term care: A systematic review of the literature 2008-2020. 
International Journal of Nursing Studies, 122, https://doi.org/10.1016/j.ijnurstu.2021.104036.
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    We are soliciting comments on establishing a total nurse staffing 
standard such as 3.48 HPRD among other alternatives, in place of a 
requirement only for RNs and NAs, or in addition to a requirement for 
RNs and NAs. For example, we considered an alternative 3.48 HPRD for 
the total nurse staffing standard--inclusive of the 0.55 HPRD RN and 
2.45 HPRD NA minimum standards--based on the evidence from the 2022 
Nursing Home Staffing Study, in addition to other factors discussed 
throughout the proposed rule. We considered 0.55 HPRD for RNs and 2.45 
HPRD for NAs as a part of this alternative total nurse staffing 
standard based on the evidence from the 2022 Nursing Home Staffing 
Study and other inputs; 0.55 HPRD for RN and 2.45 HPRD for NA staffing 
were found to be positively associated with safety and quality. 
Furthermore, NAs spend the most time providing care to residents by 
assisting with activities of daily living (for example, feeding, 
bathing, and dressing). Including an overarching minimum total staffing 
standard, such as 3.48 HPRD, could enable LTC facilities flexibility on 
staffing while protecting residents from preventable negative outcomes 
and would discourage facilities that currently meet the individual RN 
and NA minimums from decreasing total staffing. We seek comments on the 
necessity of a total staffing standard and whether a total staffing 
standard should be adopted alongside individual standards. We 
specifically seek comment on a standard of 3.48 HPRD among other 
alternatives.
    To maximize the usefulness of the feedback from interested parties 
on alternative policy options, we emphasize that the recommended policy 
must support and promote acceptable quality and safety in LTC 
facilities as the intended goal. We seek comments on the effectiveness 
of a minimum staffing standard in maintaining quality and safety and 
ways to minimize administrative burden, both for LTC facilities and for 
CMS in maintaining and enforcing such a standard and enhance compliance 
among LTC facilities through the use of automated data collection 
techniques or other forms of information technology.
    We encourage commenters to submit evidence and data to support 
their recommendations to the extent possible. All comments will be 
reviewed and analyzed, including consideration for

[[Page 61371]]

potential future rulemaking. We welcome comments on the following 
questions:
     What are the benefits and trade-offs associated with a 
two-part minimum nurse staffing standard as proposed (inclusive of RNs 
and NAs) relative to a three-part standard (inclusive of a 3.48 HPRD 
for total nurse staffing, RNs, and NAs) or a four-part standard 
(inclusive of a total nurse staffing ratio, RNs, LPNs/LVNs, and NAs)?
     What evidence did States rely on when they adopted their 
specific minimum nurse staffing standards, both with respect to HPRD 
and the inclusion or exclusion of certain nursing staff, and what is 
the rate of compliance?
     Whether we should consider a case-mix adjusted staffing 
HPRD for each facility to assess compliance with the minimum staffing 
standards? A case-mix adjusted staffing HPRD would adjust the minimum 
staffing levels based on the health status of the residents in each 
facility (known as ``case-mix adjustment''). Specifically, the case-mix 
adjustment methodology aggregates data from each resident's assessment 
(the Minimum Data Set (MDS)) to identify the general level of acuity of 
each facility's residents. The level of acuity is then combined with 
the facility's self-reported (that is, unadjusted) staffing information 
to calculate the level of staff the facility has that is equivalent to 
other facilities.
    If we were to adjust the minimum staffing levels based on the 
health status of the residents in each facility to ensure that staffing 
levels are adequate to meet the unique needs of the residents in each 
facility--
     What steps can CMS take to support LTC facilities in 
predicting what their case-mix adjusted staff might be and hire in 
expectation of that adjusted staffing level? What resources will 
facilities need to proactively calculate their existing HPRD for 
nursing staff, and what may be needed?
     What alternative policies or strategies should we consider 
to ensure that we enhance compliance, safeguard resident access to 
care, and minimize provider burden? Are there are other alternative 
policy strategies we should consider?
b. Registered Nurse (Sec.  483.35(b)(1))
    The existing LTC facility staffing regulations require an RN to be 
on site 8 consecutive hours a day for 7 days a week (Sec.  
483.35(b)(1)).\93\ This requirement serves as a minimum to protect the 
health and safety of LTC facility residents. In other words, an RN is 
required to be onsite for a total of 8 consecutive hours out of 24 
hours a day. The LTC facility may decide to allocate all 8 consecutive 
hours of RN time to one day shift or an evening shift for a 24-hour 
day, similarly to the HPRD proposed for RNs.
---------------------------------------------------------------------------

    \93\ 42 CFR 483.35, https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
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    However, to prevent avoidable patient safety events, some 
organizations have recommended higher recommendations to each RN 
staffing levels. For example, in 2022, the National Academies of 
Science, Engineering, and Medicine (NASEM) published a report that 
recommended direct-care RN coverage 24 hours a day, 7 days a week.\94\ 
Like NASEM, we are concerned that even with minimum HPRD standards, 
these residents are at risk for preventable safety events when there is 
no RN on site, particularly during evenings, nights, weekends, and 
holidays. Therefore, to avoid placing LTC facility residents at risk of 
preventable safety events due to the absence of an RN, we are proposing 
to revise Sec.  483.35(b)(1) to require LTC facilities to have an RN 
onsite 24 hours a day, 7 days a week.
---------------------------------------------------------------------------

    \94\ National Academies of Sciences, Engineering, and Medicine. 
2022. The National Imperative to Improve Nursing Home Quality: 
Honoring Our Commitment to Residents, Families, and Staff. 
Washington, DC: The National Academies Press. https://doi.org/10.17226/26526.
---------------------------------------------------------------------------

    LTC facilities provide care for residents with increasing medically 
complex and acute health conditions that require substantial resources 
and care. This care is provided or supervised by an RN. In the FY 2016 
final rule, we indicated that CMS was proposing changes to the LTC 
facility participation requirements to ensure that LTC facilities are 
providing quality and safe care to medically complex residents among 
others (81 FR 68688). We noted that not only has the acuity of the 
resident population generally increased, but there has also been a 
dramatic increase in the number of residents recovering from an acute 
episode of major surgery, injury, or illness (sub-acute resident 
population).
    Medicare payment policy has also contributed to higher acuity 
levels in LTC facilities. After Medicare implemented the prospective 
payment system for hospitals in 1983, there were shorter hospital stays 
for Medicare beneficiaries and increased funding for post-acute stays 
in LTC facilities (80 FR 42168, 42174-42175). This payment policy 
resulted in a growing sub-acute resident population in LTC facilities 
that would have previously experienced longer hospital stays. Also, 
with the increase in alternatives to LTC facilities, such as assisted-
living facilities and home care, LTC facilities are caring for more 
dependent residents who require more complex basic medical care and 
rehabilitative services. In addition, LTC facilities are caring for a 
significant number of residents with dementia, depression, or other 
behavioral health issues. LTC facilities today have even been referred 
to as ``mini-hospitals.'' \95\
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    \95\ Three challenges of long-term care (LTC) nursing. Health. 
Accessed at https://www.wolterskluwer.com/en/expert-insights/three-challenges-of-longterm-care-ltc-nursing. Published on May 5, 2015. 
Accessed on February 13, 2023.
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    While RNs and LPNs/LVNs appear to provide some similar nursing 
services, such as administering medications, there are crucial 
differences. Compared to LPNs and LVNs, RNs' scope of practice is 
broader and they receive more education.\96\ Most importantly, RNs 
practice independently and are qualified to conduct clinical nursing 
assessments, whereas LPNs and LVNs require an RN or a physician's 
supervision. This is a critical feature in the RN scope of practice 
given the higher acuity of today's LTC facility resident population and 
the need to properly clinically assess residents to ensure they are 
receiving the appropriate care. Also, it has been reported in the 
literature that LPN/LVNs may find themselves practicing outside their 
scope of practice when there is not sufficient RN staffing in a 
facility to provide direct or supervised resident care (80 FR 42168, 
42200). Thus, we are also proposing that the RN be available to provide 
direct resident care around the clock.
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    \96\ Jividen, S. RN vs. LPN. Nurse.org. Accessed at https://nurse.org/resources/rn-vs-lpn/. Published on July 15, 2021. Accessed 
on February 13, 2023.
---------------------------------------------------------------------------

    For several decades, studies and gray literature materials other 
than traditional research publications, such as opinion pieces, 
advocacy materials, and non-statistically rigorous research published 
by government agencies have recommended an RN onsite 24-7 in LTC 
facilities for similar reasons. As noted previously in this proposed 
rule, the 2022 NASEM report, recommended that LTC facilities have 24 
hours a day, 7 days a week RN onsite coverage. NASEM noted that most 
LTC facilities provide care for both short-term residents who require 
rehabilitation or subacute care and long-term care for residents. While 
the acuity of short-term residents would vary greatly depending upon 
their reason for admission and condition, NASEM noted that the long-
term care residents typically have multiple chronic conditions that 
require professional nursing surveillance to

[[Page 61372]]

monitor the residents for changes that might require hospitalization or 
potentially be life-threatening.\97\ As noted previously in this rule, 
it is the RN that has the education, training, and qualifications to 
conduct clinical nursing assessments. The report also suggested that 
there be additional RN coverage when needed and that the DON not be 
counted towards this requirement.
---------------------------------------------------------------------------

    \97\ FN #93, NASEM, p. 58.
---------------------------------------------------------------------------

    In the 2016 LTC facility final rule,\98\ we noted that several 
commenters, including the Center for Medicare Advocacy and the 
California Advocates for Nursing Home Reform, recommended that LTC 
facilities have 24-hours RN onsite coverage. These commenters argued 
that 24-hours RN coverage was necessary due to the increased acuity in 
residents and that expert nursing skill is needed to ``anticipate, 
identify and respond to changes in [a resident's] condition,'' as well 
as for the residents to have appropriate rehabilitation services and 
the best chance for being discharged home in a safe and timely manner 
(80 FR 68754). Other commenters noted that RN staffing was essential 
for safe and effective resident care.\99\ While we agreed with the 
commenters on the importance of staffing, and noted that due to their 
education and licensure, RNs possess the skills that are ``essential 
for timely assessment, intervention and treatment,\100\ we did not 
establish a minimum nursing staff standard at that time for the reasons 
noted in the 2016 final regulation. Instead, at Sec.  483.35, we 
finalized an approach that required the LTC facility to have sufficient 
nursing staff to assure safety and well-being of each resident as 
determined by resident assessments and individual plans of care and 
considering the number and acuity of diagnoses of the facility's 
resident population in accordance with the facility assessment required 
at Sec.  483.70(e). Among other reasons, we did not propose a 24-hour 
RN onsite requirement due to lack of sufficient data including PBJ 
System data. As discussed previously in this proposed rule, we did not 
yet have the data from the PBJ System or another reliable source upon 
which to base a minimum staffing requirement. We now also have the Abt 
study discussed above that demonstrated the importance of RNs to the 
quality-of-care residents receive. Others, including professional 
nursing organizations, also contended that the requirements should be 
focused on resident acuity and the competencies and skill sets of the 
nursing staff than a specific numerical requirement for categories of 
staff (80 FR 42168, 42200 and 42201). We were also concerned that some 
LTC facilities, especially those in rural and underserved areas, might 
find complying with such a requirement especially challenging (81 FR 
68694, 68752, 68755).
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    \98\ Medicare and Medicaid Programs; Report of Requirements for 
Long-Term Care Facilities. 81 FR 68688. Published on October 4, 
2016.
    \99\ FN #24, p. 68754.
    \100\ FN #24, p. 68754.
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    We also heard these same concerns reiterated in the FY 2023 SNF PPS 
RFI comments and the interested parties listening sessions discussed 
previously. These commenters noted that RNs, by the virtue of their 
education and training, have diagnostic and assessment skills that 
other types of nurse staff do not. They noted that LTC facilities have 
populations with the highest needs and complex medical issues and the 
availability of RNs for resident assessments is necessary and could 
prevent avoidable resident hospitalizations. Based on comments received 
in the FY 2023 SNF PPS RFI, NASEM's recommendations, and other gray and 
peer-reviewed literature, we propose that all LTC facilities must have 
an RN onsite 24 hours a day, 7 days a week at Sec.  483.35(b)(1).
    An existing statutory waiver for Medicare SNFs, set out at section 
1819(b)(4)(C)(ii) of the Act and implemented at Sec.  483.35(f), 
permits the Secretary to waive the requirements of Sec.  483.35(b) to 
provide the services of a RN for more than 40 hours a week, including 
the director of nursing. This waiver would still be in place for SNFs 
to pursue through the current waiver process. Facilities would also use 
this process to pursue a waiver of the 24 hours a day, 7 days a week 
requirement. However, we discuss certain criteria that may exempt a LTC 
facility (SNF or NF) from meeting the proposed HPRD levels for RNs and 
NAs specifically established in Sec.  483.35(a)(1)(i) and (ii) in 
section III.B.4 of this rule. We welcome comments regarding our 
proposed requirements for each LTC facility to have an RN on site 24 
hours a day, 7 days a week that is available for direct resident care.
    In addition to our proposed 24-hour, 7 days a week requirement for 
an RN, we continue to maintain a separate requirement for the DON. All 
LTC facilities must designate an RN to serve as the DON on a full-time 
basis (Sec.  483.35(b)(2)). The current rule stipulates that the DON 
can serve as a charge nurse only if the facility has an average daily 
occupancy of 60 or fewer residents (Sec.  483.35(b)(3)). Since the DON 
must be an RN, the DON is included in the proposed nurse minimum 
staffing requirements as an RN. All RNs with administrative duties, 
including the DON, should be available for direct resident care when 
needed. However, the DON, as well as other nurses with administrative 
duties, would probably have limited time to devote to direct resident 
care. We are concerned that for some LTC facilities having the DON as 
the only RN on site might be insufficient to provide safe and quality 
care to residents. This concern was also expressed in the NASEM 2022 
publication discussed previously, in which the NASEM recommended that 
the DON not be counted in the requirement for an RN 24 hours, 7 days a 
week.\101\ All comments regarding these questions will be reviewed and 
analyzed, including consideration for potential future rulemaking.
---------------------------------------------------------------------------

    \101\ National Academies of Sciences, Engineering, and Medicine. 
2022. The National Imperative to Improve Nursing Home Quality: 
Honoring Our Commitment to Residents, Families, and Staff, 
Recommendation 2B.
---------------------------------------------------------------------------

    We welcome comments on the following questions:
     Does your facility, or one you are aware of, have an RN 
onsite 24 hours a day, 7 days a week? If not, how does the facility 
ensure that staff with the appropriate skill sets and competencies are 
available to assess and provide care as needed?
     If a requirement for a 24 hour, 7 day a week onsite RN who 
is available to provide direct resident care does not seem feasible, 
could a requirement more feasibly be imposed for a RN to be 
``available'' for a certain number of hours during a 24 hour period to 
assess and provide necessary care or consultation provide safe care for 
residents? If so, under what circumstances and using what definition of 
``available''?
     Should the DON be counted towards the 24/7 RN requirement 
or should the DON only count in particular circumstances or with 
certain guardrails? Please explain why or why not.
     Are there alternative policy strategies that we should 
consider to address staffing supply issues such as nursing shortages?
2. Administration (Sec.  483.70)
    We believe that a comprehensive approach to establishing staffing 
requirements is necessary to ensure that facilities are making 
thoughtful, informed staffing plans and decisions to support the 
health, safety, and well-being of residents. In particular, we want to 
avoid unintended consequences of establishing a minimum nurse

[[Page 61373]]

staffing requirement that could lead to a regression by those 
facilities currently staffing above the staffing requirement or 
facilities only staffing at the minimum level proposed without 
considering whether resident acuity or resident census, requires 
additional staffing above that floor. It is our expectation that LTC 
facilities will consider their capabilities and capacity, as well as 
the number, acuity, and diagnoses of their residents when developing 
staffing schedules.
    As previously discussed, in 2016, we released a final rule that 
revised the requirements that LTC facilities must meet to participate 
in the Medicare and Medicaid Programs.\102\ As part of those revisions, 
we finalized revisions at Sec.  483.70(e), Administration, to require 
facilities to conduct, document, and annually review a facility-wide 
assessment to determine what resources are necessary to care for its 
residents competently during both day-to-day operations and 
emergencies. This facility-wide assessment requires LTC facilities to 
determine adequate staffing type and level based on the number of 
residents, resident acuity, range of diagnoses, the content of care 
plans, and other factors. LTC facilities are also required to address 
and document in their facility assessments their resident population 
(that is, number of residents, overall types of care and staff 
competencies required by residents, and cultural aspects), resources 
(for example, equipment, and overall personnel), and a facility-based 
and community-based risk assessment.
---------------------------------------------------------------------------

    \102\ https://www.federalregister.gov/documents/2016/10/04/2016-23503/medicare-and-medicaid-programs-reform-of-requirements-for-long-term-care-facilities.
---------------------------------------------------------------------------

    While we assumed when we finalized the 2016 rule that most LTC 
facilities already conducted some type of facility assessment of the 
resident population and resources required as part of their normal 
strategic planning, our revisions aimed to ensure that facilities had a 
formal process for consistently conducting and documenting these 
assessments and keeping them up-to-date. The formal facility assessment 
process requires facilities to make thoughtful, person-centered 
staffing plans and decisions focused on meeting resident needs that may 
help improve the safety of residents. We believe this approach will 
help facilities comply with the requirement to have sufficient staff, 
which is investigated during surveys.
    One of the goals of the 2016 revisions to the LTC facility 
participation requirements for health and safety was to ensure that our 
regulations align with current clinical practice and allow flexibility 
to accommodate multiple care delivery models to meet the needs of 
diverse populations that receive services in these facilities. As noted 
previously, given the limitations of the PBJ System data in 2016, we 
enacted a competency-based approach in the 2016 final rule, that 
focused on achieving the statutorily mandated outcome of ensuring that 
each resident is provided care that allows the resident to maintain or 
attain their highest practicable physical, mental, and psychosocial 
well-being. The facility assessment requirement was central to the 
revised 2016 LTC facility participation requirements, and was intended 
to be used by the facility for multiple purposes, including, but not 
limited to, determining adequate staffing and other resources, 
establishing a Quality Assurance and Performance Improvement (QAPI) 
program, and conducting emergency preparedness planning.
    Our expectation was that the application and development of the 
facility assessment requirement and competence-based staffing decisions 
would involve every service provided by a LTC facility and apply to all 
staff, including the interdisciplinary team. For example, a facility 
that provides dementia care would need to ensure that it has a 
sufficient number of staff with the necessary skill sets and 
competencies to care for individuals living with dementia. In addition, 
CMS intended for facilities to use the facility assessment as a 
resource and planning tool for both short-term (day-to-day) and long-
term (strategic) purposes.
    As part of the FY2023 SNF PPS proposed rule, we sought public input 
on how the facility assessment requirement should impact the minimum 
staffing requirement (87 FR 22720). Many commenters suggested that the 
facility assessment requirement should be used to complement the 
minimum staffing requirement and to determine any additional nursing 
staff that the facility needs, based on the acuity and needs of its 
resident population. Other commenters shared concerns that the Federal 
regulations established in 2016 requiring nursing homes to conduct a 
facility self-assessment have never been adequately enforced or 
surveyed.
    As discussed earlier in this proposed rule, the recent 2022 Nursing 
Home Staffing Study \103\ included in-person interviews and surveys 
with facility leadership, direct care staff, and residents and their 
family members to better understand the relationship among nurse 
staffing levels, staffing mix, and the safety and quality of resident 
care. During interviews, staff respondents (RNs, LPNs, NAs) were asked 
to identify the number of residents that they could provide with 
quality and safe care and to recommend minimum staffing requirements.
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    \103\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare 
and Medicaid Services https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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Respondents consistently noted that resident acuity was more important 
than the actual number of assigned residents in determining whether 
they could provide quality and safe care based on their staffing 
assignments. Some respondents suggested minimum staffing requirements 
in terms of the number of residents per shift/unit, accounting for 
acuity, that they could safely manage and reported that their usual 
shift/unit is frequently short-staffed. Some respondents also reported 
concerns about a potential minimum staffing requirement being set too 
low, fearing that administrators will understaff shifts, or that the 
minimum will become the maximum.
    Furthermore, we share the concern that there may be facilities who 
currently exceed the proposed minimum staffing level and could 
potentially be perversely incentivized to lower their staffing levels 
to the required minimum staffing levels, rather than continuing to 
staff above that level to meet the unique care needs of their 
residents. Therefore, we underscore that in addition to meeting the 
proposed minimum staffing levels, the facility assessment must continue 
to be used to determine the necessary resources and staff that the 
facility requires to care for its residents, regardless of whether or 
not the facility is staffed at or above the new minimum staffing 
requirement. Furthermore, we emphasize that a LTC facility's staffing 
decisions should be based on the specific needs of its resident 
population and not motivated by cost-savings. Thus, while each LTC 
facility must comply with the minimum nurse staffing requirements set 
forth at Sec.  483.35(a), unless the facility qualifies for a hardship 
exemption under Sec.  483.35(g), the facility must also provide 
sufficient staff (RNs, licensed nurses, and NAs) to provide nursing 
care to all residents in accordance with the residents' assessments and 
individual care plans (Sec.  483.35--introductory statement). Lastly, 
we note that this proposed rule is not intended to, and would not 
preempt the applicability of any State or local law providing a higher 
standard (in this case, a higher HPRD ratio or an RN

[[Page 61374]]

coverage requirement in excess of one RN on site 24-hours per day, 7 
days a week) than would be required by these proposed rules. To the 
extent Federal standards exceed State and local minimum staffing 
standards, no Federal pre-emption is implicated because facilities 
complying with Federal law would also be in compliance with State law. 
We are not aware of any State or local law providing for a maximum 
staffing level. However, we note that this proposed rule is intended to 
and would preempt the applicability of any State or local law providing 
for a maximum staffing level, to the extent that such a State or local 
maximum staffing level would prohibit a Medicare and Medicaid certified 
LTC facility from meeting the minimum HPRD ratios and RN coverage 
levels proposed in this rule.
    To ensure that facilities are utilizing the facility assessment as 
intended, we are proposing to redesignate the existing requirements for 
the facility assessment to its own standalone section from Sec.  
483.70(e) to proposed Sec.  483.71. We note that we are also proposing 
technical changes throughout the CFR to replace references to Sec.  
483.70(e) with Sec.  483.71 based on this proposed change. Given the 
importance of the facility assessment requirement and the multiple 
program ways in which the assessment may be used to inform a facility's 
decision-making and planning, we believe that the requirements should 
be set out as a standalone section rather than in the Administration 
section. In addition, while the responsibility to implement and utilize 
the facility assessment to inform facility operations belongs to the 
facility's administrator and governing body, we acknowledge that a 
multitude of facility leadership and management contribute to the 
development of the assessment given its importance and broad 
applicability.
    In addition to redesignating (this is, relocating or moving) the 
existing requirements to a standalone section, we are also proposing 
clarifications throughout the section to further specify what the 
facility assessment must be used for. We propose to redesignate the 
stem statement for current Sec.  483.70(e) to the stem statement for 
proposed Sec.  483.71. Existing paragraphs Sec.  483.70(e)(1) through 
(3) identify the key elements of the facility assessment and specify 
the considerations that the assessment must account for, including the 
facility's resident population, resources, and the facility and 
community-based risk assessment which is required to complete as part 
of the facility's emergency planning. This includes using their 
assessment of resident needs to determine the competencies and skill 
sets their staff needs to provide safe and quality care for the 
residents. The LTC facility should also use the information from the 
facility assessment to determine their training needs for its staff. We 
propose to redesignate Sec.  483.70(e)(1) through (3) as proposed Sec.  
483.71(a)(1) through (3), respectively. We note the discussion of the 
proposed revisions follows the organization of the requirements as 
presented in the new standalone section we are proposing at Sec.  
483.71.
    At new paragraph Sec.  483.71(a)(1)(ii), we propose to clarify that 
facilities would have to address in the facility assessment details of 
its resident population, including the care required by the resident 
population, using evidence-based, data driven methods that consider the 
types of diseases, conditions, physical and behavioral health issues, 
cognitive disabilities, overall acuity, and other pertinent facts that 
are present within that population, consistent with and informed by 
individual resident assessments as required under existing Sec.  483.20 
``Resident Assessment.''. Specifically, we propose to revise this 
paragraph by specifying the ``use of evidence-based, data driven 
methods'' and create a link to the requirements for the resident 
assessment. Facilities are expected to update their facility assessment 
as needed, no less than annually, using evidence-based, data-driven 
methods, that consider the needs of their residents and the 
competencies of their staff. For example, facilities need to be able to 
describe residents' acuity levels in order to understand the care and 
services required, and we would expect that they refer to data sources 
such as the resident assessments; comprehensive care plans; MDS; RUG-IV 
categories, if available; or, other resident acuity tools. Assessing 
acuity levels and effectively using MDS and discharge planning are also 
an important part of ensuring that an individual can return to the 
community whenever possible in the least restrictive environment.
    In addition, existing regulations at Sec.  483.40 require LTC 
facilities to provide each resident with the necessary behavioral 
health care and services for the resident to attain or maintain the 
highest practicable physical, mental, and psychosocial well-being, in 
accordance with his or her comprehensive assessment and plan of care. 
Hence, we also propose to revise this paragraph to add ``behavioral 
health issues'' to clarify that LTC facilities must consider their 
residents' physical and behavioral health issues. We are also concerned 
with issues of inaccurate MDS coding of residents with a diagnosis of 
schizophrenia and are taking action to reduce the inappropriate use of 
antipsychotics without clinical indication in nursing homes.\104\ 
Therefore, we believe these revisions are necessary to ensure that 
facilities are providing residents with appropriate services and care 
for behavioral health. At new Sec.  483.71(a)(1)(iii), we propose to 
add ``and skill sets'' so the requirement reads, ``(iii) The staff 
competencies and skill sets that are necessary to provide the level and 
types of care needed for the resident population.'' At new Sec.  
483.71(a)(3), we propose to add a cross-reference to the existing 
requirements for facilities to conduct a facility and community-based 
risk assessment as part of their emergency planning resources.
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    \104\ https://www.cms.gov/files/document/qso-23-05-nh.pdf.
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    At new Sec.  483.71(a)(4), we propose to require facilities to 
include the input of facility staff, including but not limited to 
categories such as nursing home leadership, management, direct care 
staff and their representatives, and staff providing other services. A 
comprehensive assessment of what resources are required for a LTC 
facility to provide safe care for its resident population requires the 
input from facility staff familiar with all of its essential services. 
Nursing staff working in facilities can provide information to facility 
management regarding their caseload and how many residents they believe 
they can safely provide quality care to on a daily basis. Nursing staff 
are also familiar with the unique needs of their resident population 
and can speak to the staffing needs at both a shift and unit level.
    In addition, direct care employee representation in the facility 
assessment is critically important to securing an accurate analysis of 
staffing needs required to ensure resident health and safety. Direct 
care employees and their representatives are uniquely positioned to 
assess and communicate what staffing competencies and levels, as well 
as equipment and other resources are needed to provide appropriate 
care. These individuals have a unique understanding of the resident 
population's health needs because of their on-the-ground knowledge of 
residents' care needs and facility operations. As examples, direct care 
employees have distinct perspectives into what additional training is 
needed to manage increased acuity in resident

[[Page 61375]]

needs; what ethnic, cultural, and religious factors are critical to the 
provision of culturally competent resident care; and how health 
information technology may be better leveraged to deliver consistent, 
quality care according to resident preferences.
    Input into the facility assessment from any authorized 
representatives of direct care employees serves several important 
functions. Such representatives may sometimes be better positioned to 
directly communicate about facility conditions and the needs of the 
resident population on behalf of direct care employees who may fear 
retaliation from their employer. There may also be circumstances where 
direct care employees are not fluent in English or not familiar with 
translating observations into resource categories and want a trusted 
representative to enable open and effective communication in the 
facility assessment. Alongside direct care employees, their 
representatives may also help ensure facility assessments are up-to-
date and used to inform facility staffing.
    Representatives of direct care employees may take different forms. 
One scenario of representation may involve union workplaces where 
employees have designated a union representative, such as an employee 
or third-party elected local union representative, business agent, or 
safety and health specialist. Representation may also arise in 
workplaces without collective bargaining agreements where at least one 
employee or a subset of employees have designated a representative from 
amongst themselves or a third-party worker advocacy group, community 
organization, local safety organization, or labor union to serve as 
their representative in a facility assessment. For example, employees 
may choose to authorize a union safety and health specialist to help 
compile staff observations regarding unmet training needs or 
communicate safety concerns regarding outdated medical equipment, which 
they may not otherwise feel comfortable sharing as part of their direct 
reflections on resident needs.
    These benefits of enabling the participation of direct employee 
representatives are consistent with the demonstrated positive 
association between union representation and resident well-being. 
According to a recent study, resident mortality and worker infection 
rates were lower in nursing homes with union representation compared to 
those without; specifically, the study found unions were associated 
with 10.8 percent lower resident COVID-19 mortality rates and 6.8 
percent lower worker infection rates.\105\ We are soliciting public 
comments on additional studies and data that demonstrate the benefits 
of the participation of direct employee representatives in the facility 
assessment process.
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    \105\ Dean, A., McCallum, J. et al. Resident Mortality And 
Worker Infection Rates From COVID-19 Lower In Union Than Nonunion US 
Nursing Homes, 2020-21. April 20, 2022. https://doi.org/10.1377/hlthaff.2021.01687.
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    Other staff, including but not limited to those in food and 
nutrition, pharmacy, and facility services, could provide vital 
information on essential services and resources required to care for 
the resident population. If the LTC facility provides other services 
including but not limited to physical therapy or dialysis, it should 
include input from staff familiar with these services as well. A 
comprehensive assessment of what resources are required for a LTC 
facility to provide safe care for its resident population requires the 
input from facility staff familiar with all of its essential services. 
We encourage LTC facilities to include the input of not only those 
personnel from the specifically mentioned areas in the proposed 
requirement, but also of staff from all areas and their representatives 
that provide essential services or resources for residents. We request 
comments on the operational challenges or burdens of this provision as 
well as how CMS can best provide oversight of this proposed 
requirement.
    We propose at new Sec.  483.71(b)(1) to require facilities to use 
the facility assessment to inform staffing decisions to ensure 
appropriate staff are available with the necessary competencies and 
skill sets necessary to care for its residents' needs as identified 
through resident assessments and plans of care as required in Sec.  
483.35(a)(3). This requirement will help to address some outstanding 
concerns due to limitations in the PBJ System. While PBJ System data 
has allowed for additional insight into the staffing levels of 
facilities, there remain some limitations as to what that data can tell 
us regarding how facilities are staffed. For example, PBJ System data 
cannot give us insight into how different resident units are staffed. 
There are some units in LTC facilities that require higher levels of 
care based upon the resident acuity, such as memory care or ventilator 
units. PBJ System data also does not provide information regarding how 
different shifts are staffed within a LTC facility. The Government 
Accountability Office, HHS, and OIG have raised concerns related to 
inadequate staffing in LTC facilities on the weekends and at 
night.106 107 The new requirement at Sec.  483.71(b)(1) will 
help address that.
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    \106\ Additional Reporting on Key Staffing Information and 
Stronger Payment Incentives Needed for Skilled Nursing Facilities, 
July 2021, GAO-21-408, https://www.gao.gov/assets/gao-21-408.pdf.
    \107\ CMS Use of Data on Nursing Home Staffing: Progress and 
Opportunities To Do More, March 2021, OEI-04-18-00451, https://oig.hhs.gov/oei/reports/OEI-04-18-00451.asp.
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    In addition, we propose at new Sec.  483.71(b)(2) to require 
facilities to use the facility assessment to assess the specific needs 
for each resident unit in the facility, and to adjust as necessary 
based on any significant changes in the resident population. Facilities 
would also be required, at new Sec.  483.71(b)(3), to consider the 
specific staffing needs for each shift, such as day, evening, night, 
weekends, and to adjust as necessary based on any significant changes 
to the resident population.
    We propose at new Sec.  483.71(b)(4) that LTC facilities would have 
to use their facility assessment to develop and maintain a staffing 
plan to maximize recruitment and retention of nursing staff. This 
staffing plan requirement is consistent with the aims President Biden 
articulated in the April 2023 ``Executive Order on Increasing Access to 
High-Quality Care and Supporting Caregivers''.\108\ That E.O. directs 
the Secretary of HHS to consider actions to encourage LTC facilities to 
reduce nursing staff turnover.\109\ This action may help improve 
quality in LTC facilities since literature evidence suggests that 
decreases in quality are associated with even a low-to-moderate 
increase in RN turnover.\110\ This E.O. also directs the Secretary to 
consider additional actions to improve retention of nursing staff by 
advancing efforts to measure and adjust payments based on staff 
turnover.\111\ For LTC facilities to not only comply with both the 
current and proposed staffing requirements in this rule but also to 
achieve the E.O.'s goal of increasing access to higher quality care for 
LTC facility residents and supporting LTC facility nursing staff, it 
would be necessary for these facilities to be able to recruit and 
retain

[[Page 61376]]

sufficient numbers of nursing staff with the appropriate education, 
training, competencies, and skill sets. To meet these objectives, we 
believe LTC facilities would need a staffing plan to address staff 
turnover and consider ways to support staff retention. We have not 
specified how the staffing plan should be developed or what it must 
contain because we believe that LTC facilities should have flexibility 
in developing these plans. However, we encourage LTC facilities to 
assess the compensation package the facility offers its direct care 
staff as part of developing the staffing plan. We request comments on 
the operational challenges or burdens of this provision, as well as how 
CMS can best provide oversight of this proposed requirement.
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    \108\ Executive Order on Increasing Access to High-Quality Care 
and Supporting Caregivers. White House. Accessed at https://www.whitehouse.gov/briefing-room/presidential-actions/2023/04/18/executive-order-on-increasing-access-to-high-quality-care-and-supporting-caregivers/. Published on April 18, 2023. Accessed on 
April 19, 2023.
    \109\ FN #107, Section 2(b)(ii).
    \110\ Castle, Nicholas G, and John Engberg. ``Staff turnover and 
quality of care in nursing homes.'' Medical care vol. 43,6 (2005): 
616-26. doi:10.1097/01.mlr.0000163661.67170.b9.
    \111\ FN #107, Section 2(b)(ii).
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    We are aware that the COVID-19 PHE has had an impact on the 
availability of nursing staff in many States, with more facilities 
needing to use temporary staffing agencies to fill positions, and we 
want to ensure that facilities have a plan in place should staffing 
shortages impact their ability to safely provide care to their 
residents. At proposed Sec.  483.71(b)(5), we are proposing to require 
facilities to use the facility assessment to inform contingency 
planning for events that do not require the activation of the 
facility's emergency plan but do have the potential to impact resident 
care. For example, facilities should have a contingency plan in place 
in the event that there is unavailability of direct care nursing staff 
or other resources needed for resident care.
    In summary, we note that the facility assessment works in 
conjunction with the minimum nursing staff requirements proposed in 
Sec.  483.35. While we propose to require all LTC facilities (subject 
to exemptions) to comply with the minimum nursing staffing requirements 
as set forth at Sec.  483.35(a), those minimum standards are only the 
beginning. By conducting the facility assessment, the facility will be 
able to determine what is sufficient staffing, as required by Sec.  
483.35(a), for its resident population. The facility assessment will 
determine not only the sufficient number of staff, but also what 
competencies and skill sets that staff needs to provide safe care for 
the resident population. Thus, we emphasize that all LTC facilities 
must comply with the nursing staff minimums; however, these minimums 
alone are not targets nor a safe harbor, and facilities may need to 
staff above the minimum requirements proposed in this rule to satisfy 
the requirement for sufficient staffing. Conducting the facility 
assessment will determine not only the number of staff but also the 
competencies and skill sets that staff must possess to provide safe and 
high-quality care for the facility's resident population as identified 
through resident assessments and plans of care as required in existing 
Sec.  483.35(a)(3).
3. Hardship Exemption From the Minimum Hours per Resident Day 
Requirements for RNs and NAs
    As noted earlier, we are proposing a hardship exemption to the HPRD 
requirements portion of the minimum staffing standards. The exemption 
would apply only to the RN and/or NA HPRD requirements and is separate 
and distinct from existing the existing statutory waiver process that 
addresses, in particular, overarching RN staffing requirements. While 
we acknowledge the potential for overlap between the exemption and the 
waiver (that is, a 24/7 RN may meet the HPRD requirement), each of the 
minimum staffing requirements independently supports resident health 
and safety. Therefore, meeting the 24/7 requirement does not also count 
as meeting the 0.55 RN HPRD and 2.45 NA HPRD and vice versa. 
Specifically, as discussed elsewhere in this rule, the presence of an 
RN in a LTC facility on a 24-hour basis improves overall quality of 
care. Similarly, but separately, a minimum number of RN and NA hours 
per resident per day improve overall quality of care. Both 
independently and collaboratively, these requirements support meeting 
statutory mandates to provide services to attain or maintain the 
highest practicable physical, mental, and psychosocial well-being of 
each resident, in accordance with a written plan of care. Both the 
exemptions and the waiver are discussed in more detail below.
    We fully expect that LTC facilities will be able to comply with our 
proposed standards for nursing staff. However, we recognize that some 
interested parties have expressed that, in some instances, external 
circumstances may prevent a LTC facility from meeting our proposed 
minimum staffing requirements, despite the LTC facility's best efforts. 
We note, for example, that the COVID-19 PHE exacerbated workforce 
unavailability issues for some LTC facilities. Some LTC facilities may 
be challenged in hiring and retaining nursing staff such as registered 
nurses and certified nursing assistants due to local workforce 
unavailability, while others may need to improve pay and job quality in 
order to attract and retain staff, given competition from higher-paying 
positions or alternate career paths. A 2020 Assistant Secretary for 
Planning and Evaluation (ASPE) Report found that the COVID-19 PHE 
contributed to staffing shortages and health care worker attrition, 
pushing nursing homes to create and implement new recruitment 
infrastructures, increase wages, and augment benefits to retain 
staff.\112\ As noted in the FY 2023 SNF PPS RFI comments and by 
interested parties during the CMS hosted listening sessions previously 
discussed, there is concern from LTC trade associations about whether 
there is adequate staffing available to meet resident needs and about 
the feasibility of increasing staffing over a short timeframe given 
workforce and cost considerations. LTC facility staff interviewees who 
were part of the qualitative portion of the 2022 Nursing Home Staffing 
Study \113\ also shared concerns about unintended consequences of 
requiring minimum staffing levels, with fears that some nursing homes 
could be forced to close if they cannot come into compliance with the 
minimum requirements.
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    \112\ COVID-19 Intensifies Nursing Home Workforce Challenge, 
Danny-Brown et al., 2020.
    \113\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare 
and Medicaid Services https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
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    According to the Bureau of Labor Statistics (BLS), in March 2020, 
there were 3,372,000 health care staff working in nursing homes and 
other LTC facilities. This dropped to a low of 2,961,200 in January 
2022, a loss of 410,000 staff. This is rebounding, as of June 2023 
there are roughly 235,900 fewer health care staff working in nursing 
homes and other LTC facilities compared to March of 2020.\114\ The 
decline in staff coincided with decreasing LTC facility census 
beginning in March 2020, as noted below. A January 2023 AHCA/NCAL 
Report analyzing BLS data notes that other health care sectors 
(Physician Offices, Outpatient settings, Home Health, and Hospitals) 
rebounded more quickly than the nursing home sector. This difference in 
return to employment may have been driven by the comparatively low pay 
and difficult working conditions for nursing home workers.\115\ 
Commenters to the FY 2023

[[Page 61377]]

SNF PPS RFI noted concerns such as, ``We are losing many long-term 
employees to jobs with better salaries and many of these jobs are not 
in healthcare. New hires are demanding a higher starting salary as well 
as large sign on bonuses.'' Several labor and consumer advocacy groups 
noted competitive wages as a driving factor in staff retention/
recruitment. Based on our estimations detailed in section VI. 
(Regulatory Impact Analysis), of this rule, we expect that a total of 
12,639 additional RNs and 76,376 additional NAs will be needed to meet 
our proposed HPRD requirements, before accounting for any exemptions. 
In particular, we recognize that lower staffed nursing homes are more 
likely to be for-profit, larger, rural, and have a higher share of 
Medicaid residents.\116\ Some recent developments, however, should ease 
staffing difficulties at LTC facilities. According to BLS data, as of 
January 2022, the number of LTC facility staff has begun to rebound. 
The number of health care staff working in nursing homes and other LTC 
facilities as of June 2023 is 3,136,100, with preliminary data 
indicating continued rebound.\117\ Furthermore, beginning in March 
2020, facility census declined. By the end of September 2020, nursing 
home census had declined by an average of nine residents per nursing 
home, going from an average of 86 residents in January 2020 to 77 
residents in September 2020.\118\
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    \114\ Bureau of Labor Statistics. https://data.bls.gov/timeseries/CES6562300001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true. Accessed 08/09/2023.https://data.bls.gov/timeseries/CES6562300001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true. Accessed 08/09/2023.
    \115\ https://www.ahcancal.org/News-and-Communications/Fact-Sheets/FactSheets/LTC-Jobs-Report-Jan2023.pdf.
    \116\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Report prepared for the Centers for Medicare 
and Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
    \117\ Employment, Hours, and Earnings from the Current 
Employment Statistics survey (National) https://data.bls.gov/timeseries/CES6562300001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true Accessed 08/09/2023.
    \118\ Nursing Home Nurse Staff Hours Declined Notably during the 
COVID-19 Pandemic, with CNAs Experiencing the Largest Decreases 
Issue Brief (hhs.gov), https://aspe.hhs.gov/sites/default/files/documents/95b3a0f6294c7bb021cfbdc245cd9820/nh-nurse-staff-hours-brief.pdf.
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    We recognize that LTC facility workers--disproportionately women of 
color--are among the lowest-paid in the country and often have to rely 
on public benefits despite working complex and demanding jobs. In 
addition, poor working conditions in LTC facilities have been found to 
influence the quality of care provided to residents.\119\ Investments 
in the care workforce, including competitive wages, are foundational to 
helping to retain LTC facility workers and improving health and 
educational outcomes. Unfortunately, lack of transparency regarding 
nursing home finances, operations, and ownership impedes the ability to 
fully understand how current resources are allocated.\120\ This 
obscures evaluation of the industry's ability to absorb the costs of 
increased staffing and improved working conditions. It is the policy of 
the Biden-Harris Administration to ensure that the LTC workforce is 
supported, valued, and well-paid. Indeed, as previously noted, on April 
18, 2023, President Biden issued an E.O. on Increasing Access to High 
Quality Care and Supporting Caregivers. Section 2 of that E.O. 
addresses Increasing Compensation and Improving Job Quality for Family 
Caregivers, Early Educators, and Long-Term Care Workers.\121\
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    \119\ Perruchoud, Elodie et al. ``The Impact of Nursing Staffs' 
Working Conditions on the Quality of Care Received by Older Adults 
in Long-Term Residential Care Facilities: A Systematic Review of 
Interventional and Observational Studies.'' Geriatrics (Basel, 
Switzerland) vol. 7,1 6. 28 Dec. 2021, doi:10.3390/
geriatrics7010006.
    \120\ National Academies of Sciences, Engineering, and Medicine; 
Health and Medicine Division; Board on Health Care Services; 
Committee on the Quality of Care in Nursing Homes. The National 
Imperative to Improve Nursing Home Quality: Honoring Our Commitment 
to Residents, Families, and Staff. Washington (DC): National 
Academies Press (US); 2022 Apr 6. Summary. Available from: https://www.ncbi.nlm.nih.gov/books/NBK584660/.
    \121\ https://www.whitehouse.gov/briefing-room/presidential-actions/2023/04/18/executive-order-on-increasing-access-to-high-quality-care-and-supporting-caregivers/.
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    To improve working conditions and job quality in federally-funded 
LTC facility programs, we are encouraging providers to establish 
incentives to recruit and retain LTC facility workers, help prevent 
burnout, make it as easy as possible for LTC facility workers to access 
behavioral health services, and improve the care that individuals 
receive. The considerations described above, ranging from workforce 
issues exacerbated by the COVID-19 pandemic, to persistently low wages 
and benefits, and poor working conditions for the direct care 
workforce, have informed our approach to the proposed minimum staffing 
standards, including the 0.55 RN and 2.45 NA HPRD requirements and the 
proposed exemptions.
    The goal of the proposed minimum nursing staffing requirement is to 
ensure that residents receive safe and high-quality care. It is our 
intention to balance this goal with the need to ensure access to care, 
which is an important health and safety consideration. Therefore, CMS 
is proposing a hardship exemption to the minimum staffing standards, 
either the 0.55 RN or the 2.45 NA HPRD requirements, or both, proposed 
at Sec.  483.35(a)(1)(i) and (ii). These proposed exemptions will help 
to address the current workforce constraints in certain jurisdictions 
and other potential barriers that some LTC facilities may be 
experiencing in the wake of the COVID-19 PHE, and to ensure that our 
proposals do not unintentionally create access issues. Specifically, we 
propose to re-designate the existing requirements for nurse staffing 
information at existing Sec.  483.35(g) to a new paragraph (h). We 
propose at new Sec.  483.35(g) to allow LTC facilities with a 
verifiable hardship that precludes the LTC facility from achieving or 
maintaining compliance to be exempt from one or both of the proposed 
requirements at Sec.  483.35(a)(1)(i) and (a)(1)(ii). Given the complex 
health needs of LTC residents, to protect resident health and safety, 
we believe that it is important for exempted LTC facilities to maintain 
compliance with the 24/7 RN requirement as there are longstanding 
concerns related to low staffing levels in LTC facilities on weekends 
and evenings and ongoing RN presence is needed to provide care and 
monitor resident health. That requirement may be waived only through 
the waiver process implemented at Sec.  483.35(f) and described below.
    In developing our proposed minimum standards for nurse staffing, we 
recognized that sections 1819(b)(4)(C)(ii) and 1919(b)(4)(C)(ii) of the 
Act established a waiver process for RN/licensed nurse staffing in LTC 
facilities. We therefore considered whether or not a similar mechanism 
would be appropriate for minimum HPRD requirements. We determined, in 
the same spirit as the existing waiver process, to propose exemptions 
intended to address underlying workforce unavailability concerns, 
especially in rural and other underserved areas, while balancing the 
need for efforts by LTC facilities to recruit staff and improve quality 
of care. While allowing for these exemptions, we note that each LTC 
facility must still comply with its statutory and regulatory 
obligations to have sufficient staff to assure resident safety, and to 
attain or maintain the highest practicable physical, mental, and 
psychosocial well-being of each resident.
    These exemptions, while serving a similar purpose, differ from, but 
are not inconsistent with the waiver for RN and licensed nurse staffing 
under sections 1819(b)(4)(C)(ii) and 1919(b)(4)(C)(ii) of the Act. The 
waiver provisions are implemented at Sec.  483.35 (e) and (f). The 
proposed exemptions will be located at Sec.  483.35(g). We emphasize 
that the exemptions apply only to the

[[Page 61378]]

requirements at Sec.  483.35(a)(1)(i) and (ii) for LTC facilities to 
meet minimum HPRD staffing requirements for RNs and NAs, while the 
statutory waiver applies specifically to either RN or licensed nurse 
services more broadly. Both take into consideration ensuring staff 
sufficiency to achieve resident safety and well-being, but will be 
different processes.
    The proposed exemption process would be implemented with as little 
administrative burden on LTC facilities as possible, while also 
limiting opportunities for inappropriate granting of exemptions; it 
would also ensure that we are aware of the staffing status of the LTC 
facility. To obtain an exemption, a LTC facility must demonstrate that 
it has been unable to recruit appropriate personnel. In addition, the 
facility remains obligated to ensure the health and safety of facility 
residents. Therefore, prior to being granted an exemption, the LTC 
facility must be surveyed to assess the health and safety of the 
residents. If a LTC facility is found noncompliant with the minimum 
staffing requirements and does not meet the exclusionary criteria 
discussed below, the LTC facility's documentation of a good faith 
effort to hire and retain staff and the LTC facility's documentation of 
financial commitment must be submitted to CMS. If a LTC facility meets 
the exclusionary criteria, it will not be considered for an exemption. 
Such criteria include that the LTC facility must not have failed to 
submit PBJ System data in accordance with re-designated Sec.  
483.70(p), must not be an SFF facility, and must not have been cited by 
us as having ``widespread'' or ``a pattern of insufficient staffing 
with resultant resident harm'' or at an ``Immediate Jeopardy to 
resident health and safety'' level of severity with respect to 
understaffing within the 12 months preceding the survey during which 
the facility's non-compliance is identified. We note that the 
exemptions do not have a separate requirement for the availability of 
an RN or physician for immediate response, as the exemptions do not 
relieve the LTC facility of its obligation to have 24/7 RN presence. If 
a LTC facility were to obtain a waiver of RN/licensed nurse staffing 
through the existing waiver process, the LTC facility would provide 
assurances related to having necessary staff availability, among other 
assurances, as part of that process to obtain such a waiver. We intend 
to make publicly available information on LTC facilities that have an 
exemption to the minimum staffing requirements, to assist residents and 
families in choosing a LTC facility.
    To qualify for a hardship exemption, we are proposing that LTC 
facilities must meet all of the criteria specified at Sec.  
483.35(g)(1) through (4). Those criteria include:
    1. Location (proposed Sec.  483.35(g)(1)): To meet the criterion 
for location, a LTC facility must either be located:
    a. In an area where the supply of the applicable health care staff 
(either RN, or NA, or both) is not sufficient to meet geographic area 
needs as evidenced by either a medium (that is, 20 percent below the 
national average) or low (that is, 40 percent below national average) 
provider-population ratio for nursing workforce (Sec.  
483.35(g)(1)(i)), as calculated by us, currently by using Bureau of 
Labor Statistics and Census Bureau data, or
    b. Twenty miles or more from the next closest LTC facility, as 
determined by CMS (Sec.  483.35(g)(1)(ii)).
    2. Demonstrated Good Faith Effort to Hire and Retain Staff 
(proposed Sec.  483.35(g)(2)): To meet the criterion for demonstrated 
good faith effort to hire and retain nursing staff, a LTC facility must 
be surveyed and cited as noncompliant with the minimum staffing 
requirements, while not meeting the exclusionary criteria in section 4. 
To meet this good faith effort criterion, a LTC facility must have 
developed and implemented a recruitment and retention plan, as required 
at proposed Sec.  483.71(b)(5), and must demonstrate that it has been 
unable, despite diligent efforts including offering prevailing wages, 
to recruit and retain appropriate nursing staff including NAs. The LTC 
facility must document recruitment efforts. Such documentation is 
expected to include job listings in commonly used recruitment forums 
found online, at American Job Centers (coordinated by the U.S. 
Department of Labor's Employment and Training Administration), and 
other forums as appropriate (Sec.  483.35(g)(2)(i)), job vacancies 
including the number and duration of vacancies, and offers made (Sec.  
483.35(g)(2)(ii)). The documentation must show that offers are made at 
prevailing wages or better, as reflected by looking at data on the 
average wages in the Metropolitan Statistical Area in which the LTC 
facility is located, and vacancies by industry as reported by the 
Bureau of Labor Statistics or by the State's Department of Labor (Sec.  
483.35(g)(2)(iii)). This look-back would occur for the time period 
following when the vacancies occurred. Generally, we would expect that 
to be a 4- to 6-month period, but could encompass the full year, based 
on circumstances around the vacancies. Finally, the documentation must 
include the LTC facility's staffing plan in accordance with proposed 
Sec.  483.71(b)(4).
    3. Demonstrated Financial Commitment (proposed Sec.  483.35(g)(3)): 
To meet the criterion for financial commitment, a LTC facility must be 
surveyed and cited as noncompliant with the minimum staffing 
requirements, while not meeting the exclusionary criteria in section 4. 
Once a finding of noncompliance has occurred, the LTC facility must 
demonstrate through documentation the financial resources that the LTC 
facility expends annually on nurse staffing relative to revenue.
    4. Exclusions. LTC Facilities must not have failed to submit PBJ 
System data in accordance with re-designated Sec.  483.70(p), must not 
have been determined by us to be an SFF facility, and must not have 
been cited by us as having ``widespread insufficient staffing with 
resultant resident harm'' or ``a pattern of insufficient staffing with 
resultant resident harm'', or at an ``Immediate Jeopardy to resident 
health and safety'' level of severity with respect to understaffing 
within the 12 months preceding the survey during which the facility's 
non-compliance is identified.
    With respect to location, we are proposing that LTC facilities meet 
one of two distinct sub criterion to qualify for an exemption. If an 
LTC meets one of those criteria, they would then be evaluated for 
fulfilling the remaining criteria listed above.
    The first sub criterion applies to LTC facilities that are located 
in a geographical area that has a shortage of RNs and/or NAs. We define 
the geographical area as the metropolitan statistical area (MSA) or 
non-metropolitan statistical area (non-MSA) where the LTC facility is 
located using data from the U.S. Bureau of Labor Statistics (available 
at https://www.bls.gov/oes/current/msa_def.htm). We determine that 
there is a ``shortage'' when the MSA or non-MSA has a RN and/or NA to 
population ratio that is 20 percent below the national average. We 
provide the definitions of both medium and low provider to population 
ratio to facilitate comment on the appropriate level to use.
    To calculate whether a LTC facility is in an area with a shortage 
of RNs or NAs, we first use the Care Compare data to identify the State 
and county where each LTC facility is located. We then combine these 
data with information from the U.S. Bureau of Labor Statistics 
(available at https://www.bls.gov/oes/

[[Page 61379]]

current/msa_def.htm) on the counties in each MSA and non-MSA to 
identify the MSA or non-MSA where each LTC facility is located. Next, 
we identify the total number of RNs and NAs in each MSA and non-MSA 
using the Bureau of Labor Statistic's Occupational Employment and Wage 
Statistics Query System (available at https://data.bls.gov/oes/#/home). 
Afterwards, we calculate the population for each MSA or non-MSA using 
population estimates from the United States Census Bureau by summing 
the population for all counties in the MSA or non-MSA (available at 
https://www.census.gov/data/tables/time-series/demo/popest/2020s-counties-total.html#v2022).
    Finally, we calculate whether the LTC facility is located in an MSA 
or a non-MSA with a medium or low provider-to-population ratio by 
comparing the area's provider-to-population ratio to the average 
provider-to-population ratio for the United States.
    The second location sub criterion is distance to the next closest 
LTC facility. We are proposing this alternative distance criterion to 
address potential workforce unavailability within an MSA or non-MSA 
that overall has adequate workforce availability, but may have pockets 
within it that are experiencing shortages. We note that MSA and non 
MSA's may be quite large--for example, one MSA extends from Arlington, 
VA to West Virginia. Particularly for NAs, the availability, or lack 
thereof, of public transportation in some areas, and the costs and 
availability of private transportation can make long work commutes 
unfeasible. We also recognize there may be access to care concerns 
should a LTC facility limit admissions or close as a result of staff 
unavailability within a particular community. In addition to access to 
care and workforce availability issues, we also recognize the burden on 
residents and resident families when loved ones have to be located in 
LTC facilities (or relocated to LTC facilities) at a distance that 
makes family visitation and participation in care difficult. According 
to a 2021 study, ``travel time has a substantively and statistically 
significant negative association on visit probability for all age 
groups''.\122\
---------------------------------------------------------------------------

    \122\ Weimer, David L., Ph.D., Saliba, Debra, MD, MPH, Ladd, 
Heather, MS, Mukamel, Dana B., Ph.D. ``Who Visits Relatives in 
Nursing Homes? Predictors of at Least Weekly Visiting'' The Journal 
of Post-Acute and Long-Term Care Medicine. VOLUME 23, ISSUE 7, JULY 
2022. Accessed 6/27/2023 https://www.jamda.com/article/S1525-8610(21)00831-8/fulltext#%20.
---------------------------------------------------------------------------

    We considered mileage increments from 15 to 50 miles for this 
alternative criterion. After considering the number of LTC facilities 
impacted, the overlap of the provider-population ratio, and 
consideration of travel for both staff and visitors, we determined that 
20 miles best addressed these factors compared to a 15-mile increment. 
As noted below, we welcome comment on this mileage and the factors we 
should consider in determining an appropriate mileage criterion. We 
note that all certified nursing homes are geocoded into CMS' online 
survey and enforcement system. This allows us to easily and accurately 
calculate the exact distance of LTC facilities to one another. The 
following chart provides our analyses of distances.

   Table 3--LTC Facilities at Various Distances From Next Closest LTC
                                Facility
------------------------------------------------------------------------
                                                           % of LTC
                                       # of LTC       Facilities without
            Distance              Facilities without     any other LTC
                                     any other LTC      facility nearby
                                    facility nearby        (percent)
------------------------------------------------------------------------
Within 15 miles.................                 852                 5.6
Within 20 miles.................                 422                 2.8
Within 25 miles.................                 223                 1.5
Within 30 miles.................                 155                 1.0
Within 35 miles.................                 106                 0.7
Within 50 miles.................                  40                 0.3
------------------------------------------------------------------------
Note: The analysis includes 15,089 LTC facilities (1) active as February
  2023 and (2) with non-missing values in latitude or longitude.

    There are three exclusions from the exemption criteria. First, LTC 
facilities must be in compliance with requirements for the submission 
of PBJ System data. This data is critical to our evaluation of LTC 
facility staffing. Next, sections 1819(f)(8) and 1919(f)(10) of the Act 
require us to maintain a SFF program for enforcement of participation 
requirements for LTC facilities that have been identified as having 
substantially failed to meet applicable health and safety requirements. 
We are statutorily-required to survey these LTC facilities once every 6 
months. LTC Facilities designated as SFFs have a history of serious 
quality issues and are included in this program to stimulate 
improvements in their quality of care. A LTC facility that is 
designated as a SFF is excluded from receiving an exemption from the 
minimum HPRD staffing requirements.
    Finally, most LTC facilities have some deficiencies, but some LTC 
facilities have significantly more problems than others (about twice 
the average number of deficiencies), or have more serious problems than 
most other LTC facilities (including harm or injury experienced by 
residents, and a pattern of serious problems that have persisted over a 
long period of time). An OIG report on adverse events in nursing homes 
noted that 59 percent of adverse events and temporary harm events were 
clearly or likely preventable, and attributed much of the preventable 
harm to substandard treatment, inadequate resident monitoring, and 
failure or delay of necessary care.\123\ Therefore, while we are 
acknowledging the potential for LTC facility constraints that may 
create access to care issues and providing for exemptions as it relates 
to the minimum nursing staffing requirement, we must ensure that LTC 
facilities are providing safe and acceptable care despite any 
exemption. Therefore, we propose at Sec.  483.35(g)(4)(ii) that LTC 
facilities that have been cited for ``widespread insufficient staffing 
with resultant resident harm'' or ``a pattern of insufficient staffing 
with resultant resident harm'' or are cited at the immediate jeopardy 
level of severity with respect to insufficient staffing within the 12 
months preceding the survey during which the facility's non-compliance 
is identified would also not meet the criteria for an exemption from 
the requirements at Sec.  483.35(a)(1)(i) and

[[Page 61380]]

(ii). Due to the serious quality issues with these LTC facilities and 
the intent of the proposed requirement, we believe it is necessary to 
exclude these LTC facilities from the exemption to maintain the health 
and safety of residents residing in these LTC facilities.
---------------------------------------------------------------------------

    \123\ Adverse Events in Skilled Nursing Facilities: National 
Incidence Among Medicare Beneficiaries, Department of Health and 
Human Services, Office of Inspector General.
---------------------------------------------------------------------------

    We emphasize again that the exemptions apply only to the 
requirements at Sec.  483.35(a)(1)(i) and (ii) for LTC facilities to 
meet minimum HPRD staffing requirements for RNs and NAs. As such, LTC 
facilities that qualify for an exemption would still be required to 
comply with the base requirement at Sec.  483.35(a)(1) that LTC 
facilities provide services by a sufficient number of [nursing] staff 
on a 24-hour basis to provide nursing care to all residents in 
accordance with resident care plans, as well as the proposed 
requirement at Sec.  483.35(b)(1), for a LTC facility to provide onsite 
RN coverage 24 hours a day, 7 days a week; the proposed requirements at 
Sec.  483.71, to conduct a facility assessment; as well as the 
multitude of additional minimum health and safety standards for LTC 
facilities in 42 CFR part 483, subpart B. They are expected to make the 
effort to hire as many RNs and NAs as necessary to meet resident needs. 
We note that LTC facilities remain able to apply for a waiver of the RN 
and licensed nurse staffing requirements, as required by statute and as 
applicable to the LTC facility. The requirements for such a waiver are 
set forth in Sec.  483.35 (e) and (f).
    Finally, we propose at Sec.  483.35(g)(5) to specify that 
determinations of eligibility for an exemption are based on paragraphs 
(g)(1) through (3) and that facilities must provide supporting 
documentation when requested. At Sec.  483.35(g)(5), we propose that 
hardship exemptions would be granted for a period of 1-year and could 
be extended in increments of one additional year, after the initial 1-
year period, if the LTC facility continued to meet the exemption 
criteria without experiencing additional issues that would prevent them 
from eligibility.
    It is our expectation that LTC facilities that qualify for an 
exemption would make ongoing efforts to increase their capabilities to 
achieve compliance with the minimum nurse staffing requirement. 
Likewise, we expect that additional CMS programs, such as the SNF VBP 
quality measures, will also incentivize facilities to improve staffing 
at higher levels to both ensure their ability to address resident needs 
day to day and also to capitalize on incentives that are at their 
disposal for quality improvements. We solicit comment on these 
opportunities for hardship exemptions for facilities. We welcome all 
feedback but are particularly interested in the following:
     What are additional data sources that CMS can use to 
verify LTC facility hardships based on location or workforce 
unavailability and shortages or grant hardship exemptions? For example, 
the review of health professional shortage areas (HPSAs). Which data 
source or criterion, or combination of data sources or criteria, could 
accurately indicate hardship while minimizing burden to facilities?
     Is 20 miles the right distance from the next closest LTC 
facility to warrant a hardship exemption? What distance from the next 
closest LTC facility results in a hardship for resident families?
     Are there other criteria CMS should consider for a 
facility to demonstrate good faith effort to hire and retain nursing 
staff. Should CMS use BLS's median OES data to determine prevailing 
wage?
     Are there additional approaches to mitigating access to 
care concerns that CMS should consider without allowing for exemptions 
to the minimum nurse staffing requirement?
     Are there additional exclusions to the proposed exemptions 
that CMS should consider to protect resident health and safety? For 
example, should we exclude candidates for the SFF program from 
receiving an exemption?
     Is 12 months the right look-back time frame for 
exclusions? If not, what is the best time frame? Should it be 15 
months? Should it be to and including the last recertification survey?
     Are there additional hardships that CMS should consider? 
If so, how will such considerations support quality care and protect 
resident health and safety?
     Should CMS provide an exemption for facilities based on 
financial difficulty/constraints? If so, what would be an appropriate 
judgment of a LTC facility's financial status and/or financial effort? 
Considering the Medicaid transparency proposal discussed in this 
proposed rule, should CMS identify minimum spending thresholds for 
direct care staff that facilities must meet before being considered for 
an exemption? Is there a specific spending to revenue threshold that 
would be appropriate? What type of data and/or data sources can be used 
to maximize transparency and provide an objective determination?
     Are there additional steps that CMS can take to increase 
transparency and address staffing shortages? For example, this 
regulation discusses a proposal to require States to report to CMS on 
the percentage of payments for Medicaid-covered nursing facility 
services that are spent on direct care workers and support staff. Are 
there additional efforts that CMS and facilities can take to promote 
transparency and accountability related to funding for and supporting 
staffing?
4. Implementation Timeframe
    As discussed, we are proposing a minimum nurse staffing requirement 
for LTC facilities of 0.55 and 2.45 HPRD by RNs and NAs, respectively. 
We also propose revisions to the existing RN staffing to require an RN 
on site 24 hours a day, 7 days a week to provide nursing care to all 
residents in accordance with resident care plans; and propose revisions 
to the facility assessment requirement. The adoption of these 
requirements would improve the safety and quality of care of residents 
and provide direct care workers with the support needed to provide 
high-quality care.
    We are proposing to implement these proposed requirements in three 
phases, to avoid any unintended consequences or unanticipated risks to 
resident care when a facility is developing new policies and procedures 
necessary to comply with these requirements.
    We acknowledge that these proposed requirements would require 
approximately 79 percent of LTC facilities to increase their staff 
levels to meet either the RN onsite 24 hours a day, 7 days a week 
requirement or the minimum RN and NA HPRD requirements to ensure full 
compliance with the new proposals discussed in the rule.\124\ In 
addition, we anticipate that additional time would be needed to develop 
revised interpretive guidance and survey processes, conduct surveyor 
training on the changes, and implement the software changes in the 
Long-Term Care Survey Process system.
---------------------------------------------------------------------------

    \124\ Calculations use the October 2021 Care Compare data set 
that provides each nursing home's average daily resident census and 
HPRD for each nurse type (that is, RNs, LPNs/LVNs, NAs) using the 
PBJ System data for 2021 Q2.
---------------------------------------------------------------------------

    For facilities located in urban areas, we propose that 
implementation of the final requirements be achieved in three phases, 
over a 3-year period. Specifically, we propose that--
     Phase 1 would require facilities to comply with the 
Facility assessment requirements (Sec.  483.71) 60-days after the 
publication date of the final rule.
     Phase 2 would require facilities to comply with the 
requirement for a RN onsite 24 hours a day, 7 days a week (Sec.  
483.35(b)(1)) 2 years after the publication date of the final rule.
     Phase 3 would require facilities to comply with the 
minimum staffing

[[Page 61381]]

requirement of 0.55 and 2.45 HPRD for RNs and NAs respectively (Sec.  
483.35(a)(1)(i) and Sec.  483.35(a)(1)(ii)) 3 years after the 
publication date of the final rule.
    Given that there are fewer rural LTC facilities and a higher 
percentage of rural LTC facilities have greater distances between 
neighboring facilities, if a facility was not able to comply with the 
staffing requirement, it can have a more pronounced impact on access of 
care. Therefore, we expect that facilities in rural areas will require 
more time to comply with these requirements, compared to facilities in 
urban areas.
    For facilities located in rural areas, we propose the 
implementation of the final requirements be achieved in three phases, 
over a 5-year period. Specifically, we propose that--
     Phase 1 would require facilities to comply with the 
Facility assessment requirements (Sec.  483.71) 60-days after the 
publication date of the final rule.
     Phase 2 would require facilities to comply with the 
requirement for a RN onsite 24 hours a day, 7 days a week (Sec.  
483.35(b)(1)) 3 years after the publication date of the final rule.
     Phase 3 would require facilities to comply with the 
minimum staffing requirement of 0.55 and 2.45 HPRD for RNs and NAs 
respectively (Sec.  483.35(a)(1)(i) and (ii)) 5 years after the 
publication date of the final rule.
    We note that the final regulations would be effective 60 days 
following the publication of the final rule in the Federal Register. 
The implementation date for the specific requirements are listed in 
detail in Tables 4 and 5.

    Table 4--Implementation Timeframes for Facilities in Urban Areas
------------------------------------------------------------------------
         Regulatory section(s)                 Implementation date
------------------------------------------------------------------------
Proposed Sec.   483.71.................  Phase 1: 60-days after the
                                          publication date of the final
                                          rule.
Sec.   483.35(b)(1)....................  Phase 2: 2 years after the
                                          publication date of the final
                                          rule.
Sec.   483.35(a)(1)(i) and (ii)........  Phase 3: 3 years after the
                                          publication date of the final
                                          rule.
------------------------------------------------------------------------


    Table 5--Implementation Timeframes for Facilities in Rural Areas
------------------------------------------------------------------------
         Regulatory section(s)                 Implementation date
------------------------------------------------------------------------
Proposed Sec.   483.71.................  Phase 1: 60-days after the
                                          publication date of the final
                                          rule.
Sec.   483.35(b)(1)....................  Phase 2: 3 years after the
                                          publication date of the final
                                          rule.
Sec.   483.35(a)(1)(i) and (ii)........  Phase 3: 5 years after the
                                          publication date of the final
                                          rule.
------------------------------------------------------------------------

    We are defining ``rural'' in accordance with the Census definition. 
``Rural'' encompasses all population, housing, and territory not 
included within an urban area.\125\ We solicit public comments on 
whether a different definition should be used. Also, we seek feedback 
on the following:
---------------------------------------------------------------------------

    \125\ United States Census Bureau Urban and Rural https://www.census.gov/programs-surveys/geography/guidance/geo-areas/urban-rural.html.
---------------------------------------------------------------------------

     Is the proposed implementation timeframe appropriate? If 
not, are there any alternative implementation approaches for these 
requirements?
     Do other underserved communities similarly require longer 
implementation timeframes?
     To what extent are facilities and State governments 
planning to phase in, budget for, and prepare for the requirements 
before they go into effect? Additionally, what are the anticipated 
effects on resident health and safety that may be associated with these 
preparations?
    We seek input from State Medicaid programs and Medicaid interested 
parties. Specifically:
     Are there any alternative implementation approaches for 
these requirements?
     How might the proposed implementation timeframe impact 
their finances and their ability to recruit in the same labor market?
     How do you foresee potential interactions with other 
Medicaid initiatives, including implementing access standards on home 
and community-based services (HCBS)?
    Finally, to the extent a court may enjoin any part of the rule, the 
Department intends that other provisions or parts of provisions should 
remain in effect. Any provision of this section held to be invalid or 
unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.
5. Consultation With State Agencies, and Other Organizations
    Section 1863 of the Act (42 U.S.C. 1395z), requires the Secretary 
to consult with appropriate State agencies and recognized national 
listing or accrediting bodies, and appropriate local agencies, in 
relation to the determination of conditions of participation for 
providers of services.
    Pursuant to section 1863 of the Act, in addition to publishing the 
proposed rule we will consult further with the relevant entities 
following the publication of the proposed rule.

III. Medicaid Institutional Payment Transparency Reporting Provision 
(Sec. Sec.  438.72 and 442.43)

A. Background and Scope

    Millions of Americans, including children and adults of all ages, 
need long-term services and supports (LTSS) because of disabling 
conditions, chronic illness, and other factors. Medicaid allows for the 
coverage of these services through several authorities and over a 
variety of settings, ranging from institutional facilities to home and 
community-based settings. Medicaid programs are required to provide a 
nursing facility benefit for eligible individuals aged 21 or older. 
Medicaid programs may also provide other institutional LTSS as optional 
services, including services in Intermediate Care Facilities for 
Individuals with Intellectual Disabilities (ICF/IID). Medicaid is the 
largest payer nationally of LTSS. In 2019, 1.5 million Medicaid 
beneficiaries received nursing facility or ICF/IID services,\126\ which 
accounted for

[[Page 61382]]

over $61 billion in Medicaid expenditures, or 13 percent of the $478 
billion in total Medicaid expenditures during that year.\127\ Demand 
for LTSS, whether delivered in institutional settings or in the home, 
is expected to continue rising due to the growing needs of the aging 
population.128 129
---------------------------------------------------------------------------

    \126\ Kim, Min-Young, Edward Weizenegger, and Andrea Wysocki. 
Medicaid Beneficiaries Who Use Long-Term Services and Supports: 
2019. Chicago, IL: Mathematica, July 22, 2022. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf. Disclaimer: This document contains links 
to non-United States Government websites. We are providing these 
links because they contain additional information relevant to the 
topic(s) discussed in this document or that otherwise may be useful 
to the reader. We cannot attest to the accuracy of information 
provided on the cited third-party websites or any other linked 
third-party site. We are providing these links for reference only; 
linking to a non-United States Government website does not 
constitute an endorsement by CMS, HHS, or any of their employees of 
the sponsors or the information and/or any products presented on the 
website. Also, please be aware that the privacy protections 
generally provided by United States Government websites do not apply 
to third-party sites.
    \127\ Murray, Caitlin, Alena Tourtellotte, Debra Lipson, and 
Andrea Wysocki. Medicaid Long Term Services and Supports Annual 
Expenditures Report: Federal Fiscal Year 2019. Chicago, IL: 
Mathematica, December 9, 2021. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltssexpenditures2019.pdf.
    \128\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \129\ Centers for Medicare & Medicaid Services. November 2020. 
Long-Term Services and Supports Rebalancing Toolkit. Accessed at 
https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
---------------------------------------------------------------------------

    As discussed in the section on Minimum Staffing Standards (section 
II. of this proposed rule), anecdotal, quantitative, and qualitative 
evidence indicates that consistent, adequate direct care nurse staffing 
is vital to residents' health and safety. Through our regular 
interactions with State Medicaid agencies, provider groups, and 
beneficiary advocates, we have observed that all these interested 
parties routinely express the concern that chronic understaffing and 
high rates of worker turnover of direct care workers in Medicaid-
participating nursing facilities and ICF/IIDs make it difficult to 
ensure access to high-quality institutional services for people with 
disabilities and older adults. In addition to direct care nursing 
staff, other types of direct care workers--such as physical therapists 
or feeding assistants--provide long-term care services and supports 
(including, if applicable, components of active treatment as defined at 
Sec.  483.440) to allow residents to attain or maintain the highest 
practicable physical, mental, and psychosocial well-being. 
Additionally, direct care workers play a critical role in helping some 
residents develop the daily living skills needed to transition out of 
facilities and back to the community, as well as with assessing 
individuals' readiness for discharge and assisting with discharge 
planning. Also critical to residents' quality of life and quality of 
care are support staff who maintain the physical environment of the 
care facility or provide other supports to residents, such as 
housekeeping or transportation.
    Understaffing in nursing facilities and ICF/IIDs can reduce the 
efficiency of Medicaid payment for services, most clearly when the 
payment methodology is based on the actual cost of delivering services 
and such costs are increased due to reliance on overtime and temporary 
staff, which can have higher hourly costs than non-overtime wages paid 
to permanent staff. Further, understaffing can reduce quality of care, 
which can lead to poorer outcomes for people in institutional settings 
and result in costly emergency department visits and 
hospitalizations.130 131 132 Accordingly, understaffing can 
reduce the cost-effectiveness of Medicaid institutional services.
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    \130\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing 
Facility Staffing Shortages During the COVID-19 Pandemic. Apr 04, 
2022. Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \131\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \132\ Min A., Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
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    In response to these concerns about the institutional workforce, we 
are proposing new Federal requirements that are intended to promote 
public transparency around States' statutory obligation under section 
1902(a)(30)(A) of the Act and around the quality requirements in 
section 1932(c) of the Act for services furnished through managed care 
organizations (as well as for prepaid inpatient health plans (PIHPs) 
under our authority under section 1902(a)(4) of the Act), to make 
Medicaid payments that are sufficient to enlist enough providers so 
that quality LTSS are available to the beneficiaries who want and 
require such care. Specifically, we are proposing to add new Federal 
requirements that are intended to promote better understanding and 
transparency related to the percentages of Medicaid payments for 
nursing facility and ICF/IID services that are spent on compensation to 
direct care workers and support staff. We note that this proposal is 
specific to nursing facility and ICF/IID services, which we at times 
may refer to collectively in this preamble as ``institutional 
services.'' We also note that unlike in sections I. and II. of this 
proposed rule, we will not be referring to LTC facilities, as the term 
``LTC facility,'' for our purposes in this section, is both over-
inclusive (because it can refer to both Medicare- and Medicaid-
certified nursing facilities) and under-inclusive (because the term 
typically is not used to describe ICF/IIDs.)
    We are focusing in this proposal on compensation because many 
direct care workers and support staff earn low wages and receive 
limited benefits.\133\ Evidence suggests that there is a connection 
between wages and high rates of turnover among some workers in the 
institutional workforce.\134\ However, we recognize that other factors, 
such as local labor market conditions, worker satisfaction, facility 
culture, and management practices, also play important roles in worker 
turnover and shortages.\135\ Many of these other factors lie outside of 
our regulatory purview or the scope of this proposal. This proposal is 
centered on our authority under sections 1902(a)(4), 1902(a)(30), and 
1932(c) of the Act to examine specific ways in which Medicaid payments 
in fee-for-service (FFS) and managed care delivery systems are 
allocated to support efficient, effective, and high-quality LTSS.
---------------------------------------------------------------------------

    \133\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \134\ Sharma, H. and Liu, X. Association between wages and 
nursing staff turnover in Iowa. Innov Aging. 2022; 6(4): igac004. 
Published online 2022 Feb 5. doi: https://academic.oup.com/crawlprevention/governor?content=%2finnovateage%2farticle%2fdoi%2f10.1093%2fgeroni%2figac004%2f6522981.
    \135\ See, for instance, the discussion of potential factors 
contributing to turnover of direct care nursing staff in: Zheng Q, 
Williams CS, Shulman ET, White AJ. Association between staff 
turnover and nursing home quality--evidence from Payroll Based 
journal data. J Am Geriatr Soc. 2022 Sep;70(9):2508-2516. doi: 
10.1111/jgs.17843. Epub 2022 May 7. PMID: 35524769.
---------------------------------------------------------------------------

    We are aware that some interested parties, including commenters who 
responded to the FY2023 SNF PPS RFI, have expressed concerns about 
whether some States' Medicaid rates have kept pace with rising labor 
costs.\136\ We are

[[Page 61383]]

also aware of the growing scrutiny of nursing facilities that have been 
purchased by companies such as private equity organizations, and 
evidence suggests that these business models have an impact on the 
quality of institutional care.\137\ We do not intend through this 
proposal to express an opinion about amounts of States' expenditures on 
nursing facility and ICF/IID services, nor to comment on corporate 
organizational structures within the long-term care industry. As will 
be discussed in greater detail below, we are focusing in this proposal 
on data collection and transparency around the issue of compensation to 
direct care workers and support staff for some types of Medicaid-
covered institutional services, not on proposing minimum reimbursement 
or payment standards for State Medicaid agencies or providers.
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    \136\ Referring to the Request for Information released April 
2022, included in Medicare Program; Prospective Payment System and 
Consolidated Billing for Skilled Nursing Facilities; Updates to the 
Quality Reporting Program and Value-Based Purchasing Program for 
Federal Fiscal Year 2023; Request for Information on Revising the 
Requirements for Long-Term Care Facilities To Establish Mandatory 
Minimum Staffing Levels. A proposed rule by the Centers for Medicare 
& Medicaid Services on 04/15/2022 https://www.federalregister.gov/documents/2022/04/15/2022-07906/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities.
    \137\ Centers for Medicare & Medicaid Services. February 13, 
2023. Biden-Harris Administration Continues Unprecedented Efforts to 
Increase Transparency of Nursing Home Ownership. Accessed at https://www.cms.gov/newsroom/press-releases/biden-harris-administration-continues-unprecedented-efforts-increase-transparency-nursing-home.
---------------------------------------------------------------------------

    We also recognize that there are workforce challenges that may 
impact access to other Medicaid-covered services aside from 
institutional services. We are focusing in this proposed rule on 
addressing the workforce in certain institutional services. We are 
proposing to address HCBS workforce challenges outside of this 
rulemaking in the Ensuring Access to Medicaid Services proposed rule 
(88 FR 27960), published in the May 3, 2023 issue of the Federal 
Register. We will continue to assess the feasibility and potential 
impact of other possible actions to address workforce shortages in 
other parts of the health care sector.

B. Purpose and Statutory Basis

    Title XIX of the Act established the Medicaid program as a joint 
Federal and State program to provide medical assistance to eligible 
individuals. Under the Medicaid program, each State that chooses to 
participate in the program and receive Federal financial participation 
(FFP) for program expenditures establishes eligibility standards, 
benefits packages, and payment rates, and undertakes program 
administration in accordance with Federal statutory and regulatory 
requirements. The provisions of each State's Medicaid program are 
described in the Medicaid ``State plan'' and, as applicable, in 
documents related to a State's use of other authorities, such as 
demonstration projects and waivers of State plan requirements. Among 
other responsibilities, we approve State plans, State plan amendments, 
demonstration projects authorized under section 1115 of the Act, and 
waivers authorized under section 1915 of the Act; monitor activities; 
and review expenditures for compliance with Federal Medicaid law, 
including the requirements of section 1902(a)(30)(A) of the Act 
relating to efficiency, economy, quality of care, and access, to ensure 
that all applicable Federal requirements are met.
    Section 1902(a)(30)(A) of the Act requires State Medicaid programs 
to ensure that payments to providers are consistent with efficiency, 
economy, and quality of care and are sufficient to enlist enough 
providers so that care and services are available to beneficiaries at 
least to the extent as to the general population in the same geographic 
area. High-quality institutional services require hands-on services 
delivered by direct care workers. In institutional settings, direct 
care workers provide a variety of services, including nursing services, 
assistance with activities of daily living (such as mobility, personal 
hygiene, and eating), therapies, and recreation. High-quality 
institutional services also require support staff who maintain the 
physical environment of the care facility or provide other services for 
residents (such as housekeeping, janitorial and environmental services, 
food preparation, and transportation.) We discuss our proposed 
definitions of direct care workers and support staff in more detail 
later in the next section.
    Without a sufficient number of people joining or remaining in the 
direct care and support staff workforce, facilities may be less able to 
meet the care needs of their residents, whether due to understaffing or 
the hiring of workers without the appropriate training, expertise, or 
experience to deliver high-quality services and maintain the physical 
environment of the care facility. Insufficient numbers of qualified 
direct care workers and support staff can lead to poorer health 
outcomes and quality of life for people who need institutional 
services.138 139 140 141 142 Further, these challenges can 
result in facility closures that in some cases result in residents 
being relocated to other facilities far from their friends and 
families, due to a lack of immediately-available alternative LTSS 
options in their geographical area or due to a lack of sufficient time 
to seek other options for care.\143\ Therefore, as discussed in greater 
detail in the next section, we propose at Sec.  442.43(b) to require 
that States report annually on the percent of payments claimed by the 
State for Medicaid-covered services delivered by nursing facilities and 
ICF/IIDs that are spent on compensation to direct care workers and 
support staff. As discussed later in this section, this proposal is 
intended to promote transparency around compensation for direct care 
workers and support staff. We believe that gathering and sharing data 
about the amount of Medicaid dollars that are going to the compensation 
of workers is a critical step in the larger effort to understand the 
ways we can enact policies that support the institutional care 
workforce and thereby help advance access to high quality care for 
Medicaid beneficiaries.
---------------------------------------------------------------------------

    \138\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \139\ Yaa Akosa Antwi and John R. Bowblis. The Impact of Nurse 
Turnover on Quality of Care and Mortality in Nursing Homes: Evidence 
from the Great Recession. Upjohn Institute Working Paper 16-249. 
January 2016. Accessed at https://research.upjohn.org/cgi/
viewcontent.cgi?article=1267&context=up_workingpapers#:~:text=Turnove
r%20in%20health%20facilities%20reduces,health%20outcomes%20(Thomas%20
et%20al.
    \140\ Zheng Q, Williams CS, Shulman ET, White AJ. Association 
between staff turnover and nursing home quality--evidence from 
Payroll Based journal data. J Am Geriatr Soc. 2022 Sep;70(9):2508-
2516. doi: 10.1111/jgs.17843. Epub 2022 May 7. PMID: 35524769.
    \141\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \142\ Min A, Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
    \143\ Holder, J., & Jolley, D. (2012). Forced relocation between 
nursing homes: Residents' health outcomes and potential moderators. 
Reviews in Clinical Gerontology, 22(4), 301-319. doi:10.1017/
S0959259812000147.
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    Section 1902(a)(6) of the Act requires State Medicaid agencies to 
make such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to

[[Page 61384]]

comply with such provisions as the Secretary may from time to time find 
necessary to assure the correctness and verification of such reports. 
Under our authority at section 1902(a)(6) of the Act, and consistent 
with section 1902(a)(30)(A) of the Act, we propose to newly require 
that State Medicaid agencies report, at the facility level, on the 
portion of payments for nursing facility and ICF/IID services that are 
spent on compensation for the direct care and support staff 
workforce.\144\ While some States have voluntarily established similar 
transparency policies or initiatives, we believe a Federal requirement 
is necessary and would be more effective to generate more meaningful 
and comparable data and support transparency nationwide.
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    \144\ Throughout this discussion, we use the term ``States'' to 
include all States, Washington, DC, and the territories that include 
nursing facility services or ICF/IID services in their State plans.
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    We find no basis for applying these proposed requirements only when 
States' LTSS delivery systems are FFS, and thus for the same reasons we 
are proposing them for FFS delivery systems, we are also proposing to 
apply them when LTSS systems are covered through managed care. For 
States that contract with MCOs and PIHPs to cover services delivered by 
nursing facilities and ICF/IIDs, we propose that States report annually 
on the percent of payments made to nursing facilities and ICF/IIDs that 
is spent for compensation to direct care workers and support staff. 
Section 1932(c) of the Act lays out quality assurance standards with 
which States must comply when delivering Medicaid services through 
managed care organizations. Including services delivered by managed 
care organizations is authorized under section 1932(c), which requires 
the Secretary to both monitor States and consult with States on 
strategies to ensure quality of care. Additionally, based on our 
authority under section 1902(a)(4) of the Act to specify ``methods of 
administration'' that are ``necessary for proper and efficient'' 
administration of the State plan, we also propose to include prepaid 
inpatient health plans (PIHPs) in this proposed rule. Again, we see no 
basis for excluding services furnished through a PIHP from the proposed 
requirements; throughout this document, the use of the term ``managed 
care plan'' means MCOs and PIHPs and is used only when the discussion 
applies to both arrangements.
    This proposal is intended to promote transparency around 
compensation for direct care workers and support staff. We believe that 
gathering and sharing data about the amount of Medicaid dollars that 
are going to the compensation of workers is a critical step in the 
larger effort to understand the ways we can enact policies that support 
the institutional care workforce, which plays an essential part in the 
economy, efficiency, and quality of institutional services. We believe 
that compensation levels are a factor in the creation of a stable 
workforce, and that a stable workforce will result in better qualified 
employees, lower turnover, and safer and higher quality 
care.145 146 If individuals are attracted to the 
institutional LTSS workforce and incentivized to remain employed in it, 
the workforce is more likely to be comprised of workers with the 
training, expertise, and experience to meet the diverse and often 
complex needs of individuals with disabilities and older adults 
residing in institutions. A stable and qualified workforce will also 
enable beneficiaries to access providers of the services they have been 
assessed to need.
---------------------------------------------------------------------------

    \145\ See, for example, the discussion of low wages among direct 
care workers in Campbell, S., A. Del Rio Drake, R. Espinoza, K. 
Scales. 2021. Caring for the future: The power and potential of 
America's direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \146\ See, for example, the discussion of the relationship 
between staff turnover and nursing home quality in Zheng Q, Williams 
CS, Shulman ET, White AJ. Association between staff turnover and 
nursing home quality--evidence from Payroll Based journal data. J Am 
Geriatr Soc. 2022 Sep;70(9):2508-2516. doi: 10.1111/jgs.17843. Epub 
2022 May 7. PMID: 35524769.
---------------------------------------------------------------------------

    As we discuss below, we are not proposing a minimum percentage of 
Medicaid payments for nursing facility services and ICF/IID services 
that must be spent on compensation to direct care workers and support 
staff. We do not have adequate information at this time to determine 
such a minimum percentage, nor what impact requiring a minimum 
percentage would have on Medicaid institutional payments. We are aware 
that data collected from nursing facilities as part of the PBJ 
reporting program in Sec.  483.70(q) provides the potential to begin 
extrapolating information about the relationships between staffing 
hours and staff compensation in nursing facilities that serve Medicaid 
residents.\147\ We also understand that the variability among States' 
Medicaid institutional payment rate methodologies and payment rates 
presents challenges to national studies on issues related to staffing 
and compensation. In addition, we note that, because there are 
comparatively fewer reporting requirements for ICF/IIDs than there are 
for nursing facilities, there is a need for greater data and 
transparency on the workforce in these facilities. We view this 
proposed transparency requirement as a necessary step in gathering and 
making publicly available more information about Medicaid institutional 
payments that can aid in further analyses, which in turn can inform 
future policy development and potential rulemaking. Please refer to the 
discussion in section IV. (Collection of Information) of this proposed 
rule where we discuss in greater detail the specifics of the activities 
and resources we anticipate would be required from States, managed care 
plans, and providers to implement and comply with these proposed 
requirements.
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    \147\ See, for example, the use of Payroll Based Journal data to 
analyze staffing hours and compensation in Bowblis, J., Brunt, C., 
Xu, H., and Grabowski, D. Understanding Nursing Home Spending And 
Staff Levels In The Context Of Recent Nursing Staff Recommendations. 
Health Affairs. 2022:42(2) 197-206.
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    We also note that while aspects of this proposal are intended to 
complement the goals expressed in section II of this preamble, the 
following proposals presented below would be, if finalized, distinct 
provisions. To the extent a court may enjoin any part of a final rule, 
the Department intends that other provisions or parts of provisions 
should remain in effect. Should they be finalized, we intend that any 
provision of the proposals described in this section or in another 
section held to be invalid or unenforceable by its terms, or as applied 
to any person or circumstance, would be construed so as to continue to 
give maximum effect to the provision permitted by law, unless such 
holding is one of utter invalidity or unenforceability, in which event 
we intend that the provision would be severable from the other 
finalized provisions described in this section and in other sections 
and would not affect the remainder thereof or the application of the 
provision to persons not similarly situated or to dissimilar 
circumstances

C. Proposed Provisions

    We are proposing to create a new provision, Sec.  442.43, which 
would specify requirements for States to report on compensation for 
direct care workers and support staff as a percentage of Medicaid 
payments for nursing facility and ICF/IID services. At Sec.  
442.43(a)(1), we propose to define compensation to include salary, 
wages, and other remuneration as defined by the Fair Labor Standards 
Act and implementing regulations (29 U.S.C. 201 et seq., 29 CFR parts 
531 and 778), and benefits (such as health and dental benefits, sick 
leave, and tuition reimbursement). In

[[Page 61385]]

addition, we propose to define compensation to include the employer 
share of payroll taxes for direct care workers and support staff 
delivering Medicaid-covered nursing facility and ICF/IID services 
(which, while not necessarily paid directly to the workers, is paid on 
their behalf). We considered whether to include training or other costs 
in our proposed definition of compensation. However, we believe that a 
definition that more directly addresses the financial benefits to 
workers would better measure the portion of the payment for services 
that went to direct care workers and support staff, as it is unclear 
that the cost of training and other workforce activities is an 
appropriate way to quantify the benefit of those activities for 
workers. We are also concerned that requesting providers to quantify 
and include costs of non-financial benefits in their reporting would 
prove burdensome and could introduce a lack of uniformity in 
determining and reporting related costs. We request comment on our 
proposed definition of compensation, particularly whether the 
definition of compensation should include other specific financial and 
non-financial forms of compensation for the workers included in these 
proposed provisions.
    At Sec.  442.43(a)(2), for the purposes of the proposed reporting 
provision at Sec.  442.43(b), we propose to define direct care workers 
to include: nurses (registered nurses, licensed practical nurses, nurse 
practitioners, or clinical nurse specialists) who provide nursing 
services to Medicaid-eligible individuals receiving nursing facility 
and ICF/IID services; certified nurse aides who provide such services 
under the supervision of one of the foregoing nurse provider types; 
licensed physical therapists, occupational therapists, speech-language 
pathologists, and respiratory therapists; certified physical therapy 
assistants, occupational therapy assistants, speech-language therapy 
assistants, and respiratory therapy assistants or technicians; social 
workers; personal care aides; medication assistants, aides, and 
technicians; feeding assistants; activities staff; and other 
individuals who are paid to provide clinical services, behavioral 
supports, active treatment (as defined at Sec.  483.440 \148\), or 
address activities of daily living (such as those described in Sec.  
483.24(b), which includes activities related to mobility, personal 
hygiene, eating, elimination, and communication), for individuals 
receiving Medicaid-covered nursing facility and ICF/IID services. Our 
proposed definition of direct care worker is intended to broadly define 
such workers to ensure that the definition appropriately captures the 
diversity of roles and titles that direct care workers may have.
---------------------------------------------------------------------------

    \148\ Active treatment services, as defined in 42 CFR 483.440, 
are services required in ICF/IIDs as part of their Medicaid 
Conditions of Participation.
---------------------------------------------------------------------------

    We recognize that our proposed definition of direct care worker 
differs from the definition of direct care staff at Sec.  483.70(q)(1), 
which was established for the PBJ reporting program at Sec.  483.70(q). 
The PBJ reporting program requires that LTC facilities report on the 
staffing hours of specified direct care staff (but does not require 
reporting on the compensation for direct care staff). In particular, 
our proposed definition does not include administrators (or staff whose 
primary function is administrative or supervisory), nor do we propose 
to include physicians or physician assistants. This difference is 
intentional as we are more closely aligning our proposed definition of 
direct care worker with the definition of direct care worker for a 
similar provision focused on HCBS in the Ensuring Access to Medicaid 
Services proposed rule (88 FR 27960), published in the May 3, 2023 
issue of the Federal Register. We believe that closer alignment of the 
definition in this proposed rule with the definition in the Ensuring 
Access to Medicaid Services proposed rule would help to provide a more 
consistent picture of the direct care workforce for individuals 
receiving Medicaid-covered LTSS across settings. We also believe that 
this may reduce State reporting burden. Additionally, we believe the 
definition of direct care workers proposed in this rule represents a 
subset of the categories of direct care staff that nursing facilities 
are already familiar with as part of the PBJ reporting 
requirement.\149\ Further, we note that ICF/IIDs are currently not 
required to participate in the PBJ reporting, and thus, we do not 
expect them to be affected by the definition of direct care staff at 
Sec.  483.70(q)(1).
---------------------------------------------------------------------------

    \149\ Centers for Medicare & Medicaid Services, Electronic 
Staffing Data Submission Payroll Based Journal: Long-Term Care 
Facility Policy Manual. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Downloads/PBJ-Policy-Manual-Final-V25-11-19-2018.pdf.
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    We request feedback on our proposed definition of direct care 
worker at Sec.  442.43(a)(2). We specifically request whether there are 
categories of staff we should add to, or remove from, our proposed 
definition. Additionally, we are particularly interested in ensuring 
that this provision includes staff who can be instrumental in helping 
residents achieve the level of health or develop skills needed to 
transition from nursing facilities back into the community, assess 
residents for readiness for transition, and support in discharge 
planning. We request feedback from the public as to whether our 
proposed definition appropriately includes workers who provide these 
services, or if we would need to include such staff as a distinct 
category of staff within this provision. We also request comment on 
whether we should adopt the definition of direct care staff at Sec.  
483.70(q)(1), instead of our proposed definition of direct care worker. 
If commenters support adopting the definition of Sec.  483.70(q)(1), we 
request that they also provide information on whether this definition 
would include the staff who help residents achieve the level of health 
or develop the skills needed to transition from nursing facilities back 
into the community, assess residents for readiness for transition, and 
support in discharge planning, or if these staff would still need to be 
specified as a separate category.
    We also propose in Sec.  442.43(a)(2) to define direct care workers 
to include individuals employed by or contracted or subcontracted with 
a Medicaid provider or State or local government agency. This proposal 
is in recognition of the varied ownership and employment relationships 
that can exist in Medicaid institutional services. For instance, 
differences may include: institutions that are privately owned and 
operated or facilities owned and operated by a local or State 
government; facilities that are partially or wholly staffed through a 
third-party staffing organization through a contractual arrangement; or 
staff who are employed directly or as independent contractors. We 
solicit comment on whether this component of our proposed definition 
adequately captures the universe of potential employment or contractual 
relationships between institutional facilities and relevant direct care 
workers.
    At Sec.  442.43(a)(3), for the purposes of the proposed reporting 
requirement at Sec.  442.43(b), we propose to define support staff to 
include individuals who are not direct care workers and who maintain 
the physical environment of the care facility or support other services 
(such as cooking or housekeeping) for residents. Similar to our 
proposed definition of direct care worker, our proposed definition of 
support staff is intended to broadly define such workers to ensure that 
the definition appropriately captures the diversity of roles and titles 
that such workers may have. Specifically, we

[[Page 61386]]

propose to define support staff to include: housekeepers; janitors and 
environmental services workers; groundskeepers; food service and 
dietary workers; drivers responsible for transporting residents; and 
any other individuals who are not direct care workers and who maintain 
the physical environment of the care facility or support other services 
for individuals receiving Medicaid-covered nursing facility and ICF/IID 
services. We request comment on whether there are other specific types 
of workers, such as security guards, who should be included in the 
definition. We are also soliciting comment on whether any of the types 
of workers listed in this proposal should be excluded from the 
definition of support staff. We also request comment, generally, on our 
proposal to include support staff in this proposed reporting 
requirement.
    We propose to define support staff to include individuals employed 
by or contracted or subcontracted with a Medicaid provider or State or 
local government agency. Similar to our discussion of the proposed 
definition of direct care worker in Sec.  442.43(a)(2), our intention 
with this proposal is to recognize the varied employment relationships 
that can exist in Medicaid institutional services, including the use of 
third-party employers. (For instance, a facility may contract with a 
third-party transportation company to provide transportation services 
to residents.) We solicit comment on whether this component of our 
proposed definition adequately captures the universe of potential 
employment or contractual relationships between institutional 
facilities and relevant support staff.
    Based on our authority at sections 1902(a)(6) and (a)(30)(A) of the 
Act with respect to FFS, and sections 1902(a)(4) and 1932(c) of the Act 
with respect to managed care plans, we are proposing new reporting 
requirements at Sec.  442.43(b) to require States to report annually, 
by delivery system (if applicable) and by facility, on the percent of 
Medicaid payments for nursing facility and ICF/IID services that is 
spent on compensation for direct care workers and on compensation for 
support staff, at the time and in the form and manner specified by CMS. 
We believe that this information would help identify national trends 
and would also help States identify facilities that appear to be 
outliers in terms of the amount of Medicaid payment going to direct 
care worker and support staff compensation. We believe that 
contextualizing direct care worker and support staff compensation 
information in this manner would help States understand whether current 
payment rates for nursing facility and ICF/IID services are consistent 
with economy, efficiency, and quality, and sufficient to ensure 
meaningful beneficiary access.
    We are proposing that the reporting to CMS would be for all 
Medicaid payments made to nursing facility and ICF/IID providers. For 
FFS payments, this would include base payments and supplemental 
payments for nursing facility and ICF/IID services. We note that for 
FFS base and supplemental payments, we are relying on the definition of 
``supplemental payments'' provided in section 1903(bb)(2) of the Act, 
which defines supplemental payments as Medicaid payments to a provider 
that are in addition to any base payment made to providers under the 
State plan or under demonstration authority. As discussed in guidance 
released in 2021, we interpret ``base payment'' (as used in the 
definition of ``supplemental payment'' in section 1903(bb)(2)(A) of the 
Act), to refer to a standard payment to the provider on a per-claim 
basis for services rendered to a Medicaid beneficiary in an FFS 
environment. The base payment can include: (1) any payment adjustments; 
(2) any add-ons; and/or (3) any other additional payments received by 
the provider that can be attributed to services identifiable as having 
been provided to an individual beneficiary, including those that are 
made to account for a higher level of care, complexity, or intensity of 
services provided to an individual beneficiary.\150\
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    \150\ Centers for Medicare & Medicaid Services, State Medicaid 
Directors Letter # 21-006, New Supplemental Payment Reporting and 
Medicaid Disproportionate Share Hospital Requirements under the 
Consolidated Appropriations Act, 2021, December 10, 2021. https://www.medicaid.gov/federal-policy-guidance/downloads/smd21006.pdf.
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    We are proposing that States report on FFS base and supplemental 
payments made to facilities because we believe this would provide a 
comprehensive picture of Medicaid FFS payments made for these services. 
However, we recognize that, given the variability in both base and 
supplemental payments across (and even within) States, there may be 
value in understanding the percent of the base payments alone that is 
going to compensation for direct care workers and support staff. We 
solicit comment on whether, for FFS payments, we should instead request 
reporting on only the percent of base payments spent on such 
compensation, or separate reporting on the percent of base payments and 
on the percent of aggregated payments (base plus supplemental payments) 
spent on such compensation.
    We also propose at Sec.  442.43(b) that for States that contract 
with MCOs and/or PIHPs to cover services delivered by nursing 
facilities and/or ICF/IIDs, that States report on the percent of 
payments made by the MCO or PIHP to nursing facilities and ICF/IIDs 
that is spent for compensation to direct care workers and support 
staff. For these managed care plans, payments would include the managed 
care plan's contractually negotiated rate, State directed payments 
defined in Sec.  438.6(a), pass-through payments defined in Sec.  
438.6(a) for nursing facilities, and any other payments from the MCO or 
PIHP to the nursing facility or ICF/IID. We are also proposing to 
require that States, if they deliver the relevant services through both 
FFS and managed care, they report separately for each delivery system.
    We note that we are proposing that the reporting be performed 
annually. We solicit comment on this timeframe. We request comment on 
whether annual reporting is reasonable, or if we should reduce the 
frequency of reporting to every other year or every 3 years.
    We propose at Sec.  442.43(b)(1) to require this reporting for 
payments, including FFS base and supplemental payments and payments 
from managed care plans, to nursing facilities and ICF/IIDs for 
Medicaid-covered services, with the exception of services offered in 
swing bed hospitals (as described in Sec.  440.40(a)(1)(ii)(B)). We are 
proposing to exclude swing bed hospitals, as we do not want to pose a 
burden on rural hospitals that provide LTSS to a comparatively small 
number of beneficiaries. We welcome comment on this proposal.
    At Sec.  442.43(b)(2), we propose that States exclude from the 
reporting payments for which Medicaid is not the primary payer. If 
finalized, this would mean that States would exclude Medicaid payments 
to cover only cost-sharing payments on behalf of residents who are 
dually eligible for Medicare and Medicaid and whose skilled nursing 
care services are paid for by Medicare. We are proposing this exclusion 
for two reasons. The first is that, given that facilities (particularly 
nursing facilities) receive revenue from sources other than Medicaid, 
we wish to reiterate that this reporting is limited to only the percent 
of Medicaid payments going to compensation for direct care workers and 
support staff (and thus would not include Medicare or private 
payments). The second reason for this exclusion is that the goal of 
this reporting, as discussed throughout this preamble, is to collect 
data demonstrating the

[[Page 61387]]

relationship between Medicaid payments for nursing facility and ICF/IID 
services and the wages paid to direct care workers and support staff. 
We believe that including cost-sharing payments for services that were 
primarily paid for by Medicare is outside the scope of this data 
collection. However, we solicit feedback from the public on whether 
including cost-sharing payments for services that were primarily paid 
for by Medicare would provide a more accurate picture of the 
relationship between Medicaid payments and worker compensation. We also 
request comment on whether excluding cost-sharing payments would 
increase or decrease burden on States and providers.
    We also note that we are not proposing to exclude beneficiary 
contributions to their care when Medicaid is the primary payer of the 
services. For FFS programs, base payments included in the reporting 
should be representative of the total payment amount a provider would 
expect to receive as payment-in-full for the provision of Medicaid 
services to individual beneficiaries. (We note that Sec.  447.15 
defines payment-in-full as ``the amounts paid by the agency plus any 
deductible, coinsurance or copayment required by the plan to be paid by 
the individual.'') For managed care delivery systems, although the term 
``payment-in-full'' as defined at Sec.  447.15 is not applicable, for 
consistency between FFS and managed care delivery systems, any 
deductible, coinsurance or copayment required to be paid by the 
individual would similarly be included in the total amount used to 
determine the percent of Medicaid payments for nursing facility and 
ICF/IID services that is spent on compensation for direct care workers 
and support staff. Therefore, we believe the rate used for comparison 
should be inclusive of total payment from the Medicaid agency, MCO, or 
PIHP plus any applicable coinsurance, copayments and deductibles, to 
the extent that a beneficiary is expected to be liable for those 
payments. We note that this understanding helps promote consistency 
with a proposal regarding payment reporting in the Ensuring Access to 
Medicaid Services proposed rule (see, in particular, the discussion at 
88 FR 28012). We welcome feedback on whether commenters believe 
beneficiary contributions should be excluded.
    We considered whether to allow States, at their option, to exclude 
from their reporting payments to providers that have low Medicaid 
revenues or serve a small number of Medicaid beneficiaries, based on 
Medicaid revenues for the service, the number of Medicaid beneficiaries 
receiving the service, or other Medicaid utilization data including but 
not limited to Medicaid bed days. We considered this option as a way to 
reduce State, managed care plan, and provider data collection and 
reporting burden based on the experience of States that have 
implemented similar reporting requirements. However, we are concerned 
that such an option could discourage providers from serving Medicaid 
beneficiaries or increasing the number of Medicaid beneficiaries 
served. We request comment on whether we should allow States the option 
to exclude, from their reporting to us, payments to providers that have 
low Medicaid revenues or serve a small number of Medicaid 
beneficiaries, based on Medicaid revenues for the service, the number 
of Medicaid beneficiaries receiving the service, or other Medicaid 
utilization data including but not limited to Medicaid bed days. We 
also request comment on whether we should establish a specific limit on 
such an exclusion and, if so, the specific limit we should establish, 
such as to limit the exclusion to providers in the lowest 5th, 10th, 
15th, or 20th percentile of providers in terms of Medicaid revenues for 
the service, number of Medicaid beneficiaries served, or other Medicaid 
utilization data (including but not limited to Medicaid bed days.)
    At Sec.  442.43(c)(1), we propose that the reporting must provide 
information necessary to identify, at the facility level, the percent 
of Medicaid payments spent on compensation to: direct care workers at 
each nursing facility, support staff at each nursing facility, direct 
care workers at each ICF/IID, and support staff at each ICF/IID. We 
anticipate that States and providers would be able to obtain the 
information needed to calculate the percent of Medicaid payments made 
to direct care workers and support staff using data used in rate 
setting, internal wage information, cost reports, and resident census 
numbers (which would indicate the number of days residents had 
Medicaid-covered stays during the year.) However, we solicit comment on 
our proposal that information be reported at the facility level, 
particularly on any concerns about potential burden on providers and 
States.
    In constructing this proposal, we sought to balance the need for 
useful data with burden on States and providers, and we do not want to 
request more information than is necessary to get basic insight into 
the relationship between Medicaid payments and direct worker and 
support staff compensation. To that end, we are proposing to include in 
the reporting requirement the percentages of Medicaid payments to each 
nursing facility or ICF/IID that are going towards compensation to 
direct care workers and support staff at those facilities. However, we 
would consider adding to the proposed reporting requirements additional 
elements for States to report on median hourly compensation for direct 
care workers and median hourly compensation for support staff, in 
addition to the percent of Medicaid payments going to overall 
compensation for these workers. If commenters believe reporting on 
median compensation would yield useful information, we request that 
commenters also provide feedback on whether the reporting should be on 
salary/wages, or on total compensation (salary/wages and other 
remuneration, including employer expenditures for benefits and payroll 
taxes), and whether the information should be calculated for all direct 
care workers and for all support staff, or further broken down by the 
staff categories specified in our proposal at Sec.  442.43(a)(2) and 
(3).
    At Sec.  442.43(c)(2), we propose that States must report the 
information required at Sec.  442.43(c)(1) (the percent of Medicaid 
payment going to compensation for direct care workers and support staff 
and, if added to the provision, median hourly wages) according to a 
methodology that we provide. We believe it is important to have States 
use a consistent methodology when collecting and reporting information 
from facilities. If this proposal is finalized, we would specify a 
reporting methodology as part of the reporting instrument, which would 
be submitted separately for formal public comment under the processes 
set forth by the Paperwork Reduction Act. We are not proposing to 
codify a specific reporting methodology to allow for increased 
flexibility to refine and adapt the reporting methodology as States and 
CMS gain experience with the process. At this time, we solicit initial 
suggestions for an appropriate methodology for identifying the 
percentage of Medicaid payment that has gone to direct care worker and 
support staff compensation (noting that the underlying elements of the 
methodology could change should any final reporting requirements change 
in response to comments received on this proposed rule). We also 
solicit initial suggestions whether separate methodologies would be 
appropriate for base payments and supplemental payments, and if so, 
suggestions for each. Commenters who support adding

[[Page 61388]]

a requirement to report median hourly wages are also welcome to provide 
suggestions for a methodology for those calculations.
    To support our goal of transparency, we are considering adding a 
provision requiring that States make publicly available information 
about the underlying FFS payment rates themselves for nursing facility 
and ICF/IID services. We believe it is likely that being able to view 
the reported information (percent of Medicaid payments going to 
compensation for direct care workers and support staff and, if added to 
the provisions, the median hourly wages) might be more meaningful if 
interested parties could review this data with the added context of 
information about typical nursing facility and ICF/IID FFS per diem 
payments in those States that use a FFS delivery model for these 
services. While we approve States' FFS methodologies for setting the 
rates for nursing facility and ICF/IID services as part of the State 
plan amendment process, we do not currently require States to report 
the rates for these services. Further, the amounts can change over time 
without further State plan review according to the CMS-approved rate 
methodology (for example, when the State plan rate methodology is based 
on Medicare rates for services and not a fixed fee schedule). We have 
also heard from interested parties that members of the public would be 
interested in comparing the per diem rates nationally. Additionally, we 
have heard from providers that, as Medicaid payments to individual 
facilities may vary due to differences in acuity, add-on payments, or 
other factors, providers would be interested in comparing their own 
Medicaid revenues against an average or typical per diem rate in their 
State. We are considering adding to the proposed reporting provisions a 
requirement that, as applicable, States report a single average 
statewide FFS per diem rate (one reported rate for nursing facility 
services and one reported rate for ICF/IID services.) If commenters 
agree that this information should be added to the reporting 
requirements, we request comment on whether the reported average should 
be the average of only the per diem base payment rates, or the average 
of the per diem base payment rates plus supplemental payments. We are 
weighing both options, as reporting on the average of the per diem base 
payment rate (without including supplemental payments) would provide an 
average that is more representative of the ``typical'' per diem rate 
(since not all facilities necessarily receive supplemental payments.) 
On the other hand, an average that includes both the per diem base 
payment rate and supplemental payments would provide a more complete 
picture of the total Medicaid spending on these services. We request 
comment on which option interested parties believe would provide the 
most useful snapshot of payment for these services.
    We do note that in the Ensuring Access to Medicaid Services 
proposed rule (88 FR 27960), we are proposing at Sec.  447.203(b)(1) 
that States publish all Medicaid FFS rates. This new proposed process 
would require States to publish their FFS Medicaid base payment rates 
in a clearly accessible, public location on the State's website. In 
Sec.  447.203(b)(2) and (3) of the Ensuring Access to Medicaid Services 
proposed rule, we proposed that States would be required to conduct a 
comparative payment rate analysis between the States' Medicaid payment 
rates and Medicare rates for certain services, and provide a payment 
rate disclosure for certain HCBS that would include an average hourly 
rate for those specified HCBS.
    We believe that the proposal we are considering here is both 
complementary to, and distinguishable from, the proposals in the 
Ensuring Access to Medicaid Services proposed rule. The payment rate 
transparency proposal in the Ensuring Access to Medicaid Services 
proposed rule at Sec.  447.203(b)(1), while comprehensive, would 
request specifically payment rates made to providers delivering 
Medicaid services to Medicaid beneficiaries through the FFS delivery 
model. To the extent rates are bundled, we are proposing publication of 
unbundled rates by constituent service. This is distinct from the 
proposal in this proposed rule, which is proposing to examine per diem 
rates, solely in nursing facilities and ICF/IID. A per diem rate is 
akin to a bundled rate and typically is not reflective of the cost of 
an individual service; as such, the proposals generally would examine 
different payment rates. Additionally, the comparative payment rate 
analysis proposed in the Ensuring Access to Medicaid Services proposed 
rule at Sec.  447.203(b)(2) focuses on comparing to Medicare rates for 
specified services, which is not an element included in this proposal. 
Finally, the proposal in the Ensuring Access to Medicaid Services 
proposed rule at Sec.  447.203(b)(3) that would require disclosure of 
hourly payment rates is for HCBS and would therefore not overlap with 
nursing facility and ICF/IID services.
    We also note that this potential reporting requirement would only 
be for FFS systems. For managed care programs, we are not considering 
requiring the public reporting of the contractually negotiated rates 
for individual providers. .
    We considered whether to propose a requirement that a minimum 
percentage of all Medicaid payments, including but not limited to base 
payments and supplemental payments, with respect to Medicaid-covered 
nursing facility services and ICF/IID services be spent on compensation 
to direct care workers and support staff. However, we do not have 
adequate information at this time to determine a minimum percentage of 
the payments for Medicaid-covered nursing facility services and ICF/IID 
services that should be spent on compensation for direct care workers 
and support staff. In consideration of potential future rulemaking, we 
request comment on whether we should require that a minimum percentage 
of the payments for Medicaid-covered nursing facility services and ICF/
IID services be spent on compensation for direct care workers and 
support staff. We also request comment on whether such a requirement 
would be necessary to ensure that payment rates and methodologies are 
economic and efficient and consistent with meaningful beneficiary 
access to safe, high-quality care, or otherwise necessary for the 
proper and efficient operation of the State plan. Additionally, we 
request suggestions on the specific minimum percentage of payments for 
Medicaid-covered nursing facility services and ICF/IID services that 
should be required to be spent on compensation to direct care workers 
and support staff. If a minimum percentage is recommended, we request 
that commenters provide separate recommendations for nursing facility 
services and ICF/IID services and the rationale for each such minimum 
percentage that is recommended. We request that commenters provide data 
or evidence to support such recommendations, which we will review as 
part of our consideration of policy and rulemaking options.
    Based on our authority in sections 1902(a)(6) and 1902(a)(30)(A) of 
the Act with respect to FFS, and sections 1902(a)(4) and 1932(c) of the 
Act with respect to managed care plans, we are proposing new 
requirements to promote public transparency related to the 
administration of Medicaid-covered institutional services. We believe 
that promoting public transparency is an important first step for 
holding States accountable for ensuring that Medicaid payments are used 
in a way that is efficient and economic, to provide a

[[Page 61389]]

foundation for future analyses of whether the payments are sufficient 
to enlist enough providers so that quality LTSS are available to the 
beneficiaries who want and require such care. Feedback from interested 
parties during various public engagement activities over the past 
several years has indicated that States do not routinely make publicly 
available information on the percent of payments that are going to the 
workforce, specifically. As a result, we believe that the proposal 
described immediately below is needed to support the efficient 
administration of Medicaid coverage of nursing facility and ICF/IID 
services by promoting public transparency and accountability related to 
the percent of payments for such services that goes to compensation to 
direct care workers and support staff.
    Specifically, at Sec.  442.43(d), we propose to require States to 
operate a website that meets the availability and accessibility 
requirements at Sec.  435.905(b) of this chapter and that provides the 
results of the newly proposed reporting requirements in Sec.  
442.43(b). We request comment on whether the proposed requirements at 
Sec.  435.905(b) are adequate to ensure the availability and the 
accessibility of the information for people receiving LTSS and other 
interested parties. We note that the accessibility and availability 
requirements set forth in Sec.  435.905(b) focus on whether the 
language used on a website is accessible to computer users with 
disabilities or limited English proficiency. Other accessibility 
considerations, including the labelling of website links, ensuring the 
website content is up-to-date, or providing specific information about 
how users may access assistance are addressed in subsequent proposals 
below.
    At Sec.  442.43(d)(1), we propose to require that the data and 
information that States are required to report in Sec.  442.43(b) be 
provided on one website, either directly or by linking to relevant 
information on the websites of the managed care plan that is contracted 
to cover nursing facility or IFC/IID services. We intend for the States 
to be ultimately responsible for ensuring compliance with the proposal, 
including to ensure through contractual arrangements with managed care 
plans, as applicable, that the proposed requirements are satisfied when 
required information is provided on websites maintained by these plans. 
Proposed Sec.  442.43(d) contemplates that some States that provide 
nursing facility or ICF/IID services through managed care may decide to 
work with their managed care plans to make the reporting information 
available on the managed care plans' websites, rather than replicating 
the information directly on the State's website. We request comment on 
whether States should be permitted to link to websites of these managed 
care plans, and if so, whether we should limit the number of separate 
websites that a State could link to in place of directly reporting the 
information on its own website; or whether we should require that all 
the required information be posted directly on a website maintained by 
the State.
    At Sec.  442.43(d)(2), we propose to require that the website 
include clear and easy to understand labels on documents and links. At 
Sec.  442.43(d)(3), we propose to require that States verify the 
accurate function of the website and the timeliness of the information 
and links at least quarterly. We note here that the intent of Sec.  
442.43(d)(3) is to require that States ensure that the reporting 
information on their own website is up to date. We would also expect, 
if the State is linking to a managed care plan website, that the State 
ensure on at least a quarterly basis that the links are operational and 
continue to link to the information States are required to report in 
Sec.  442.43(b). We are not proposing to direct that managed care plans 
must also review their websites quarterly, but rather we expect that 
States would develop a process with their managed care plans to ensure 
that any reporting information contained on a managed care plan website 
is timely and accurate. If a State obtains information that a managed 
care plan website to which the State links as a means of publishing the 
required reporting information is not being maintained with timely 
updates for ongoing accuracy, we expect that the State would work with 
the relevant managed care plan to correct the situation and, if 
unsuccessful, would cease linking to that managed care plan's website 
and would begin to post the required reporting information on a State-
maintained website. We request comment on this proposal, including 
whether this timeframe for website review is sufficient or if we should 
require a shorter timeframe (monthly) or a longer timeframe (semi-
annually or annually).
    At Sec.  442.43(d)(4), we propose to require that States include 
prominent language on the website explaining that assistance in 
accessing the required information on the website is available at no 
cost to the public and include information on the availability of oral 
interpretation in all languages and written translation available in 
each non-English language, how to request auxiliary aids and services, 
and a toll-free and TTY/TDY telephone number. We request comment on 
whether these requirements are sufficient to ensure the accessibility 
of the information for people receiving nursing facility or ICF/IID 
services and other interested parties.
    We are also proposing at Sec.  442.43(e) that we must report on our 
website (Medicaid.gov or a successor website) the information reported 
by States to us under Sec.  442.43(b). Specifically, we envision that 
we would update our website to provide information reported by each 
State on the percent of payments for Medicaid-covered services 
delivered by nursing facilities and ICF/IIDs that is spent on 
compensation to direct care workers and support staff (and, if added to 
the provision, information on median hourly wages) which would allow 
the information to be compared across States and providers. We also 
envision using data from State reporting in future iterations of the 
CMS Medicaid and CHIP Scorecard.\151\ We note that if, based on public 
comment, we add a requirement that States provide information about 
their payment rates for nursing facility and ICF/IID services, we would 
provide this information on our website as a way of providing easy-to-
find context for the other payment information reported by States. We 
currently do not intend to include the information on payment rates in 
the CMS Medicaid and CHIP Scorecard.
---------------------------------------------------------------------------

    \151\ CMS's Medicaid and CHIP Scorecard. Accessed at https://www.medicaid.gov/state-overviews/scorecard/index.html.
---------------------------------------------------------------------------

    We recognize that many States may need time to implement these 
requirements, including to amend provider agreements or managed care 
contracts, make State regulatory or policy changes, implement process 
or procedural changes, update information systems for data collection 
and reporting, or conduct other activities to implement these proposed 
payment transparency reporting requirements. We also expect that it 
would take a substantial amount of time for managed care plans and 
providers to establish the necessary systems, data collection tools, 
and processes necessary to collect the required information to report 
to States. As a result, we are proposing, at Sec.  442.43(f), to 
provide States with 4 years to implement these requirements in FFS 
delivery systems following the effective date of the final rule. This 
proposed timeline reflects feedback from States and other interested 
parties that it could take 3 to 4 years for States to complete any 
necessary work to amend State regulations, policies, operational 
processes, information

[[Page 61390]]

systems, and contracts to support implementation of the proposals 
outlined in this section. We invite comments on whether this timeframe 
is sufficient, whether we should require a shorter or longer timeframe 
(such as 3 or 5 years) to implement these provisions, and if a shorter 
or longer timeframe is recommended, the rationale for that shorter or 
longer timeframe.
    In the context of Medicaid coverage of nursing facility and ICF/IID 
services, we believe that the foregoing reasons for the reporting 
requirements proposed in this rule apply to the delivery of these 
services regardless of whether they are covered directly by the State 
on an FFS basis or by a managed care plan for its enrollees. 
Accordingly, we are proposing to apply the requirements at Sec.  442.43 
to both FFS and managed care delivery systems through incorporation by 
reference in a new regulation in 42 CFR part 438, which generally 
governs Medicaid managed care programs. Specifically, we propose to add 
a cross-reference to the requirements in proposed Sec.  438.72(a) to be 
explicit that States that include nursing facility and/or ICF/IID 
services in their MCO or PIHP contracts would have to amend their 
contracts to the extent necessary to comply with the requirements at 
Sec.  442.43 and propose at Sec.  442.43(b) that payments from MCOs and 
PIHPs count as ``Medicaid payments'' for purposes of those 
requirements. We believe this would make the obligations of States that 
implement LTSS programs through a managed care delivery system clear 
and consistent with the State obligations for Medicaid FFS delivery 
systems. Additionally, for States with managed care delivery systems 
under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) 
of the Act and that include coverage of nursing facility services and/
or ICF/IID services in the MCO's or PIHP's contract, we are proposing 
to provide States until the first managed care plan contract rating 
period that begins on or after the date that is 4 years after the 
effective date of the final rule to implement these requirements. We 
solicit feedback on the proposed application of the reporting 
requirement to managed care and the proposed effective date. We also 
invite comments on whether the proposed effective date timeframe is 
sufficient, whether we should require a longer timeframe (such as 5 
years) to implement these provisions, and if a longer timeframe is 
recommended, the rationale for that longer timeframe.
    We expect that, should we finalize these reporting requirements, we 
would establish new processes and forms for States to meet the 
reporting requirements, provide additional technical information on how 
States can meet the reporting requirements, and establish new templates 
consistent with requirements under the Paperwork Reduction Act. We 
invite comment on this approach, particularly regarding any additional 
guidance we would need to provide or actions we would need to take to 
facilitate States' implementation of these proposed provisions.
    Finally, in consideration of potential future rulemaking, we 
request comment on whether we should propose that States implement an 
interested parties' advisory group in parallel with proposed 
requirements at Sec.  447.203(b)(6) in the Ensuring Access to Medicaid 
Services proposed rule (88 FR 29260). Per the discussion in the 
Ensuring Access to Medicaid Services proposed rule at 88 FR 28024, we 
are proposing at Sec.  447.203(a)(6) to require States to establish an 
interested parties advisory group to advise and consult on the 
sufficiency of FFS rates paid to direct care workers providing certain 
HCBS. We would be interested in hearing from the public if we should 
consider developing requirements for States to establish a similar 
group to advise and consult on nursing facility and ICF/IID service 
rates.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comments before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In analyzing information collection requirements (ICRs), we rely 
heavily on wage and salary information. Unless otherwise indicated, we 
obtained all salary information from the May 2022 National Occupational 
Employment and Wage Estimates, BLS at https://www.bls.gov/oes/current/oes_nat.htm. We have calculated the estimated hourly rates in this 
proposed rule based upon the national mean salary for that particular 
position increased by 100 percent to account for overhead costs and 
fringe benefits. The wage and salary data from the BLS do not include 
health, retirement, and other fringe benefits, or the rent, utilities, 
information technology, administrative, and other types of overhead 
costs supporting each employee. The HHS wide guidance on preparation of 
regulatory and paperwork burden estimates states that doubling salary 
costs is a good approximation for including these overhead and fringe 
benefit costs.
    Table 6 presents the BLS occupation code and title, the associated 
LTC facility staff position in this regulation, the estimated average 
or mean hourly wage, and the adjusted hourly wage (with a 100 percent 
markup of the salary to include fringe benefits and overhead costs). 
Where available, the mean hourly wage for Nursing Care Facilities 
(Skilled Nursing Facilities) \152\ was used.
---------------------------------------------------------------------------

    \152\ https://www.bls.gov/oes/current/naics4_623100.htm.

[[Page 61391]]



                             Table 6--Summary Information of Estimated Hourly Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                Adjusted hourly
                                                                                                wage (with 100%
                                                               Associated                      markup for fringe
         Occupation code            BLS occupation title    position title in    Mean hourly       benefits &
                                                             this regulation    wage ($/hour)    overhead) ($/
                                                                                               hour) (rounded to
                                                                                                nearest dollar)
----------------------------------------------------------------------------------------------------------------
29-1141.........................  Registered Nurses        Registered Nurse..          $37.11                $74
                                   (Nursing Care
                                   Facilities (Skilled
                                   Nursing Facilities)).
11-9111.........................  Medical and Health       Director of                  49.91                100
                                   Services Managers        Nursing (DON) and
                                   (Nursing Care            Administrator.
                                   Facilities (Skilled
                                   Nursing Facilities)).
29-1216.........................  General Internal         Medical Director..           93.90                188
                                   Medicine Physicians
                                   (General Medical and
                                   Surgical Hospitals).
43-6013.........................  Medical Secretaries and  Administrative               20.30                 41
                                   Administrative           Assistant.
                                   Assistants (General
                                   Medical and Surgical
                                   Hospitals).
29-1229.........................  Physician, All Other     Medical Director..          135.86                272
                                   (Specialty (except
                                   Psychiatric and
                                   Substance Abuse)).
29-1031.........................  Dieticians and           Food and Nutrition           31.63                 63
                                   Nutritionists.           Manager.
                                  (Nursing Care
                                   Facilities (Skilled
                                   Nursing Facilities)).
11-3013.........................  Facilities Manager.....  Facilities Manager           50.95                102
29-2061.........................  Licensed Practical and   Licensed Nurse....           28.10                 56
                                   Licensed Vocational
                                   Nurses (Nursing Care
                                   Facilities (Skilled
                                   Nursing Facilities)).
31-1131.........................  Nursing Assistants       Certified Nursing            16.90                 34
                                   (Nursing Care            Assistance (CNA).
                                   Facilities (Skilled
                                   Nursing Facilities)).
----------------------------------------------------------------------------------------------------------------

    We are soliciting public comments on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. ICRs Regarding Sec.  483.35 Nursing Services

    At Sec.  483.35(a), we propose that each LTC facility would have to 
provide services by sufficient numbers of each of the following types 
of personnel identified in this section on a 24-hour basis to provide 
nursing care to all residents in accordance with resident care plans. 
Except when exempted under paragraph (g) of this section, licensed 
nurses, including but not limited to 0.55 hours per resident day of 
registered nurses; and other nursing personnel, including but not 
limited to 2.45 hours per resident day of NAs or, if necessary, LPNs. 
Except when waived under paragraph (e) of this section, each LTC 
facility must also have a RN on site 24 hours per day, for 7 days a 
week that is available to provide direct resident care.
    These proposed requirements would require each LTC facility to 
review and modify, as necessary, its policies and procedures regarding 
nurse staffing. We believe the review and modifications to the 
necessary policies and procedures would require activities by the 
director of nursing (DON), an administrator, and an administrative 
assistant. The DON and the administrator would need to review the 
requirements, as well as the facility assessment, to determine if any 
changes are were necessary to the policies and procedures and, if so, 
make those necessary changes. The DON would then need to work with a 
medical administrative assistant to ensure that those changes were made 
to the appropriate documents and ensure that all appropriate 
individuals in the facility were made aware of the changes. We estimate 
that these activities would require 2 burden hours for an administrator 
at a cost of $200 ($100 x 2), 3 hours for the DON at a cost of $300 
($100 x 3), and 1 hour for the administrative assistant at a cost of 
$41 ($41 x 1). Hence, for each LTC facility the burden estimate would 
be 6 hours (2 + 3+1) at a cost of $ 541 ($200 + $300 + $41). There are 
currently 14,688 LTC facilities. Thus, the burden for all LTC 
facilities would be 88,128 (14,688 x 6) hours at a cost of $7,946,208 
($541 x 14,688 LTC facilities).

B. ICRs Regarding Sec.  483.71 Facility Assessment

    For the proposed new section, Sec.  483.71 Facility assessment, we 
propose to relocate the existing requirements at Sec.  483.70(e) 
Facility assessment to the new Sec.  483.71. We also propose to modify 
certain specific requirements and add a third section that will set 
forth the activities for which we expect LTC facilities to use their 
facility assessments.
    We are proposing to relocate current Sec.  483.70(e)(1) (i) through 
(v) to Sec.  483.71(a)(1)(i) through (v). This section sets forth what 
the facility assessment must address or include, but is not limited to, 
regarding the facility's resident population. At Sec.  
483.71(a)(1)(ii), we propose to add ``using evidence-based, data-driven 
methods'' and ``behavioral health issues'' so that the requirement 
would now read, ``(ii) The care required by the resident population, 
using evidence-based, data driven methods that consider the types of 
diseases, conditions, physical and behavioral health issues, cognitive 
disabilities, overall acuity, and other pertinent facts that are 
present within that population;''. At Sec.  483.71(a)(1)(iii), we 
propose to add, ``and skill sets'' so the requirement reads, (iii) The 
staff competencies and skill sets that are necessary to provide the 
level and types of care needed for the resident population. We believe 
these modifications constitute clarifications in the requirements and 
are not new requirements for which the LTC facilities must comply. 
Hence, we will not be analyzing any new or additional burden related to 
these changes.
    We propose to relocate the current requirements at Sec.  
483.70(e)(2)(i) through (vi) to Sec.  483.71(a)(2)(i) through (vi). At 
Sec.  483.71(a)(2)(iii), we propose to add ``behavioral health'' so 
that the requirement reads, (iii) Services provided, such as physical 
therapy, pharmacy, behavioral health, and specific rehabilitation 
therapies. Behavioral health services requirements are set forth at 
Sec.  483.40 and are integral to the health of residents. All LTC 
facilities should be considering the behavioral health care needs of 
their residents. Hence, this change does not constitute a new 
requirement but a clarification. Hence, we will not be

[[Page 61392]]

analyzing any new or additional burden related to this change.
    We propose to add a new requirement at Sec.  483.71(a)(4) for LTC 
facilities to incorporate the input of facility staff and their 
representatives into their facility assessment. These staff categories 
include, but are not limited to, nursing home leadership, management, 
direct care staff and representatives and other service workers. We 
believe that LTC facilities already include many of these categories of 
individuals when they conduct or update their facility assessments. 
Thus, this requirement constitutes a clarification and not a new 
requirement. Hence, we will not be analyzing any new or additional 
burden related to this change.
    We propose to add new requirements at Sec.  483.71(b). These 
requirements set forth specific activities for which the LTC facilities 
would be expected to use their facility assessments. These assessments 
would inform staffing decisions to ensure that a sufficient number of 
staff with the appropriate competencies and skill sets necessary to 
care for its residents' needs as identified through resident 
assessments and plans of care as required in Sec.  483.35(a)(3); 
consider specific staffing needs for each resident unit in the 
facility, and adjust as necessary based on changes its to resident 
population; consider specific staffing needs for each shift, such as 
day, evening, night, and adjust as necessary based on any changes to 
its resident population; and, develop and maintain a plan to maximize 
recruitment and retention of direct care staff.
    We believe that LTC facilities are either already using their 
facility assessments for these activities or will be based upon the 
other requirements in this proposed rule, except for using their 
facility assessments to develop and maintain a plan to maximize 
recruitment and retention of direct care staff. Based upon our 
experience with LTC facilities, these facilities are already working on 
recruitment and retention of direct care staff. However, we also 
believe these facilities would need to review their current efforts to 
determine if there are opportunities to improve their efforts and, if 
so, decide how to do so. The LTC facility's facility assessment would 
require the development of a plan to maximize recruitment and retention 
and accomplish the associated tasks and would also be an invaluable 
tool in assessing and maintaining sufficient staff for their facility.
    The staff involved in developing this plan would vary by the type 
of care and services provided by the individual facilities. Some LTC 
facilities might have various therapists on staff, such as physical and 
occupational therapists. Others might employ psychologists, social 
workers, or complementary medicine or American Indian/Alaska Native 
Traditional Healers who provide behavioral health services to 
residents. When developing a recruitment and retention plan, we 
encourage LTC facilities to include participation, or at least input, 
from the various types of direct care staff in their facilities and 
representatives of these workers, although the hours worked by those 
staff cannot be used as substitutes for the direct care minimums for 
RNs and NAs required under this rule. All LTC facilities provide 24-
hour nursing services and the direct care nursing staff would include 
RNs, other licensed nurses (LPNs or LVNs), and nursing assistants 
(NAs). For the purpose of estimating the burden for developing a 
recruitment and retention plan, we estimate the burden for an 
administrator, the DON, and one individual from each of the nursing 
categories, an RN, LPN/LVN, and NA to develop the plan. These 
individuals would have to meet to develop a plan and then the 
administrator will need to obtain approval for the plan from the 
governing body. During the development process and after approval, an 
administrative assistant would need to provide support and ensure the 
plan is disseminated and save appropriately in the facility's records. 
We estimate that developing a recruitment and retention plan would 
require 6 hours for an administrator at a cost of $600 ($100 x 6); 6 
hours for the DON at a cost of $600 ($100 x 6); 4 hours for a 
registered nurse at a cost of $296 ($74 x 4); 2 hours for a LPN/LVN at 
a cost of $112 ($56 x 2); 2 hours for a nursing assistant at a cost of 
$68 ($34 x 2); and, 2 hours for an administrative assistant $82 ($41 x 
2). Thus, the burden for each LTC facility is 22 (6 + 6 + 4 + 2 + 2 + 
2) hours at an estimated cost of $1,758 ($ 600 + $600 + $296 + $112 + 
$68 + 82). For all 14,688 LTC facilities the burden would be 323,136 
hours (14,688 LTC facilities x 22) at an estimated cost of $25,821,504 
($1,758 x 14,688 LTC facilities). We are requesting comment on our 
estimated number of burden hours for the proposal for each of the 
activities and total annual burden and cost for each facility.
    Hence, the total estimated burden for the ICRs in part 483 is 
411,264 (88,128 + 323,136) hours at a cost of $33,767,712 ($7,946,208+ 
$25,821,504). The burden will be included in this revised Information 
Collection Request under the OMB control number 0938-1363; Expiration 
date: April 30, 2026.

C. ICR Related to Medicaid Institutional Payment Transparency

1. Wage Estimates
    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics (BLS) May 2022 National Occupational Employment and Wage 
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 7 presents BLS's mean hourly wage, 
our estimated cost of fringe benefits and other indirect costs 
(calculated at 100 percent of salary), and our adjusted hourly wage.

                          Table 7--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                    Occupation      Mean hourly    benefits and      Adjusted
                Occupation title                       code         wage ($/hr)    overhead ($/   hourly wage ($/
                                                                                        hr)             hr)
----------------------------------------------------------------------------------------------------------------
Administrative Services Manager.................         11-3012           55.59           55.59          111.18
Chief Executive.................................         11-1011          118.48          118.48          236.96
Compensation, Benefits, and Job Analyst.........         13-1141           36.50           36.50           73.00
Computer Programmer.............................         15-1251           49.42           49.42           98.84
General and Operations Manager..................         11-1021           59.07           59.07          118.14
Management Analyst..............................         13-1111           50.32           50.32          100.64
Training and Development Specialist.............         13-1151           33.59           33.59           67.18
----------------------------------------------------------------------------------------------------------------


[[Page 61393]]

    For States and the private sector, our employee hourly wage 
estimates have been adjusted by a factor of 100 percent. This is 
necessarily a rough adjustment, both because fringe benefits and other 
indirect costs vary significantly across employers, and because methods 
of estimating these costs vary widely across studies. Nonetheless, we 
believe that doubling the hourly wage to estimate total cost is a 
reasonably accurate estimation method.
    To estimate the financial burden on States related to the proposed 
Medicaid Institutional Payment Transparency Reporting provisions 
(discussed below), it was important to consider the Federal 
government's contribution to the cost of administering the Medicaid 
program. The Federal government provides funding based on a Federal 
medical assistance percentage (FMAP) that is established for each 
State, based on the per capita income in the State as compared to the 
national average. FMAPs range from a minimum of 50 percent in States 
with higher per capita incomes to a maximum of 83 percent in States 
with lower per capita incomes. For Medicaid, all States receive a 50 
percent FMAP for administration. States also receive higher Federal 
matching rates for certain systems improvements, redesign, or 
operations. Taking into account the Federal contribution to the costs 
of administering the Medicaid programs for purposes of estimating State 
burden with respect to collection of information, we elected to use the 
higher end estimate that the States would contribute 50 percent of the 
costs, even though the burden would likely be much smaller. We are 
requesting comment on our estimated number of burden hours for the 
proposal for each of the activities and total annual burden and cost 
for each facility.
3. Proposed Information Collection Requirements (ICRs)
    The following proposed changes will be submitted to OMB for their 
approval when our survey instrument has been developed; we are using 
feedback from this proposed rule to inform the development of the 
survey instrument. The survey instrument and burden will be made 
available to the public for their review under the standard non-rule 
PRA process which includes the publication of 60- and 30-day Federal 
Register notices. In the meantime, we are setting out our preliminary 
burden figures (see below) as a means of scoring the impact of this 
rule's proposed changes. The availability of the survey instrument and 
more definitive burden estimates will be announced in both Federal 
Register notices. The CMS ID number for that collection of information 
request is CMS-10851 (OMB control number 0938-TBD). Since this would be 
a new collection of information request, the OMB control number has yet 
to be determined (TBD) but will be issued by OMB upon their approval of 
the new collection of information request. Note that we intend that the 
following proposed changes associated with Sec. Sec.  442.43(b), (c), 
and (d), discussed later in this section, will be submitted to OMB for 
review as a single PRA package under control number 0938-TBD (CMS-
10851).
a. State and Provider Burden Under Sec.  442.43(b) and (c)--Payment 
Transparency Reporting
    As discussed in section III. of this proposed rule, under our 
authority at sections 1902(a)(6) and 1902(a)(30)(A) with respect to 
FFS, and sections 1902(a)(4) and 1932(c) of the Act with respect to 
managed care, we are proposing new reporting requirements at Sec.  
442.43(b) for States to report annually on the percent of payments for 
Medicaid-covered services delivered by nursing facilities and ICF/IIDs 
that are spent on compensation for direct care workers and support 
staff. (Our proposed definitions of who is included in direct care 
workers and support staff, at proposed Sec. Sec.  442.43(a)(2) and (3), 
respectively, are discussed in the preamble in section III. of this 
proposed rule.) The intent of this proposed requirement is for States 
to report separately, by delivery system and at the provider level, on 
the percent of payments for nursing facility services that are spent on 
compensation to direct care workers, the percent of payments for 
nursing facility services that are spent on compensation to support 
staff, the percent of payments for ICF/IID services that are spent on 
compensation to direct care workers, and the percent of payments for 
ICF/IID services that are spent on compensation to support staff. We 
propose to add a cross-reference to the requirements in proposed Sec.  
438.72 to specify that States that include nursing facility and ICF/IID 
services in their contracts with managed care organizations (MCOs) or 
prepaid inpatient health plans (PIHPs) would have to comply with the 
requirements at Sec.  442.43(b). Where they appear, references to the 
proposed requirements at Sec.  442.43(b) apply to both FFS and managed 
care delivery systems.
    We are considering adding to the proposed reporting requirements 
additional elements for States to report on median hourly compensation 
for direct care workers and median hourly compensation for support 
staff, in addition to the percent of Medicaid payments going to overall 
compensation for these workers. Although we may not finalize these 
additional reporting requirements, we will include them in our cost 
estimate to avoid underestimating the costs of this proposal. If 
finalized, we expect that these additional reporting requirements would 
also apply to both FFS and managed care delivery systems.
    We are also considering adding at Sec.  442.43(c) a provision 
requiring that States make publicly available information about the 
underlying FFS payment rates themselves for nursing facility and ICF/
IID services. If the proposal was finalized, we would require that 
States report a single average statewide FFS per diem rate (one 
reported rate for nursing facility services and one reported rate for 
ICF/IID services) as part of the reporting requirement required at 
Sec.  442.43(b). Again, to avoid underestimating, we are including the 
estimated cost of this potential additional requirement in our cost 
estimates.
(1) State Institutional Payment Transparency Reporting Requirements and 
Burden
    The burden associated with the proposed reporting requirements 
would affect all 51 States (including Washington DC). While not all 
States cover ICF/IID services (because it is an optional Medicaid 
benefit), all States must offer Medicaid nursing facility services 
(because it is a mandatory Medicaid benefit). Thus, we anticipate that 
all 51 States (including Washington, DC) would participate in the 
reporting requirements proposed at Sec.  442.43(b). Additionally, three 
territories (Guam, Puerto Rico, and the U.S. Virgin Islands) are 
required to include nursing facility services in their State plans, and 
thus will be included in these calculations as well.\153\ While we will 
include these territories in our cost estimates, we will continue to 
refer to the affected entities collectively as ``States''. We estimate 
both a one-time and ongoing burden to States to implement these 
requirements at the State level.
---------------------------------------------------------------------------

    \153\ Note that due to waiver under section 1902(j) of the 
Social Security Act, American Samoa and the Commonwealth of the 
Northern Marianas Islands are not required to include nursing 
facility services in their State plans and thus are not included in 
these estimates. Additionally, no territory currently includes the 
optional ICF/IID benefit in their State plan.

---------------------------------------------------------------------------

[[Page 61394]]

One-Time Reporting Requirements and Burden (Sec.  442.43(b)): States
    Under proposed Sec.  442.43(b) and (c), we anticipate as one-time 
burdens that States, through their designated State Medicaid agency, 
would have to: (1) draft new policy describing the State-specific 
reporting process (one-time); (2) update any related provider manuals 
and other policy guidance (one-time); (3) build, design, and 
operationalize an electronic system for data collection and aggregation 
(one-time); (4) identify the information that would be needed to report 
the State's per diem rates, if that additional proposal is finalized 
(one-time); and (5) develop and conduct an initial training for 
providers on the reporting requirement and State-developed reporting 
system (one-time). We note that we are not proposing to require that 
States update their Medicaid State plans as part of this reporting 
requirement, and thus we are not estimating a burden associated with 
State plan amendments.
    With regard to this one-time burden for States, we estimate it 
would take: 40 hours at $111.18/hr. for an administrative services 
manager to draft new policy describing the State-specific reporting 
process; 14 hours at $100.64/hr. for a management analyst to update any 
related provider manuals and other policy guidance; an additional 1 
hour at $100.64/hr. for a management analyst to identify what 
information will be needed to report a FFS per diem rate for nursing 
facility and ICF/IID services,\154\ if the additional reporting 
requirement is finalized; 25 hours at $98.84/hr. for a computer 
programmer to build, design, and operationalize an electronic system 
for data collection on the percent of Medicaid payments going to 
compensation and (if finalized) median hourly compensation, including 
data aggregation and stratification by provider, provider type, and 
worker type (direct care worker or support staff); 30 hours at $67.18/
hr. for a training and development specialist to develop and conduct 
training for providers on the reporting requirement and system; 3 hours 
at $118.14/hr. for a general and operations manager to review and 
approve policy updates, provider agreement updates, and training 
materials; and 1 hour at $236.96/hr. for a chief executive to review 
and approve all operations associated with this requirement.
---------------------------------------------------------------------------

    \154\ As discussed in section III. of this proposed rule, if 
finalized, the proposal to report per diem rates for nursing 
facility and ICF/ID services would only be applied to FFS rates. If 
finalized, this proposal would not apply to States that deliver 
nursing facility and ICF/IID services solely through managed care. 
However, some States with managed care delivery systems still pay 
for some LTSS under a FFS delivery system. For the purposes of this 
estimate, we are assuming all States will be participating in this 
reporting requirement, even though the requirement might apply to 
fewer than 54 States upon implementation.
---------------------------------------------------------------------------

    In addition to these activities outlined above, States may also 
have to update managed care contracts to reflect the new reporting 
requirement and provide managed care-specific guidance on the reporting 
requirement. Recent data indicates that 24 States provide at least some 
long-term services through managed care.\155\ For the managed care-
specific burden, we estimate 10 hours at $111.18/hr. for an 
administrative services manager to draft updates to managed care 
contracts. (We anticipate that all other State activities associated 
with managed care plans would be reflected in the activities described 
previously in this section.)
---------------------------------------------------------------------------

    \155\ Data taken from Centers for Medicare & Medicaid Services, 
``Managed Long Term Services and Supports (MLTSS) Enrollees,'' 
available at https://data.medicaid.gov/dataset/5394bcab-c748-5e4b-af07-b5bf77ed3aa3.
---------------------------------------------------------------------------

    In aggregate, we estimate a one-time burden of 6,396 hours [(114 
hr. x 54 States) + (10 x 24 States)]. We estimate a cost of $595,867 
(54 States x [(40 hr. x $111.18) + (15 hr. x $100.64) + (25 hr. x 
$98.84) + (30 hr. x $67.18) + (3 hr. x $118.14) + (1 hr. x $236.96)]), 
with an additional $26,683 for managed care-related costs (24 States x 
[10 hr. x $100.64]). The total cost is estimated at $622,551 ($595,867 
+ $26,683). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of the cost would be $311,275 
($622,551 x 0.50).

      Table 8--Summary of One-Time Burden for States for the Medicaid Institutional Payment Transparency Reporting Requirements at Sec.   442.43(b)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total
               Requirement                    Number       Total               Frequency            response     time     Wage ($/    Total      State
                                           respondents   responses                                   (hr.)      (hr.)       hr.)     cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft new policy describing the State-              54           54  Once........................         40      2,160     111.18    240,149    120,074
 specific reporting process.
Update any related provider manuals and             54           54  Once........................         14        756     100.64     76,084     38,042
 other policy guidance.
Identify information needed for per diem            54           54  Once........................          1         54     100.64      5,435      2,717
 rate reporting.
Build, design, and operationalize an                54           54  Once........................         25      1,350      98.84    133,434     66,717
 electronic system for data collection,
 aggregate, and stratify reporting.
Develop and conduct training for                    54           54  Once........................         30      1,620      67.18    108,832     54,416
 providers on the reporting requirement
 and system.
Review and approve policy updates and               54           54  Once........................          3        162     118.14     19,139      9,569
 training materials.
Review and approve all operations                   54           54  Once........................          1         54     236.96     12,796      6,398
 associated with this requirement.
Draft contract modifications for managed            24           24  Once........................         10        240     111.18     26,683     13,342
 care plans.
                                          --------------------------------------------------------------------------------------------------------------
    Total................................       Varies          402  Once........................     Varies      6,396     Varies    622,551    311,275
--------------------------------------------------------------------------------------------------------------------------------------------------------

Ongoing Reporting Requirements and Burden (Sec.  442.43(b)): States
    Under proposed Sec.  442.43(b), we estimate as ongoing burdens that 
States would: (1) notify and train nursing facility and ICF/IID 
providers about the annual reporting requirement, including the State-
level process for collecting data (ongoing); (2) collect information 
from providers annually (ongoing); (3) aggregate or stratify data as 
needed (ongoing); (4) derive percentages for compensation (ongoing); 
and (5) develop a report for CMS on an annual basis (ongoing).
    With regard to the ongoing burden, we estimate it would take: 8 
hours at $67.18/hr. for a training and development specialist to notify 
and train providers about annual reporting requirement; 2 hours at 
$100.64 for a management analyst to gather the State's information 
needed to include per diem

[[Page 61395]]

rates for the State's FFS nursing facility and ICF/IID services (if 
finalized); 6 hours at $98.84/hr. for a computer programmer to collect 
information from providers, aggregate data as needed, derive 
percentages for compensation, and develop a report for the State; 2 
hours at $118.14/hr. by a general and operations manager to review, 
verify, and submit the report to CMS; and 1 hour at $236.96/hr. for a 
chief executive to review and approve all operations associated with 
this requirement.
    In aggregate, we estimate an ongoing burden of 1,026 hours (19 hr. 
x 54 States) at a cost of $97,470 (54 States x [(8 hr. x $67.18) + (2 
hr. x $100.64) + (6 hr. x $98.84) + (2 hr. x $118.14) + (1 hr. x 
$236.96)]. Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be $48,735 
($97,470 x 0.50) per year.

      Table 9--Summary of Ongoing Burden for States for the Medicaid Institutional Payment Transparency Reporting Requirements at Sec.   442.43(b)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total
               Requirement                    Number       Total               Frequency            response     time     Wage ($/    Total      State
                                           respondents   responses                                   (hr.)      (hr.)       hr.)     cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notify and train providers about annual             54           54  Annually....................          8        416      67.18     29,022     14,511
 reporting requirement.
Gather information needed to report State           54           54  Annually....................          2        108     100.64     10,869      5,435
 FFS per diem rates.
Collect information from providers;                 54           54  Annually....................          6        312      98.84     32,024     16,012
 aggregate data as required; derive an
 overall percentage for compensation; and
 develop report for State.
Review, verify, and submit report to CMS.           54           54  Annually....................          2        104     118.14     12,759      6,380
Review and approve all operations                   54           54  Annually....................          1         52     236.96     12,796      6,398
 associated with this requirement.
                                          --------------------------------------------------------------------------------------------------------------
    Total................................           54          270  Annually....................     Varies      1,026     Varies     97,470     48,735
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Nursing Facility and ICF/IID Institutional Payment Transparency 
Reporting Requirements and Burden
    The burden associated with this proposed rule would affect nursing 
facility and ICF/IID providers in both FFS and managed care systems. We 
estimate both a one-time and ongoing burden to implement the reporting 
requirement proposed at Sec.  442.43(b).
    To estimate the number of nursing facility and ICF/IID providers 
that would be impacted by this proposed rule, we used data from the CMS 
Quality Certification and Oversight Reports (QCOR) system 
(qcor.cms.gov) to identify the total number of Medicaid-certified 
nursing facilities and ICF/IIDs in all States (including Washington DC) 
and the three territories that are required to include nursing facility 
services in their State plan. Data from QCOR indicates that in FY 2022, 
there were 14,194 freestanding Medicaid-certified nursing facilities 
(including facilities dually certified for both Medicare and Medicaid, 
and Medicaid-only facilities). Additionally, in FY 2022, there were 
5,713 ICF/IIDs. In total, we estimate 19,907 Medicaid-certified nursing 
facilities and ICF/IIDs that could be impacted by this proposed 
reporting requirement and may need to provide data to the State on what 
percentage of their Medicaid reimbursements for nursing facility and 
ICF/IID services went to direct care worker and support staff 
compensation.
    Under proposed Sec.  442.43(b), we anticipate that nursing 
facilities and ICF/IIDs would need to: (1) learn the State-specific 
reporting policies and process (one-time); (2) calculate compensation 
for each direct care worker and support staff if they do not already 
have that information readily available (one-time); and (3) build, 
design and operationalize an internal system for developing the report 
for the State (one-time). We note that we do not anticipate any 
additional burden on providers associated with the proposed additional 
reporting requirements (to report median hourly wages and the State's 
FFS per diem rates). We expect that States would be able to calculate 
median hourly wages based on the information collected from providers. 
We also believe the State, not, providers, would have the information 
needed to report the State's FFS per diem rates for nursing facility 
and ICF/IID services.
One-Time Reporting Requirements and Burden (Sec.  442.43(b)): Nursing 
Facility and ICF/IID Providers
    With regard to the one-time burden for providers, we estimate it 
would take: 10 hours at $73.00/hr. for a compensation, benefits, and 
job analysis specialist to learn the State-specific reporting policy 
and calculate compensation for each direct care worker and support 
staff; 10 hours at $98.84/hr. for a computer programmer to build, 
design, and operationalize an internal system for developing the report 
for the State; and 1 hour at $118.14/hr. for a general and operations 
manager to review and approve the reporting system. In aggregate, we 
estimate a one-time burden of 418,047 hours (19,907 facilities x 21 
hr.) at a cost of $36,560,002 (19,907 providers x [(10 hr. x $73.00) + 
(10 hr. x $98.84) + (1 hr. x $118.14)].

 Table 10--Summary of One-Time Burden for Nursing Facilities and ICF/IIDs for the Medicaid Institutional Payment Transparency Reporting Requirements at
                                                                    Sec.   442.43(b)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Time per    Total
               Requirement                   Number       Total              Frequency            response     time     Wage ($/   Total cost    State
                                          respondents   responses                                  (hr.)      (hr.)       hr.)        ($)      share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Learn State-specific reporting policy;         19,907       19,907  Once.......................         10    199,070      73.00   14,532,110        n/a
 calculate compensation for each direct
 care worker and support staff.
Build, design, and operationalize an           19,907       19,907  Once.......................         10    199,070      98.84   19,676,079        n/a
 internal system for developing the
 report for the State.
Review and approve reporting system.....       19,907       19,907  Once.......................          1     19,907     118.14    2,351,813        n/a
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................       19,907       59,721  Once.......................     Varies    418,047     Varies   36,560,002        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 61396]]

Ongoing Reporting Requirements and Burden (Sec.  442.43(b)): Nursing 
Facility and ICF/IID Providers
    With regard to the ongoing burden, we anticipate nursing facilities 
and ICF/IIDs would have to: (1) update compensation calculations to 
account for on-going staffing changes among direct care workers and 
support staff (in other words, ensure their system includes newly hired 
direct care workers or support staff and takes into account staff 
departures); (2) calculate the aggregated compensation of direct care 
workers and support staff as a percentage of their annual Medicaid 
claims (ongoing); and (3) report the information to the State annually 
(ongoing).
    We estimate it would take 8 hours at $73.00/hr. for a compensation, 
benefits, and job analysis specialist to update compensation 
calculations to account for staffing changes; 2 hours at $98.84/hr. for 
a computer programmer to calculate compensation, aggregate data, and 
report to the State as required; and 1 hour at $118.14/hr. for a 
general and operations manager to review, approve, and submit the 
report to the State. In aggregate, we estimate an on-going burden of 
218,977 hours (19,907 providers x 11 hr.) at a cost of $17,912,717 
(19,907 facilities x [(8 hr. x $73.00) + (2 hr. x $98.84) + (1 hr. x 
$118.14)].

Table 11--Summary of Ongoing Burden for Nursing Facility and ICF/IIDs for the Medicaid Institutional Payment Transparency Reporting Requirements at Sec.
                                                                         442.43(b)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Time per    Total
               Requirement                   Number       Total              Frequency            response     time     Wage ($/   Total cost    State
                                          respondents   responses                                  (hr.)      (hr.)       hr.)        ($)      share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Account for staffing changes among             19,907       19,907  Annually...................          8    159,256      73.00   11,625,688        n/a
 employees and contracted employees.
Calculate compensation, aggregate data,        19,907       19,907  Annually...................          2     39,814      98.84    3,935,216        n/a
 and report to the State.
Review, approve, submit report to the          19,907       19,907  Annually...................          1     19,907     118.14    2,351,813        n/a
 State.
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................       19,907       59,721  Annually...................     Varies    218,977     Varies   17,912,717        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. State Website Posting Requirements and Burden (Sec.  442.43(d))
    At Sec.  442.43(d), we propose to require States to operate a 
website that meets the availability and accessibility requirements at 
Sec.  435.905(b) of this chapter and that provides the results of the 
newly proposed reporting requirements in Sec.  442.43(b). We also 
propose at Sec.  442.43(d) that States must verify, no less than 
quarterly, the accurate function of the website and the timeliness of 
the information and links.
    As noted above, we anticipate that this provision would affect all 
51 States (including Washington, DC) and the territories required to 
have nursing facility services in their State plans which we refer to 
collectively as ``States.''. We estimate both a one-time and ongoing 
burden to implement these requirements at the State level, which would 
be the same regardless of whether the State offers nursing facility and 
ICF/IID services through FFS or managed care systems. In developing our 
burden estimate, we assumed that States would provide the data and 
information that States are required to report under newly proposed 
Sec.  442.43(d) by adding to an existing website, rather than 
developing an entirely new website to meet this requirement. We note 
that we are not proposing to require that States update their Medicaid 
State plans as part of this reporting requirement and are not 
estimating a burden associated with State plan amendments. We are also 
not anticipating an additional website burden associated with the 
possible additional reporting requirements (to report median hourly 
wage and to report the State's FFS per diem rates) discussed previously 
in this section as this information, if finalized, would be integrated 
into the other website posting activities.
One Time Website Posting Requirements and Burden (Sec.  442.43(d)): 
States
    With regard to the one-time burden, based on the website 
requirements, we estimate it would take: 10 hours at $111.18/hr. for an 
administrative services manager to determine the content of the 
website; 30 hours at $98.84/hr. for a computer programmer to develop 
the website; 1 hour at $118.14/hr. for a general and operations manager 
to review and approve the website; and 1 hour at $236.96/hr. for a 
chief executive to review and approve the website. In aggregate, we 
estimate a one-time burden of 2,268 hours (54 States x 42 hr.) at a 
cost of $239,333 (54 States x [(10 hr. x $111.18) + (30 hr. x $98.84) + 
(1 hr. x $118.14) + (1 hr. x $236.96)]. Taking into account the Federal 
contribution to Medicaid administration, the estimated State share of 
this cost would be $119,667 ($239,333 x 0.50) per year.

                      Table 12--Summary of the One-Time Burden for States for the Website Posting Requirements at Sec.   442.43(f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
               Requirement                    Number       Total               Frequency            response     time     Wage ($/    Total    share ($)/
                                           respondents   responses                                   (hr.)      (hr.)       hr.)     cost ($)     year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Determine content of website.............           54           54  Once........................         10        540     111.18     60,037     30,019
Develop website..........................           54           54  Once........................         30      1,620      98.84    160,121     80,060
Review and approve the website at the               54           54  Once........................          1         54     118.14      6,380      3,190
 management level.
Review and approve the website at the               54           54  Once........................          1         54     236.96     12,796      6,398
 executive level.
                                          --------------------------------------------------------------------------------------------------------------
    Total................................           54          216  Once........................     Varies      2,268     Varies    239,333    119,667
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 61397]]

Ongoing Website Posting Requirements and Burden (Sec.  442.43(d)): 
States
    With regard to the States' ongoing burden related to the website 
requirement, per quarter we estimate it would take: 2 hours at $111.18/
hr. for an administrative services manager to provide any updated data 
and information for posting and to verify the accuracy of the website; 
8 hours at $98.84/hr. for a computer programmer to make any needed 
updates to the website; 1 hour at $118.14/hr. for a general and 
operations manager to review and approve the website; and 1 hour at 
$236.96/hr. for a chief executive to review and approve the website. In 
aggregate, we estimate an ongoing annual burden of 2,592 hours (12 hr. 
x 54 States x 4 quarters) at a cost of $295,527(54 States x 4 quarters 
x [(2 hr. x $111.18) + (8 hr. x $98.84) + (1 hr. x $118.14) + (1 hr. x 
$236.96)]. Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be 
$147,763 ($295,527 x 0.50) per year.

                       Table 13--Summary of the Ongoing Burden for States for the Website Posting Requirements at Sec.   442.43(f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total
               Requirement                    Number       Total               Frequency            response     time     Wage ($/    Total      State
                                           respondents   responses                                   (hr.)      (hr.)       hr.)     cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Provide updated data and information for            54          216  Quarterly...................          2        432     111.18     48,030     24,015
 posting and verify the accuracy of the
 website.
Update website...........................           54          216  Quarterly...................          8      1,728      98.84    170,796     85,398
Review and approve website at the                   54          216  Quarterly...................          1        216     118.14     25,518     12,759
 management level.
Review and approve website at the                   54          216  Quarterly...................          1        216     236.96     51,183     25,592
 executive level.
                                          --------------------------------------------------------------------------------------------------------------
    Total................................           54          864  Quarterly...................     Varies      2,592     Varies    295,527    147,763
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Burden Estimate Summary

                                                      Table 14--Summary of Annual Burden Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Total       Hourly                                  Total
 Regulation section(s)/ICR provision    Number of    Number of   Time per response (hrs)     time     labor rate    Total labor     State    beneficiary
                                       respondents   responses                              (hr.)      ($/hr.)       cost ($)     share ($)    cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   442.43(b) One-Time Burden to         Varies          402  Varies.................      6,396       Varies         622,251    311,275            0
 States (Table 8) (Payment
 Transparency Reporting).
Sec.   442.43(b) Ongoing Burden to              54          270  Varies.................      1,026       Varies          97,470     48,735            0
 States (Table 9) (Payment
 Transparency Reporting--Annual).
Sec.   442.43(b) One-Time Burden to         19,907       59,721  Varies.................    418,047       Varies      36,560,002        n/a            0
 Providers (Table 10) (Payment
 Transparency Reporting).
Sec.   442.43(b) Ongoing Burden to          19,907       59,721  Varies.................    218,977       Varies      17,912,717        n/a            0
 Providers (Table 11) (Payment
 Transparency Reporting--Annual).
Sec.   442.43(f) One-Time Burden to             54          216  Varies.................      2,268       Varies         239,333    119,667            0
 States (Table 12) (Website Posting).
Sec.   442.43(f) Ongoing Burden to              54          864  Varies.................      2,592       Varies         295,527    147,763            0
 States (Table 13) (Website Posting--
 Quarterly).
                                      ------------------------------------------------------------------------------------------------------------------
    Total............................       Varies      121,194  Varies.................    649,306       Varies      55,727,300    627,440            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments must be received on/by October 31, 2023.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VI. Regulatory Impact Analysis

A. Statement of Need

1. Minimum Nurse Staffing
    With respect to the requirements for minimum nurse staffing in LTC 
facilities, sections 1819 and 1919 of the Act, authorize the Secretary 
to issue requirements for participation in Medicare and Medicaid, 
including such regulations as may be necessary to protect the health 
and safety of residents (sections 1819(d)(4)(B) and 1919(d)(4)(B) of 
the Act). Such regulations are codified in the implementing regulations 
at 42 CFR part 483, subpart B.
    Approximately 1.4 million Americans are residents in LTC facilities 
with Medicare and Medicaid serving as the payor for most 
residents.\156\ As we have discussed in detail in sections II. and III. 
of this proposed rule, a large body of quantitative and qualitative 
research suggests that adequate nurse staffing is vital for ensuring 
residents' health and safety. More specifically, there is a positive 
association between the number of hours of care that a resident 
receives each day and resident health and safety.157 158 159 
Research also suggests that there is a relationship between inadequate 
staffing and nursing staff burnout, which can lead to high

[[Page 61398]]

employee turnover.\160\ High employee turnover, in turn, can lead to 
lower continuity of resident care.
---------------------------------------------------------------------------

    \156\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-service-type-reports/cms-program-statistics-medicare-skilled-nursing-facility.
    \157\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing 
Facility Staffing Shortages During the COVID-19 Pandemic. Apr 04, 
2022. Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \158\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \159\ Min A, Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
    \160\ Kelly LA, Gee PM, Butler RJ. Impact of nurse burnout on 
organizational and position turnover. Nurs Outlook. 2021 Jan-
Feb;69(1):96-102. doi: 10.1016/j.outlook.2020.06.008. Epub 2020 Oct 
4. PMID: 33023759; PMCID: PMC7532952.
---------------------------------------------------------------------------

    During our regular interactions with State Medicaid agencies, 
provider groups, and beneficiary advocates, we have observed that all 
these interested parties routinely express the concern that chronic 
understaffing in LTC facilities is making it difficult for residents to 
receive high quality care. Low quality care also has a negative impact 
on Medicare and Medicaid leading to higher spending due to more 
hospitalizations and unplanned Emergency Department 
visits.161 162 163 As we have noted throughout this rule, 
the available evidence suggests that a wide range of requirements for 
LTC facility staff could increase the quality of care in LTC 
facilities. We also recognized, however, that staffing in the long-term 
care sector is still recovering from the COVID-19 pandemic that saw a 
large number of employees leave the sector, leading to concerns about 
resident access to care. In response to these concerns, and after 
evaluating a wide range of research and stakeholder feedback, we 
developed a proposed 24/7 on-site RN requirement and minimum RN and NA 
HPRD requirements that aim to increase resident safety and quality of 
care while preserving resident access to care.
---------------------------------------------------------------------------

    \161\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing 
Facility Staffing Shortages During the COVID-19 Pandemic. Apr 04, 
2022. Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \162\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \163\ Min A, Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
---------------------------------------------------------------------------

    Specifically, we are proposing that LTC facilities provide RN 
coverage onsite 24 hours per day, 7 days a week (24/7 RN). In addition, 
we are proposing that they provide a minimum of 0.55 RN and 2.45 NA 
hours of care per resident day (HPRD). We note that, as discussed in 
section II above, while the 0.55 and 2.45 HPRD standards were developed 
using case-mix adjusted data sources, the standards themselves will be 
implemented and enforced independent of a facility's case-mix. In other 
words, facilities must meet the 0.55 RN and 2.45 NA HPRD standards, 
regardless of the individual facility's patient case-mix. Requiring 24/
7 RN and a minimum number of hours of RN and NA hours of care for each 
resident will help protect resident health and safety by ensuring that 
all facilities provide a minimal level of staff care to address 
residents' health and safety needs. These standards reflect only the 
minimum level of staffing required and all LTC facilities must provide 
adequate staffing to meet their specific population's needs based on 
their facility assessments.
2. Medicaid Institutional Payment Transparency Reporting
    Millions of Americans, including children and adults of all ages, 
receive Medicaid-covered long-term services and supports (LTSS) because 
of disabling conditions, chronic illness, and other factors. Medicaid 
is the largest payer nationally of LTSS. In 2019, 1.5 million Medicaid 
beneficiaries received nursing facility or intermediate care facility 
for individuals with intellectual disability (ICF/IID) services,\164\ 
which accounted for over $61 billion in Medicaid expenditures, or 13 
percent of the $478 billion in total Medicaid expenditures for that 
year.\165\
---------------------------------------------------------------------------

    \164\ Kim, Min-Young, Edward Weizenegger, and Andrea Wysocki. 
Medicaid Beneficiaries Who Use Long-Term Services and Supports: 
2019. Chicago, IL: Mathematica, July 22, 2022. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf. Disclaimer: This document contains links 
to non-United States Government websites. We are providing these 
links because they contain additional information relevant to the 
topic(s) discussed in this document or that otherwise may be useful 
to the reader. We cannot attest to the accuracy of information 
provided on the cited third-party websites or any other linked 
third-party site after the date when we accessed them. We are 
providing these links for reference only; linking to a non-United 
States Government website does not constitute an endorsement by CMS, 
HHS, or any of their employees of any products presented on the 
website. Also, please be aware that the privacy protections 
generally provided by United States Government websites do not apply 
to third-party sites.
    \165\ Murray, Caitlin, Alena Tourtellotte, Debra Lipson, and 
Andrea Wysocki. Medicaid Long Term Services and Supports Annual 
Expenditures Report: Federal Fiscal Year 2019. Chicago, IL: 
Mathematica, December 9, 2021. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltssexpenditures2019.pdf.
---------------------------------------------------------------------------

    Through our regular interactions with State Medicaid agencies, 
provider groups, and beneficiary advocates, we have observed that all 
these interested parties routinely express the concern that 
understaffing in facilities and high rates of worker turnover of direct 
care workers make it difficult to have the sufficient workforce of 
well-trained and qualified staff needed to help ensure access to high-
quality institutional services for people with disabilities and older 
adults. Further, demand for direct care workers is expected to continue 
rising due to the growing needs of the aging 
population.166 167
---------------------------------------------------------------------------

    \166\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \167\ Centers for Medicare & Medicaid Services. November 2020. 
Long-Term Services and Supports Rebalancing Toolkit. Accessed at 
https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
---------------------------------------------------------------------------

    As discussed in sections II. and III. of this proposed rule, 
anecdotal, quantitative, and qualitative evidence indicates that 
consistent, adequate direct care nurse staffing is vital to residents' 
health and safety. Worker turnover or understaffing also can reduce the 
efficiency of Medicaid payment for services, most clearly when the 
payment methodology is based on the actual cost of delivering services 
and such costs are increased due to reliance on overtime and temporary 
staff, which can have higher hourly costs than non-overtime wages paid 
to permanent staff. Further, understaffing can reduce quality of care, 
which can lead to poorer outcomes for people in institutional settings 
and result in costly emergency department visits and 
hospitalizations.168 169 170 Accordingly, understaffing can 
reduce the cost-effectiveness of Medicaid institutional services.
---------------------------------------------------------------------------

    \168\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing 
Facility Staffing Shortages During the COVID-19 Pandemic. Apr 04, 
2022. Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \169\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \170\ Min A, Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
---------------------------------------------------------------------------

    In response to these concerns about the institutional workforce, we 
are proposing new Federal reporting requirements that are intended to 
promote public transparency around States' statutory obligation under 
section 1902(a)(30)(A) of the Act and around the quality requirements 
in section 1932(c) of the Act for services furnished through managed 
care

[[Page 61399]]

organizations (MCOs) (as well as for prepaid inpatient health plans 
(PIHPs). We do so under our authority at section 1902(a)(4)), to make 
Medicaid payments that are sufficient to enlist enough providers so 
that high-quality LTSS are available to the beneficiaries who want and 
require such care. We are also relying on our authority under section 
1902(a)(6) of the Act, which requires State Medicaid agencies to make 
such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports.
    Specifically, we are proposing to require that State Medicaid 
agencies report annually, at the facility level and by delivery system 
(if applicable), on the portion of payments to nursing facility and 
ICF/IID services that are spent on compensation for the direct care and 
support staff workforce.\171\ We are also proposing that States make 
this information available to the public by posting the information on 
a website. We are focusing on this compensation proposal because many 
direct care workers and support staff earn low wages and receive 
limited benefits.\172\ Evidence suggests that there is a connection 
between wages and high rates of turnover among some workers in the 
institutional workforce.\173\ In order to develop relevant policies to 
support high quality care for Medicaid beneficiaries, we first need 
clear, consistent data from States and facilities about the current 
percent of Medicaid payments going to the compensation of direct care 
workers and support staff. Data regarding the percent of Medicaid 
payments going to compensation of direct care workers and support staff 
is not currently being reported to CMS.
---------------------------------------------------------------------------

    \171\ Throughout this discussion, we use the term ``States'' to 
include all States, Washington, DC, and any territories that include 
nursing facility services or ICF/IID services in their State plan.
    \172\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \173\ Sharma, H. and Liu, X. Association between wages and 
nursing staff turnover in Iowa. Innov Aging. 2022; 6(4): igac004. 
Published online 2022 Feb 5. doi: 10.1093/geroni/igac004.
---------------------------------------------------------------------------

B. Overall Impacts

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA, 
September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA, March 
22, 1995; Pub. L. 104-4), and Executive Order 13132 on Federalism 
(August 4, 1999).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 14094 entitled ``Modernizing Regulatory Review'' (hereinafter, 
the Modernizing E.O.) amends section 3(f)(1) of Executive Order 12866 
(Regulatory Planning and Review). The amended section 3(f) of Executive 
Order 12866 defines a ``significant regulatory action'' as an action 
that is likely to result in a rule: (1) having an annual effect on the 
economy of $200 million or more in any 1 year (adjusted every 3 years 
by the Administrator of OIRA for changes in gross domestic product), or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, territorial, or tribal governments 
or communities; (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raising legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in this Executive order, as specifically 
authorized in a timely manner by the Administrator of OIRA in each 
case.
    A regulatory impact analysis (RIA) must be prepared for regulatory 
actions with significant effects as per section 3(f)(1) ($200 million 
or more in any 1 year). Accordingly, we have prepared a Regulatory 
Impact Analysis that to the best of our ability presents the costs and 
benefits of the rulemaking.
    For this proposed rule, we have calculated the annual cost of the 
proposed minimum staffing requirements in Table 20 hours based on hours 
per resident day in CY 2021 dollars, assuming the implementation and 
enforcement of these requirements as being applied independent of a 
facility's case-mix. We estimate that the aggregate impact of the 
staffing-related provisions proposed in this rule, which includes a 
phased-in implementation of a requirement for 24 hours per day, 7 days 
per week RN onsite coverage, as well as the 0.55 RN and 2.45 NA minimum 
HPRD requirements, will result in an estimated cost of approximately 
$32 million in year 1, $246 million in year 2, $4.06 billion in year 3, 
with costs increasing to $5.7 billion by year 10. We estimate the total 
cost over 10 years will be $40.6 billion with an average annual cost of 
$4.06 billion.
    Additionally, we have estimated in Table 30 the economic impact of 
the proposed requirement that States report, by facility and by 
delivery system (if applicable), on the percentage of Medicaid payments 
being spent on compensation for direct care workers and support staff 
delivering Medicaid-covered nursing facility and ICF/IID services. We 
are proposing that these requirements would become effective 4 years 
after finalization. We estimate an initial implementation cost of 
$9,355,472 for years 1 to 4 (resulting in total initial implementation 
costs of $37,421,886) and ongoing annual costs of $18,305,713 per year 
starting in year 5.

C. Detailed Economic Analysis

1. Impacts for LTC Minimum Staff Requirement
a. Nursing Services (Sec.  483.35)
    We are proposing to make two changes to the existing requirements 
for Nursing Services for LTC facilities at Sec.  483.35. We are 
proposing to require facilities to provide RN coverage onsite 24 hours 
per day, 7 days a week and to meet a minimum staffing standard of 0.55 
RN and 2.45 NA HPRD. We note that these estimates do not include the 
exemption criteria, which could reduce the rule's cost (including cost 
associated with potential LTC facility closure or reduction in patient 
load capacity per facility) and benefits, based on the use of 
exemptions.
(1) RN On Site 24 Hours a Day, 7 Days a Week (24/7 RN)
    To estimate the cost to the industry for the RN on site 24 hours a 
day, 7 days a week (24/7 RN) requirement we first summed the current 
annual RN salary cost for each facility. We then subtracted this amount 
from the estimated annual RN salary cost that the facility will incur 
to meet the new requirement.
    To measure the current RN staff cost to the industry, we estimated 
the total number of RNs currently employed in LTC facilities and their 
loaded

[[Page 61400]]

respective labor wages using data from the 2022 Nursing Home Staffing 
Study, which has information on 14,688 LTC facilities. This study uses 
the 2021 SNF--Medicare Cost Report data set to find the total 
facilities, the total number of reported LTC specific RNs and their 
loaded annual salaries, defined as salary and fringe benefits. Using 
this dataset, we were able to estimate the aggregate RN loaded salary 
costs and the cost per facility.
    To estimate the RN cost per resident census, we used the October 
2021 Care Compare data set that calculates average hours per resident 
day (HPRD) for RNs using the PBJ System data from 2021 Q2. Hours per 
resident day is defined as the average hours of RN care that each 
resident in the facility receives per day. For example, a facility that 
has an average HPRD of 0.5 for RNs would provide, on average, 0.5 hours 
(30 minutes) of RN care for each resident. We linked this dataset using 
the facility unique ID variable with the 2021 SNF--Medicare Cost Report 
data set to create a complete dataset. Using this combined dataset, we 
were also able to view the impact by resident census as well as the 
impact by LTC facility characteristics such as facility ownership, bed 
size, Five-Star Quality Rating System staffing ratings, payer mix, and 
location. This complete dataset helped provide an understanding of 
which types of LTC facilities would bear the largest cost burden of a 
new Federal 24/7 RN requirement.
    For each facility, we first calculated the total number of hours 
each day that an RN is on site by multiplying the average RN hours per 
resident day by the average number of residents in the facility (daily 
hours of RN care = RN HPRD x Residents in Facility). We then estimated 
the number of additional hours of RN care that facility would need to 
meet the 24/7 RN requirement by subtracting the current daily hours of 
RN care from 24 hours (additional daily RN hours needed = 24 - current 
daily hours of RN care). We then calculated the total number of 
additional RN hours needed per year by multiplying this amount by 365 
(additional yearly RN hours needed = additional daily RN hours needed x 
365). Finally, we estimated each facility's yearly cost for meeting the 
requirement by multiplying the total number of the yearly hours needed 
by the loaded hourly wage (yearly 24/7 RN cost = additional yearly RN 
hours needed x facility RN wage rate).
    For example, if a facility had an average of 0.4 RN HPRD and had 50 
residents it would provide 20 hours of total RN hours per day (0.4 HPRD 
x 50 residents = 20 total RN hours per day). To meet the 24/7 RN 
requirement, this facility would have to increase its total RN hours 
per day by 4 hours (24 hours needed - 20 hours current RN care = 4 
hours needed) and 1,460 hours (4 hours per day x 365 days/year) 
annually. Using the loaded hourly wage cost of $44 per hour, this 
facility would spend $64,240 per year ($44 x 4 RN hours per day x 365 
day per year = $64,240) to be in compliance with the 24/7 RN 
requirement.
    After estimating each facility's cost for meeting the 24/7 RN 
requirement, the next step was to sum the additional cost for all LTC 
facilities to meet the 24/7 RN requirement for an aggregate cost to the 
industry of $349 million per year. We also found approximately 78 
percent of LTC facilities had 24/7 RN coverage within a 90-day window 
based on PBJ System data from 2021 Q2 showing that they provided at 
least 24 hours of RN care per day. We assumed this estimate for all 
quarters, for an annual estimate of approximately 22 percent (100 
percent - 78 percent = 22 percent) or 3,261 LTC facilities (0.222 x 
14,688 LTC facilities = 3,261 LTC facilities) that would need to 
increase their RN staffing to comply with the 24/7 RN requirement. 
Among this 22 percent of facilities needing to increase RN staffing, 
there was an average of 0.43 hours of RN care per resident day.
    Table 15 summarizes the average annual cost for LTC facilities to 
meet the 24/7 RN Staffing Requirement over a 10-year period, which 
includes any associated collection of information costs as described in 
section IV. In estimating the cost, we take into account expected 
growth in wages that will result from greater demand for RNs in LTC 
facilities to meet this proposed 24/7 RN requirement, as well as the 
0.55 RN hours per resident day requirement that we discuss in more 
detail later in the analysis. All costs are reflected in 2021 US 
dollars.
    There is uncertainty about how much RN wages will change over the 
next 10 years due to changes in demand for RNs emerging due to both 
this proposed rule, as well as broader patterns of healthcare use in 
the United States. A 2009 study \174\ examined minimum licensed nurse 
(RN/LPN) staffing standards in California for acute care hospitals that 
went into effect in March 2004. The authors found that compared to 
metropolitan areas outside of California that did not have the 
regulation, RN wage growth in California increased 12.8 percent more 
between 2000 and 2006. A more recent study \175\ found that real nurse 
wage rates increased by nearly 10 percent between 2001 and 2017, with 
changes in rates varying during years of U.S. economic growth and 
recession. During its strongest growth between 2001 and 2004, real 
wages increased at an average rate of 2.41 percent annually. Given the 
uncertainty in growth and increased demands for RNs, we assumed that 
real wages each year would increase at 2.31 percent.
---------------------------------------------------------------------------

    \174\ Mark B, Harless DW, and Spetz J. Spetz. California's 
Minimum-Nurse Staffing Legislation and Nurses' Wages Health Affairs. 
2009;28 Supplement 1, w326-w334. doi: 10.1377/hlthaff.28.2.w326.
    \175\ Barry J. Real wage growth in the U.S. health workforce and 
the narrowing of the gender pay gap. Human Resources for Health. 
2021;19: 105. doi: 10.1186/s12960-021-00647-3.
---------------------------------------------------------------------------

    We provide separate cost estimates for facilities in rural and 
urban areas since facilities in rural areas would have to meet the 
requirement 3 years after the final rule publication. Facilities in 
urban areas, in contrast, would need to meet the requirement 2 years 
after the final rule publication. This resulted in an average annual 
cost of approximately $347 million in 2021 US dollars without 
considering exemptions.

                                  Table 15--Annual Cost for 24/7 RN Requirement
----------------------------------------------------------------------------------------------------------------
                                       Collection of
                                     information costs        24/7 RN            24/7 RN
               Year                  for 24/7 RN (Sec.      requirement        requirement         Total cost
                                      483.35 nursing           (urban             (rural
                                         services)          facilities)        facilities)
----------------------------------------------------------------------------------------------------------------
1................................         $7,461,504.00              $0.00              $0.00      $7,461,504.00
2................................          7,633,864.74     213,764,107.41               0.00     221,397,972.15
3................................          7,810,207.02     218,702,058.29     146,603,030.04     373,115,295.34

[[Page 61401]]

 
4................................          7,990,622.80     223,754,075.83     149,989,560.03     381,734,258.67
5................................          8,175,206.19     228,922,794.98     153,454,318.87     390,552,320.04
6................................          8,364,053.45     234,210,911.55     156,999,113.64     399,574,078.64
7................................          8,557,263.08     239,621,183.61     160,625,793.16     408,804,239.85
8................................          8,754,935.86     245,156,432.95     164,336,248.98     418,247,617.79
9................................          8,957,174.88     250,819,546.55     168,132,416.34     427,909,137.76
10...............................          9,164,085.62     256,613,478.07     172,016,275.15     437,793,838.85
                                  ------------------------------------------------------------------------------
    10 Year Total Cost...........            82,868,918      2,111,564,589      1,272,156,756   3,466,590,263.09
----------------------------------------------------------------------------------------------------------------

    We are soliciting comments on our assumptions, particularly our 
assumption that real wage rates for RNs will increase at annual rate of 
2.31 percent, and burden estimates. We are also soliciting comments on 
how the available supply of RNs and potential changes in this supply 
and demand across different geographical areas over the next 10 years 
may influence the rule's cost for LTC facilities and other health care 
providers competing for the same supply of RNs.
(2) RN On Site 24 Hours a Day, 7 Days a Week (24/7 RN)--State Level 
Analysis
    To provide a more in-depth understanding of the financial and 
staffing effects of the 24/7 RN proposed requirement, we examined its 
impact for different groups of LTC facilities in each State, as well as 
Washington DC and Puerto Rico. We first assessed how many full-time RNs 
LTC facilities would need to hire to meet the proposed requirement. In 
this analysis, we defined a full-time employee as an employee who 
worked 1,950 hours per year. This definition was based on a full-time 
employee working 5 days per week, 8 hours per day, with a 30-minute 
break (37.5 hours/week x 52 weeks/year). To meet the 24/7 RN 
requirement, each facility would need to provide a minimum of 8,760 
hours (24 hours/day x 365 days) of RN care annually since we did not 
include any facility exemptions in these calculations. All calculations 
used the October 2021 Care Compare data set that provides each LTC 
facility's average daily resident census and HPRD for RNs using the PBJ 
System data from 2021 Q2.
    For each facility, we first calculated the total number of full-
time RNs in the facility using the following formula: (facility 
specific RN HPRD x average daily resident census x 365)/1,950. For 
example, if a facility had 100 residents and provided an average of 0.2 
RN HPRD, then during the year, it will provide a total of 7,300 hours 
of RN care (0.2 RN HPRD x 100 residents x 365 days = 7,300 hours) 
yearly and have 3.74 full-time RNs. We then calculated the number of 
additional full-time RNs needed by subtracting the total hours of RN 
care that the facility currently provides yearly from the 8,760 hours 
needed to ensure 24/7 RN coverage and dividing by 1,950, which is the 
number of hours of yearly care provided by a full-time RN. Continuing 
with our example in this section, the LTC facility would need to 
provide 1,460 additional RN hours per year (8,760 hours-7,300 hours = 
1,460 hours) and hire 0.75 additional full-time RNs.
    Table 16 shows the total number of RNs currently employed by LTC 
facilities in each State's urban and rural areas, the number of full-
time RNs and NAs that LTC facilities would need to hire, and the 
percent increase in RNs that LTC facilities in each State would need to 
meet the proposed minimum staffing standard barring any exemptions. 
Oklahoma would need the largest increase in RNs in percentage terms for 
rural facilities, needing to increase the size of its RN workforce by 
27 percent. Meanwhile, for urban facilities, the largest percentage 
increase in RNs would be in Louisiana at 17.6 percent. Facilities in 
Texas would need to hire the most overall RNs with the State needing 
653 additional full-time RNs. Across the United States, however, the 
number of RNs that facilities would need to meet the requirement varies 
widely with several States, including Florida and Illinois, needing to 
increase the size of their LTC facilities' RN labor force by less than 
1 percent.

                             Table 16--Current and Additional Full-Time RNs Needed per State To Meet the 24/7 RN Requirement
                                                                  [Absent an exemption]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Percent                                         Percent
                                                          Existing full-  Additional RNs    increase in   Existing full-  Additional RNs    increase in
                          State                             time RNs in      needed in     RNs needed in    time RNs in      needed in     RNs needed in
                                                            rural areas     rural areas     rural areas     urban areas     urban areas     urban areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................             721               6             0.8           1,416              12             0.8
Alaska..................................................             108               2             1.9             108               0             0.0
Arizona.................................................              60               1             1.7           1,247              12             1.0
Arkansas................................................             487              50            10.3             559              64            11.5
California..............................................             150              20            13.3           9,461             280             3.0
Colorado................................................             374              17             4.5           2,026               0             0.0
Connecticut.............................................             118               1             0.8           2,145               2             0.1
Delaware................................................               0               0  ..............             648               1             0.2
District of Columbia....................................               0               0  ..............             468               0             0.0
Florida.................................................             286               8             2.8           8,208              21             0.3
Georgia.................................................             732              66             9.0           1,469              58             3.9
Hawaii..................................................             177               1             0.6             743               0             0.0
Idaho...................................................             163               8             4.9             437               5             1.1
Illinois................................................           1,049              68             6.5           5,965              55             0.9
Indiana.................................................           1,147              46             4.0           2,611              74             2.8

[[Page 61402]]

 
Iowa....................................................           1,458              99             6.8           1,254              37             3.0
Kansas..................................................             862              71             8.2           1,054              38             3.6
Kentucky................................................           1,212               8             0.7           1,249               9             0.7
Louisiana...............................................             262              49            18.7             762             134            17.6
Maine...................................................             403               8             2.0             576               4             0.7
Maryland................................................             125               0             0.0           2,939               9             0.3
Massachusetts...........................................              12               0             0.0           3,973              29             0.7
Michigan................................................           1,299              12             0.9           3,050              32             1.0
Minnesota...............................................           1,218              19             1.6           2,968              14             0.5
Mississippi.............................................             982              21             2.1             509              16             3.1
Missouri................................................             823             114            13.9           1,707             114             6.7
Montana.................................................             356              15             4.2             163               6             3.7
Nebraska................................................             630              58             9.2             743               4             0.5
Nevada..................................................              61               4             6.6             667               0             0.0
New Hampshire...........................................             349               1             0.3             388               7             1.8
New Jersey..............................................               0               0  ..............           4,756              22             0.5
New Mexico..............................................             256               8             3.1             324               4             1.2
New York................................................             827               5             0.6          10,277              21             0.2
North Carolina..........................................             800              19             2.4           2,381              46             1.9
North Dakota............................................             386               9             2.3             313               0             0.0
Ohio....................................................           1,681              74             4.4           5,169             142             2.7
Oklahoma................................................             437             118            27.0             568              83            14.6
Oregon..................................................             158               5             3.2             762              29             3.8
Pennsylvania............................................           1,026               1             0.1           7,575               9             0.1
Puerto Rico.............................................               0               0  ..............              29               0             0.0
Rhode Island............................................               0               0  ..............             947               0             0.0
South Carolina..........................................             279               8             2.9           1,325              26             2.0
South Dakota............................................             488              19             3.9             240               4             1.7
Tennessee...............................................             683              28             4.1           1,693              25             1.5
Texas...................................................           1,138             250            22.0           4,451             403             9.1
Utah....................................................             122               2             1.6             926               8             0.9
Vermont.................................................             250               4             1.6              72               1             1.4
Virginia................................................             574               6             1.0           1,951              22             1.1
Washington..............................................             193               3             1.6           1,967               5             0.3
West Virginia...........................................             399              10             2.5             682               2             0.3
Wisconsin...............................................           1,142              11             1.0           2,214              20             0.9
Wyoming.................................................             245               5             2.0              85               0             0.0
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................          26,708           1,358             5.1         108,220           1,909             1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We then assessed the financial cost for facilities to implement the 
proposed 24/7 RN requirement. To estimate the yearly cost per State, we 
used the formulas described in section VI.C.1.a.(1) of this proposed 
rule to first estimate each facility's yearly cost to meet the 
requirement. We also assumed that LTC facilities exceeding the minimum 
requirements for RNs would not reduce RNs to the minimum required level 
or lay off other staff to reduce costs. We then calculated the average 
cost per resident day by summing the total cost of meeting the 
requirement for all facilities in the State and dividing it by the 
total number of resident days for all facilities needing additional 
RNs. We estimated the average cost per resident day only for facilities 
needing staff to provide a more complete picture of the burden that the 
rule would impose on these facilities.
    Table 17 provides the yearly Statewide cost to implement the 
requirement, as well as the average cost per resident day for 
facilities in rural and urban areas that would need to hire additional 
RN to meet the requirement. Delaware would have the highest cost per 
resident day with a single facility that is not meeting the 24/7 RN 
requirement and would need to spend $87.45 per resident day. The 
highest overall cost occurs in Texas where facilities would need to 
collectively spend more than $84 million to meet the minimum staffing 
requirement. The cost also varied across urban and rural areas. In New 
Hampshire, LTC facilities in urban areas that need staff would need to 
spend an average of $8.95 per resident day to meet the requirement, 
while in Hawaii, Puerto Rico, and Wyoming these facilities would incur 
no cost. Nevada would have the highest average cost for rural LTC 
facilities at $21.81 per resident day.

   Table 17--LTC Facilities in Each State Needing RNs and the Average Cost per Resident Day by Rural and Urban Location To Satisfy 24/7 RN Requirement
                                                                  [Absent an exemption]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average cost                    Average cost                    Average cost
                                                              Yearly       per resident      Urban LTC     per resident      Rural LTC     per resident
                          State                           statewide cost        day         facilities      day (urban      facilities      day (rural
                                                            ($ million)     (statewide)     needing RNs       areas)        needing RNs       areas)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................             1.1           $3.25              12           $3.86               6           $2.14
Alaska..................................................             0.2           20.75               0            0.00               2           20.75
Arizona.................................................             1.1            5.09              12            5.80               1            0.28

[[Page 61403]]

 
Arkansas................................................             8.8            3.62              64            3.00              50            4.59
California..............................................            44.5            7.96             280            7.81              20           10.42
Colorado................................................             1.8            9.13               0            0.00              17            9.13
Connecticut.............................................             0.2            6.24               2            1.22               1           19.09
Delaware................................................             0.3           87.45               1           87.45               0            0.00
District of Columbia....................................             0.0            0.00               0            0.00  ..............  ..............
Florida.................................................             2.4            5.04              21            4.92               8            5.31
Georgia.................................................            13.0            4.91              58            4.54              66            5.27
Hawaii..................................................             0.1           10.08               0            0.00               1           10.08
Idaho...................................................             0.9            6.34               5            8.38               8            5.04
Illinois................................................            14.4            6.95              55            6.15              68            7.86
Indiana.................................................            10.9            5.87              74            5.16              46            7.48
Iowa....................................................            10.0            6.18              37            5.37              99            6.51
Kansas..................................................             9.0            7.14              38            6.72              71            7.41
Kentucky................................................             1.2            4.63               9            3.01               8            7.12
Louisiana...............................................            23.1            4.43             134            4.16              49            5.34
Maine...................................................             0.8            6.55               4            5.55               8            7.19
Maryland................................................             0.6            6.20               9            6.20               0            0.00
Massachusetts...........................................             3.1            7.23              29            7.23               0            0.00
Michigan................................................             4.2            5.38              32            5.89              12            3.69
Minnesota...............................................             1.6            5.05              14            5.91              19            4.39
Mississippi.............................................             2.3            3.68              16            3.81              21            3.57
Missouri................................................            23.5            5.83             114            5.29             114            6.46
Montana.................................................             1.7            6.16               6            4.62              15            6.96
Nebraska................................................             5.6            8.28               4            5.50              58            8.47
Nevada..................................................             0.7           21.81               0            0.00               4           21.81
New Hampshire...........................................             0.8            8.54               7            8.95               1            6.61
New Jersey..............................................             1.7            4.41              22            4.41               0            0.00
New Mexico..............................................             0.8            5.00               4            4.57               8            5.34
New York................................................             2.7            5.57              21            5.35               5            6.75
North Carolina..........................................             5.6            4.63              46            5.15              19            3.51
North Dakota............................................             0.7            6.94               0            0.00               9            6.94
Ohio....................................................            17.9            4.94             142            4.83              74            5.23
Oklahoma................................................            26.2            7.77              83            6.85             118            8.54
Oregon..................................................             3.7            8.78              29            8.43               5           11.97
Pennsylvania............................................             0.7            5.75               9            7.44               1            1.65
Puerto Rico.............................................             0.0            0.00               0            0.00               0            0.00
South Carolina..........................................             2.8            4.77              26            4.73               8            4.93
South Dakota............................................             1.6            5.62               4            7.36              19            5.23
Tennessee...............................................             4.2            4.13              25            4.32              28            3.94
Texas...................................................            84.6            6.28             403            5.48             250            7.95
Utah....................................................             0.7            4.98               8            5.79               2            1.83
Vermont.................................................             0.3            5.42               1            0.65               4            5.97
Virginia................................................             2.1            3.92              22            3.87               6            4.12
Washington..............................................             0.8            6.76               5            7.00               3            6.41
West Virginia...........................................             1.1            6.52               2            5.81              10            6.62
Wisconsin...............................................             2.6            7.30              20            7.42              11            7.10
Wyoming.................................................             0.4            8.60               0            0.00               5            8.60
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................           349.0            5.97           1,909            5.55           1,358            6.71
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 18 shows the average cost per resident day to implement the 
requirement for facilities in each State that would need additional 
RNs, dividing facilities based on their size into three groups: less 
than 50 beds, 50 to 100 beds, and more than 100 beds. Within each group 
of LTC facilities, the cost varied widely by number of beds and State. 
In West Virginia, the average cost per resident day for facilities that 
have more than 100 beds and need additional RNs would be $0.72, while 
in North Carolina, the average cost per resident day for facilities 
with fewer than 50 beds would be $29.19.

 Table 18--Number of LTC Facilities In Each State Needing To Hire RNs And Average Cost per Resident Day by Facility Size To Satisfy 24/7 RN Requirement
                                                                  [Absent an exemption]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average cost
                                                          LTC facilities      Yearly       per resident                   Cost-50 to 100
                          State                             needing RNs   statewide cost        day        Cost-<50 beds       beds       Cost >100 beds
                                                                            ($ million)     (statewide)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................              18           $1.10           $3.25           $0.94           $3.59           $2.09
Alaska..................................................               2            0.20           20.75           20.75            0.00            0.00
Arizona.................................................              13            1.10            5.09           11.17            5.02            4.23
Arkansas................................................             114            8.80            3.62            0.00            4.63            2.75
California..............................................             300           44.50            7.96           17.35            6.39            3.33

[[Page 61404]]

 
Colorado................................................              17            1.80            9.13           15.46            5.82            5.67
Connecticut.............................................               3            0.20            6.24           14.21            0.00            0.52
District of Columbia....................................               0            0.00            0.00            0.00            0.00            0.00
Delaware................................................               1            0.30           87.45            0.00           87.45            0.00
Florida.................................................              29            2.40            5.04           11.73            4.14            2.25
Georgia.................................................             124           13.00            4.91           13.29            5.37            3.42
Hawaii..................................................               1            0.10           10.08           10.08            0.00            0.00
Idaho...................................................              13            0.90            6.34            7.54            4.57            6.57
Illinois................................................             123           14.40            6.95           13.93            8.19            4.02
Indiana.................................................             120           10.90            5.87           12.74            5.69            2.33
Iowa....................................................             136           10.00            6.18            7.92            4.85            2.24
Kansas..................................................             109            9.00            7.14            8.26            5.75            2.62
Kentucky................................................              17            1.20            4.63            3.37            5.41            0.16
Louisiana...............................................             183           23.10            4.43           10.25            7.00            3.85
Maine...................................................              12            0.80            6.55            6.55            6.56            0.00
Maryland................................................               9            0.60            6.20            6.96            2.13            0.00
Massachusetts...........................................              29            3.10            7.23           12.58            7.42            2.06
Michigan................................................              44            4.20            5.38           11.66            4.50            2.81
Minnesota...............................................              33            1.60            5.05            5.61            3.97            0.00
Mississippi.............................................              37            2.30            3.68            9.72            3.25            1.50
Missouri................................................             228           23.50            5.83           11.26            7.32            3.61
Montana.................................................              21            1.70            6.16           12.26            3.78            8.19
Nebraska................................................              62            5.60            8.28           10.60            6.54            4.94
Nevada..................................................               4            0.70           21.81           24.40           17.35            0.00
New Hampshire...........................................               8            0.80            8.54           12.34            6.50            4.07
New Jersey..............................................              22            1.70            4.41           16.27            2.60            2.06
New Mexico..............................................              12            0.80            5.00            7.70            4.13            5.28
New York................................................              26            2.70            5.57            6.83            7.70            1.77
North Carolina..........................................              65            5.60            4.63           29.19            3.66            1.52
North Dakota............................................               9            0.70            6.94            6.42           11.09            0.00
Ohio....................................................             216           17.90            4.94            9.75            4.33            3.71
Oklahoma................................................             201           26.20            7.77           18.00            9.45            5.09
Oregon..................................................              34            3.70            8.78           12.43            7.35            9.33
Pennsylvania............................................              10            0.70            5.75            9.19            3.19            1.65
Puerto Rico.............................................               0            0.00            0.00            0.00            0.00            0.00
South Carolina..........................................              34            2.80            4.77           10.48            4.78            1.76
South Dakota............................................              23            1.60            5.62            7.27            2.54            0.00
Tennessee...............................................              53            4.20            4.13           12.27            4.54            2.01
Texas...................................................             653           84.60            6.28           10.93            8.11            5.01
Utah....................................................              10            0.70            4.98            3.58            6.01            0.00
Vermont.................................................               5            0.30            5.42            9.82            2.01            0.00
Virginia................................................              28            2.10            3.92           12.31            3.44            0.73
Washington..............................................               8            0.80            6.76           14.04            6.41            1.42
West Virginia...........................................              12            1.10            6.52           13.74            3.98            0.72
Wisconsin...............................................              31            2.60            7.30           13.32            5.52            9.19
Wyoming.................................................               5            0.40            8.60           17.49            2.22            0.00
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................           1,850           349.0            5.97           11.17            6.25            4.07
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In Table 19, we calculated the average cost by State for facilities 
needing staff to meet the minimum staffing requirement based on whether 
the facility accepted patients with Medicare, Medicaid, or both 
Medicare and Medicaid. The highest per resident day cost would be for 
14 Medicaid-only facilities in Illinois that would need to spend an 
average of $29 per resident day to meet the staffing requirement. The 
lowest per resident day cost for facilities needing staff would be for 
a single Medicaid-only facility in South Dakota that would need to 
spend $0.33 per resident day to meet the requirement.

Table 19--Number of LTC Facilities in State Needing To Hire Staff and Average Cost per Resident Day by Medicare, Medicaid, and Dual Acceptance Status To
                                                               Satisfy 24/7 RN Requirement
                                                                   [Absent exemption]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Medicare and
                                                           Medicaid only   Medicaid only   Medicare only   Medicare only   Medicare and      Medicaid
                          State                             facilities      facilities      facilities      facilities       Medicaid       facilities
                                                            needing RNs      cost per       needing RNs      cost per       facilities       cost per
                                                                           resident day                    resident day     needing RNs    resident day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................               2           $5.10               1           $0.94              15           $3.14
Alaska..................................................               0            0.00               0            0.00               2           20.75
Arizona.................................................               0            0.00               2           34.70              10            3.75
Arkansas................................................               1            3.76               0            0.00             111            3.61
California..............................................              11            9.11              13           20.26             273            7.54
Colorado................................................               3           23.37               0            0.00              13            6.41

[[Page 61405]]

 
Connecticut.............................................               0            0.00               0            0.00               3            6.24
Delaware................................................               0            0.00               1           87.45               0            0.00
District of Columbia....................................               0            0.00               0            0.00               0            0.00
Florida.................................................               0            0.00               2           10.71              24            3.81
Georgia.................................................               1           26.52               2           34.37             121            4.75
Hawaii..................................................               0            0.00               0            0.00               1           10.08
Idaho...................................................               0            0.00               1            1.86              12            6.68
Illinois................................................              10            5.35               0            0.00             113            7.10
Indiana.................................................               4            7.88               2           20.15             112            5.50
Iowa....................................................               2            5.26               1           12.90             129            6.09
Kansas..................................................              19           10.72               0            0.00              89            6.52
Kentucky................................................               0            0.00               1            0.68              15            4.78
Louisiana...............................................               0            0.00               6            6.74             170            4.48
Maine...................................................               0            0.00               0            0.00              10            5.38
Maryland................................................               0            0.00               4            7.68               4            5.23
Massachusetts...........................................               0            0.00               2           10.03              25            6.58
Michigan................................................               1           14.48               0            0.00              42            5.42
Minnesota...............................................               3            8.26               0            0.00              28            4.75
Mississippi.............................................               5            4.45               1           23.67              31            3.31
Missouri................................................               6           11.30               2            3.08             219            5.68
Montana.................................................               0            0.00               0            0.00              21            6.16
Nebraska................................................               5           13.34               0            0.00              53            7.28
Nevada..................................................               0            0.00               0            0.00               4           21.81
New Hampshire...........................................               0            0.00               0            0.00               8            8.54
New Jersey..............................................               0            0.00               2            5.28              19            4.38
New Mexico..............................................               1            5.96               0            0.00              11            4.95
New York................................................               0            0.00               0            0.00              26            5.57
North Carolina..........................................               0            0.00               8           70.04              56            3.24
North Dakota............................................               0            0.00               0            0.00               9            6.94
Ohio....................................................               0            0.00               4           12.33             208            4.81
Oklahoma................................................               5           18.96               1            0.01             191            7.58
Oregon..................................................               3            4.27               2           23.40              29            8.89
Pennsylvania............................................               0            0.00               2           21.85               8            3.66
Puerto Rico.............................................               0            0.00               0            0.00               0            0.00
Rhode Island............................................               0            0.00               0            0.00               0            0.00
South Carolina..........................................               0            0.00              10           12.96              23            3.43
South Dakota............................................               4            5.18               0            0.00              19            5.70
Tennessee...............................................               4           14.91               2            4.78              47            3.51
Texas...................................................              14            9.00              11            9.40             620            6.18
Utah....................................................               2            3.04               1            8.08               7            5.34
Vermont.................................................               0            0.00               0            0.00               5            5.42
Virginia................................................               4            7.68               3            2.82              20            2.88
Washington..............................................               0            0.00               0            0.00               8            6.76
West Virginia...........................................               3           19.82               0            0.00               7            5.00
Wisconsin...............................................               1           26.97               2           12.89              27            6.73
Wyoming.................................................               0            0.00               0            0.00               5            8.60
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................             114            9.22              89           13.44           3,003            5.72
--------------------------------------------------------------------------------------------------------------------------------------------------------

(3) Minimum Nurse Staffing Requirement of at Least 0.55 RN and 2.45 NA 
HPRD
    To estimate the incremental impact of the minimum nurse staffing 
requirement of 0.55 RN and 2.45 NA HPRD, we first estimated the 
industry's aggregate annual cost for nurse staff (RNs, LPNs/LVNS, and 
NAs) at current staffing levels. We then estimated the aggregate annual 
cost for nurse staff (RNs, LPNs/LVNs, and NAs) for all facilities to 
meet the minimum requirement. As discussed above, we note that the 
minimum staffing requirements are applied independent of a facility's 
individual case-mix, meaning the expected costs to a facility are based 
solely on the cost of facilities adding additional staff to meet the 
0.55 RN and 2.45 NA HPRD based on the facility's current staffing data, 
regardless of the facility's case-mix. Finally, we calculated the 
requirement's expected cost to the industry by subtracting the 
industry's current nurse staff cost from the estimated nurse staff cost 
for all facilities to meet the minimum requirement (Nurse Staff Cost 
for All Facilities to Meet Minimum Requirement--All Facilities' Current 
Nurse Staff Cost). To measure the current nurse staffing cost to the 
industry, we estimated the total number of nurse staff currently 
employed in LTC facilities and their loaded respective labor wages. 
This study used the 2021 SNF--Medicare Cost Report dataset to find the 
total of facilities, the total number of reported LTC specific nurse-
type staff and their loaded annual salaries, defined as salary and 
fringe benefits. Using this dataset, we were able to estimate the 
aggregate total nurse staffing salary costs and the cost per facility.
    To estimate the nurse staffing cost by staff type, that is, RNs, 
LPNs/LVNs, NAs, per resident census we used the October 2021 Care 
Compare data set that calculates average hours per resident day (HPRD) 
for each nurse type using the PBJ System data from 2021 Q2. Hours per 
resident day was defined as the average hours of care that each 
resident in the facility receives from that nurse type. For example, a 
facility that

[[Page 61406]]

had an average HPRD of 0.5 for RNs would provide, on average, 0.5 hours 
(30 minutes) of RN care for each resident. We linked this dataset using 
the facility unique ID variable with the 2021 SNF--Medicare Cost Report 
data set to create a complete dataset. Using this combined dataset, we 
were also able to view the impact by staff type per resident census as 
well as the impact by LTC facility characteristics such as facility 
ownership, bed size, Five-Star Quality Rating System staffing ratings, 
payer mix, and location. This complete dataset helped provide an 
understanding of which types of LTC facilities would bear the largest 
cost burden of a new Federal minimum staffing requirement.
    Using the above dataset, we estimated each facility's current total 
annual salary costs for each nurse type (RN, LPN/LVN, NA) as follows: 
[facility specific nurse type] loaded hourly wage x [facility specific 
nurse type] reported HPRD x facility-level average daily facility 
resident census x 365. For example, if a facility reported an average 
loaded hourly wage of $44 for its RNs, an average of 0.4 RN HPRD, and 
an average daily resident census of 100, its estimated annual salary 
costs for RNs would be calculated as: $44 x 0.4 x 100 x 365 = $642,400. 
Taking this example further, if this same facility reported a loaded 
average hourly wage of $21 for its NAs, an average of 2.1 NA HPRD, and 
an average daily resident census of 100, its estimated annual salary 
costs for NAs would be calculated as: $21 x 2.1 x 100 x 365 = 
$1,609,650. If this facility only employed RNs and NAs as part of its 
total nurse staff, then the facility's current total nurse staff cost 
would be $2,252,050 ($642,400 + $1,609,650 = $2,252,050). To estimate 
the aggregate current nurse staff cost across all facilities, the next 
step was to sum all facilities' current total (RN, LPN/LVN, and NA) 
nurse staff cost for an overall industry nurse staff cost of $43.4 
billion.\176\ To estimate the cost of the minimum nurse staffing 
requirement, we subtracted the total current nurse staff cost per 
facility from the total nurse staff cost per facility with the minimum 
nurse staffing standard. The formula applied to calculate each 
facility's cost of meeting the requirement per specific nurse type was: 
[facility specific nurse type] hourly wage x [[facility specific nurse 
type] required HPRD - [facility specific nurse type] reported HPRD] x 
facility level average daily resident census x 365. Using the same LTC 
facility example from the paragraph above where the facility had an 
average of 0.4 RN HPRD and 2.1 NA HPRD, for this LTC facility to comply 
it would need to increase its RN HPRD from 0.4 to 0.55 and NA HPRD from 
2.1 to 2.45. The cost for this requirement on this facility would thus 
be $509,175 (($44 x (0.55-0.4) x 100 x 365) + ($21 x (2.45-2.1) x 100 x 
365) = $509,175).
---------------------------------------------------------------------------

    \176\ Calculated as the sum of reported salary costs for total 
nurse staff across all LTC facilities in the study sample. More 
specifically, Total annual salary costs for all LTC facilities = 
[Sgr]\14,668\i=1 Annual salary costs for total nurse staffi.
---------------------------------------------------------------------------

    When LTC facilities hire RNs to meet the 24/7 RN requirement, the 
hours these RNs work will also count toward the 0.55 RN HPRD 
requirement. To avoid overestimating the number of RNs that LTC 
facilities will need to hire and the cost to hire them, if a LTC 
facility has less than 0.55 RN HPRD, we subtracted any cost that the 
facility would incur to meet the 24/7 RN requirement up to the point 
where the LTC facility will meet the 0.55 RN HPRD requirement using the 
following formula: [facility specific cost to meet 0.55 RN and 2.45 NA 
HPRD Requirement]-[Facility Cost to Meet 24/7 RN Requirement].
    Once we apply this formula to each facility in our dataset, we 
summed each facility's total cost to obtain the requirement cost to the 
industry of approximately $4.23 billion.
    This $4.23 billion estimate assumed that LTC facilities would 
respond to the minimum nurse staffing requirement by increasing their 
RN and their NA staffing levels to the minimum necessary levels, 
without reducing other staff, such as administrative staff. We also 
assumed that LTC facilities would not obtain exemptions from the 
minimum staffing requirement. Finally, we assumed LTC facilities that 
were above the minimum staffing requirements for RNs and NAs would not 
decrease their current staffing levels and that owners of LTC chain 
facilities would not shift staff from facilities above the minimum 
proposed requirement to facilities below the minimum proposed 
requirement.\177\
---------------------------------------------------------------------------

    \177\ Appropriate accounting of costs depends on consistency 
with the benefits to which they are compared. The overall change in 
staffing cost (increasing nursing staff cost, net of housekeeping, 
food service and activities-staff costs--which are potentially 
decreasing) would appropriately be compared with a benefits estimate 
that also reflects net staffing changes; a quantitative approach to 
such benefits might extrapolate from reduced-form estimates of the 
effects on patients of other jurisdictions' nursing staffing 
requirements. By contrast, if benefits assessment reflects an 
explicit or implicit assumption that new nursing staff spend all 
their time on nursing activities--not newly covering any of the 
duties that would have been performed by lost housekeeping, food 
service or activities staff--then costs from a society-wide 
perspective are approximated by the (gross) new nursing staffing 
costs. In other words, in the latter case, a focus only on payroll 
effects would omit the harms to consumer satisfaction and conditions 
for remaining staff due to reductions in housekeeping, food service 
and activities.
---------------------------------------------------------------------------

    If LTC facilities covered under this proposed rule reduced other 
staff not covered by the rule, owners of LTC chain facilities shifted 
RN and NAs to other facilities below the requirements, or if LTC 
facilities obtained exemptions from the minimum staffing requirements 
the $4.23 billion estimate may decline significantly. Any reduction in 
other staff, however, could also impose costs on residents due to 
reductions in support activities, such as housekeeping and food 
service, that contribute to quality of life in the LTC facility. As 
such, we seek comments on all the assumptions used in these cost 
models.
    Table 20 summarizes the estimated total cost for the comprehensive 
minimum nurse staffing requirement which includes any associated 
collection of information costs as described in section IV. Collection 
of Information Requirements, but not the regulatory review costs which 
we discuss in more detail later in this section. To account for real 
growth in RN and NA wages over time, we used the same assumption that 
we used to estimate the cost of the 24/7 RN requirement. More 
specifically, we assumed that real wages for RNs and NAs needed to meet 
the proposed 0.55 RN and 2.45 HPRD requirement, as well as collection 
of information costs, would increase at 2.31 percent annually. Since 
rural and urban LTC facilities have different phase-in periods to meet 
the 24/7 RN (2 years for facilities in urban areas and 3 years for 
facilities in rural areas) and the 0.55 RN and 2.45 NA HPRD 
requirements (3 years for facilities in urban areas and 5 years for 
facilities in rural areas) we provided separate cost estimates for 
facilities located in each area. Over a 10-year period, we anticipate 
an average annual cost of approximately $4.06 billion.

[[Page 61407]]



                                                         Table 20--Annual Cost for the Comprehensive Minimum Nurse Staffing Requirement
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Collection of
                                                               Collection of    information costs       24/7 RN            24/7 RN        0.55 RN and 2.45   0.55 RN and 2.45
                                                             information costs     for facility       requirement        requirement          NA HPRD            NA HPRD
                            Year                             for 24/7 RN (Sec.   assessment (Sec.        (urban             (rural          requirement        requirement         Total cost
                                                                483.35 nursing    483.71 facility     facilities)        facilities)           (urban             (rural
                                                                 services)         assessment)                                              facilities)        facilities)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1..........................................................      $7,461,504.00     $24,176,448.00              $0.00              $0.00                 $0                 $0        $31,637,952
2..........................................................       7,633,864.74      24,734,923.95     213,764,107.41               0.00                  0                  0        246,132,896
3..........................................................       7,810,207.02      25,306,300.69     218,702,058.29     146,603,030.04      3,662,915,945                  0      4,061,337,541
4..........................................................       7,990,622.80      25,890,876.24     223,754,075.83     149,989,560.03      3,747,529,303                  0      4,155,154,438
5..........................................................       8,175,206.19      26,488,955.48     228,922,794.98     153,454,318.87      3,834,097,230        803,377,179      5,054,515,685
6..........................................................       8,364,053.45      27,100,850.35     234,210,911.55     156,999,113.64      3,922,664,876        821,935,192      5,171,274,997
7..........................................................       8,557,263.08      27,726,879.99     239,621,183.61     160,625,793.16      4,013,278,435        840,921,895      5,290,731,450
8..........................................................       8,754,935.86      28,367,370.92     245,156,432.95     164,336,248.98      4,105,985,167        860,347,191      5,412,947,346
9..........................................................       8,957,174.88      29,022,657.19     250,819,546.55     168,132,416.34      4,200,833,424        880,221,211      5,537,986,430
10.........................................................       9,164,085.62      29,693,080.57     256,613,478.07     172,016,275.15      4,297,872,676        900,554,321      5,665,913,916
                                                            ------------------------------------------------------------------------------------------------------------------------------------
    10 Year Total Cost.....................................         82,868,918        268,508,343      2,111,564,589      1,272,156,756     31,785,177,057      5,107,356,989     40,627,632,652
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    This proposed rule does not include any provisions requiring 
Medicare, Medicaid or other non-Medicare/Medicaid payors to increase 
payment rates to providers to meet any or all the expected costs of the 
proposed requirements. Below, however, we provide estimates of how much 
of this estimated cost would be due to residents whose care is covered 
by three payor groups: Medicaid, Medicare, and other non-Medicare/
Medicaid payors.
    Table 21 provides annual estimates and a 10-year total estimate for 
the share of facilities' increased staffing costs that would be due to 
residents utilizing Medicaid. These estimates excluded all collection 
of information costs. Over a 10-year period, the average annual cost 
for facilities' due to residents whose stay is paid for by Medicaid 
would be approximately $2.69 billion. If Medicaid were to fully cover 
these costs (although there is no expectation that it will), then 
States would pay $1.1 billion and the Federal government would pay 
$1.57 billion.
    To build these estimates, we used a scenario where facilities' 
increased cost to meet the new minimum staffing and 24/7 RN requirement 
for residents utilizing Medicaid was equal to share of residents in the 
facility using Medicaid. More formally, we first calculated each 
facility's increased cost for these residents using the following 
formula: Increased Facility Cost for Medicaid Residents = (minimum 
staffing requirement cost + 24/7 RN staffing requirement cost) x (% 
facility residents covered by Medicaid). We then summed all facilities' 
share of increased costs that was due to residents utilizing Medicaid 
to the obtain a total estimated cost of $26.9 billion over 10 years.
    To provide further details about the facilities' share of the total 
minimum staffing and 24/7 RN requirements' cost that is due to resident 
utilizing Medicaid, we broke down the Medicaid costs into how the costs 
would typically be divided between the Federal and State Medicaid 
programs. For these estimates, we assumed that the Federal Medicaid 
share would be equal to the State's FMAP (Federal Medical Assistance 
Percentage), while each State's share would be equal to the remaining 
amount (1-FMAP). Using this strategy, we estimated that States' portion 
of the Medicaid cost would be approximately $11.1 billion over 10 
years, while the Federal government's portion of the Medicaid cost 
would be $15.7 billion.
    Table 22 provides annual estimates and a 10-year estimate for the 
share of facilities' increased labor costs that would be due to 
residents whose care was covered by Medicare and other non-Medicare/
Medicaid payors. These estimates continue to exclude all collection of 
information costs. Over a 10-year period, facilities' annual cost to 
meet the proposed requirements would be approximately $454 million for 
residents utilizing Medicare and $886 million for residents utilizing 
other non-Medicare/Medicaid payors.
    To obtain these estimates, we used a scenario where the cost 
facilities would incur to meet the new minimum staffing and 24/7 RN 
requirements for residents utilizing Medicare and other non-Medicare/
Medicaid payors would be equal to the share of residents covered by 
Medicare and non-Medicare/Medicaid payors in each facility.
    To obtain the total cost due to residents utilizing Medicare, we 
first calculated each facility's increased staffing cost for residents 
utilizing Medicare using the following formula: Increased Facility Cost 
for Medicare Residents = (minimum staffing requirement cost + 24/7 RN 
staffing requirement cost) x (% facility residents covered by 
Medicare). We then summed all facilities' increased costs that was due 
to residents utilizing Medicare to the obtain a total estimated cost 
for Medicare of $4.54 billion over 10 years. To obtain the total cost 
due to residents utilizing other non-Medicare/Medicaid payors, we first 
calculated each facility's increased cost for residents using a non-
Medicare/Medicaid payor using the following formula: Increased Facility 
Cost for Non-Medicare/Medicaid Payors = (minimum staffing requirement 
cost + 24/7 RN staffing requirement cost) x (% facility residents 
covered by non-Medicare/Medicaid Payors). We then summed all 
facilities' increased costs that were due to residents utilizing other 
Non-Medicare/Medicaid payors to obtain a total estimated cost of $8.86 
billion over 10 years.

[[Page 61408]]

[GRAPHIC] [TIFF OMITTED] TP06SE23.001


[[Page 61409]]


[GRAPHIC] [TIFF OMITTED] TP06SE23.002

    As previously stated, this rule does not include any provisions 
requiring Medicare to increase payment rates to providers to meet any 
or all the expected costs of the proposed requirements. With specific 
regards to

[[Page 61410]]

the SNF PPS, we do not believe this rule will have meaningful impacts 
on SNF PPS payment rates. Under section 1888(e)(4) of the Act, the SNF 
PPS uses per diem Federal payment rates based on mean SNF costs in a 
base year (FY 1995) updated for inflation to the first effective period 
of the PPS. Section 1888(e)(5)(A) of the Act requires us to establish a 
SNF market basket that reflects changes over time in the prices of an 
appropriate mix of goods and services included in covered SNF services. 
The SNF market basket is used to compute the market basket percentage 
increase that is used to update the SNF Federal rates on an annual 
basis, as required by section 1888(e)(4)(ii)(IV) of the Act. While this 
rule may have minimal impacts on the calculation of the SNF market 
basket percentage, which could impact annual updates to the SNF PPS 
rates, we believe that these impacts would be limited.
    Additionally, under section 1888(e)(4)(G)(i) of the Act, the 
Federal rate also incorporates an adjustment to account for facility 
case-mix, using a classification system that accounts for the relative 
resource utilization of different patient types. The statute specifies 
that the adjustment is to reflect both a resident classification system 
that the Secretary establishes to account for the relative resource use 
of different patient types, as well as resident assessment data and 
other data that the Secretary considers appropriate. While we 
understand that increased staffing will have an impact on facility 
costs, we do not believe that these additional costs fall within the 
scope of relative resource utilization of different patient types. 
Since this rule impacts the facility as a whole, rather than individual 
patient types, we do not believe that the rule would impact adjustments 
made under the SNF PPS to account for facility case-mix.
    Finally, section 1888(e)(4)(G)(ii) of the Act requires that we 
adjust the Federal rates to account for differences in area wage 
levels, using a wage index that the Secretary determines appropriate. 
Since the inception of the SNF PPS, we have used hospital inpatient 
wage data in developing a wage index to be applied to SNFs. As noted 
most recently in the FY 2024 SNF PPS final rule (88 FR 53211), we 
continue to use this practice in FY 2024. Given that the wage index 
used under the SNF PPS is based on analysis of hospital wages and 
staffing hours and because this rule will impact only on SNF wages and 
staffing hours, we do not anticipate that the impacts of this rule will 
be reflected in the SNF PPS wage index. We understand that, as 
discussed in the FY 2024 SNF PPS final rule (88 FR 53212), there have 
been comments encouraging CMS to develop a wage index adjustment under 
the SNF PPS that uses SNF wages and staffing hours as the basis for 
calculating the adjustment. However, as we state in that rule,

    We note that section 315 of the Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-
554, enacted December 21, 2000) gave the Secretary the discretion to 
establish a geographic reclassification procedure specific to SNFs, 
but only after collecting the data necessary to establish a SNF PPS 
wage index that is based on wage data from nursing homes. To date, 
this has proven to be unfeasible due to the volatility of existing 
SNF wage data and the significant amount of resources that would be 
required to improve the quality of the data. More specifically, 
auditing all SNF cost reports, similar to the process used to audit 
inpatient hospital cost reports for purposes of the IPPS wage index, 
would place a burden on providers in terms of recordkeeping and 
completion of the cost report worksheet. Adopting such an approach 
would require a significant commitment of resources by CMS and the 
Medicare Administrative Contractors (MACs), potentially far in 
excess of those required under the IPPS, given that there are nearly 
five times as many SNFs as there are inpatient hospitals. While we 
continue to believe that the development of such an audit process 
could improve SNF cost reports, which is determined to be adequately 
accurate for cost development purposes, in such a manner as to 
permit us to establish a SNF-specific wage index, we do not believe 
this undertaking is feasible. (88 FR 53212).

    We solicit comment on these assumptions regarding the impact of 
this rule on the rates paid under the SNF PPS.
    Sources of uncertainty about the cost estimate for the 24/7 RN and 
0.55 RN and 2.45 NA HPRD requirement include:
    The cost estimate assumed that LTC facilities needing RNs and/or 
NAs to meet these requirements will hire them without laying off other 
direct care or support staff. Some research,178 179 however, 
has found that when States implemented minimum hour per day 
requirements for direct care staff (RNs, LPNs, and NAs), LTC facilities 
responded by reducing indirect care staff, such as housekeeping, food 
service, and activities staff. If LTC facilities responded to the 24/7 
RN and 0.55 and 2.45 NA requirement in similar ways, then a facility's 
total cost for the requirements could decline significantly relative to 
what was presented above (see earlier discussion about appropriate 
accounting of costs depending on consistency between benefit and cost 
analytic approaches).
---------------------------------------------------------------------------

    \178\ Thomas, Kali S., Kathryn Hyer, Ross Andel, and Robert 
Weech-Maldonado. The Unintended Consequences of Staffing Mandates in 
Florida Nursing Homes: Impacts on Indirect-Care Staff, 2010, 
Medicare Care Research and Review, Volume 67, Issue 5, Page 555-573.
    \179\ Bowblis, John R., and Kathryn Hyer. Nursing Home Staffing 
Requirements and Input Substitution: Effects on Housekeeping, Food 
Service, and Activities Staff, 2013, Health Services Reseach, Volume 
48, Issue 4, Pages: 1539-1550.
---------------------------------------------------------------------------

    The cost estimate assumed that real wages for RNs and NAs would 
grow at an annual rate of 2.31 percent due to increasing demand for 
these direct care staff. Differences in demand for RNs and NAs across 
geographical areas, however, could lead to wages in different areas to 
increase at different rates, altering the cost for LTC facilities.
    The 24/7 cost estimate assumed that RNs would make the average 
hourly rate for RNs in the facility. If, however, LTC facilities needed 
to hire RNs to work overnight shifts, which typically command a higher 
hourly rate, the costs for LTC facilities to meet this requirement 
could increase.
    The cost estimate assumed that no LTC facilities would obtain 
exemptions from the 0.55 RN and 2.45 NA HPRD requirements, although 
some facilities could obtain an exemption. Our analysis suggests that 
using the criteria of being located in an area with a medium staffing 
shortage, which is defined as the area having an RN and/or NA to 
population ratio that is 20 percent below the national average, or 
being located 20-miles from the nearest LTC facility, up to 24 percent 
of LTC facilities would meet the initial criteria for an exemption from 
the 2.45 NA HPRD requirement while 28 percent would be eligible for an 
exemption from the 0.55 RN HPRD requirement. Depending on the number of 
facilities that obtained an exemption and their expected cost to meet 
the HPRD requirement, the total cost of the rule for LTC facilities 
could decline significantly.
    In addition to uncertainty about the magnitude of costs, there is 
uncertainty about whether LTC facilities or other entities in society 
would bear the cost of meeting the minimum staffing and 24/7 RN 
requirements. Payors might increase payment rates to meet some or all 
the rule's cost, which could reduce the cost for LTC facilities 
relative to what is estimated above.
    We welcome any comments regarding the methodology that resulted in 
an estimated cost of approximately $40.63 billion over a 10-year period 
for the Comprehensive Minimum Nurse Staffing Requirement and on the 
potential State and Federal Medicaid impact, as well as the potential 
impact

[[Page 61411]]

on Medicare and other non-Medicare/Medicaid payors. We are also 
soliciting comments on all the assumptions we used in our estimate, 
especially how the available supply of RNs and NAs in different areas 
nationwide may influence the proposed rule's cost for LTC facilities 
and other health care providers competing for the same supply of RNs 
and NAs. Finally, we are seeking comments on how LTC chain ownership 
may lead to a shifting of employees across facilities from those 
facilities that are exceeding the proposed minimum staffing 
requirements to those that are below it.
(4) Impact of 0.55 RN and 2.45 NA HPRD Requirement on States
    To provide a more in-depth understanding of the financial and 
staffing effects of the 0.55 RN HPRD and 2.45 NA HPRD proposed minimum 
requirement, we examined its impact for different groups of LTC 
facilities in each State, as well as Washington, DC and Puerto Rico. We 
first assessed how many full-time employees LTC facilities would need 
to hire to meet the proposed requirement. In this analysis, we defined 
a full-time employee as an employee who worked 1,950 hours per year. 
This definition was based on a full-time employee working 5 days per 
week, 8 hours per day, with a 30-minute break (37.5 hours/week x 52 
weeks/year). We continued to assume that no facilities would obtain 
exemptions from the minimum staffing requirement. We also continued to 
subtract any cost that facilities incur or employees they would need to 
hire to meet the 24/7 RN requirements up to 0.55 RN HPRD. All 
calculations used the October 2021 Care Compare data set that provided 
each LTC facility's average daily resident census and HPRD for RNs, 
LPNs/LVNs and NAs using the PBJ System data from 2021 Q2.
    For each facility, we first calculated the total number of full-
time RNs, LPN/LVNs, and NAs working in a facility using the following 
formula: (facility specific care type HPRD x Average daily resident 
census x 365)/1,950. For example, if a facility has 10 residents and 
provides an average of 0.1 RN HPRD, then during the year, it will 
provide a total of 365 hours of RN care (0.1 RN HPRD x 10 residents x 
365 days) yearly and have 0.187 full-time RNs. We then calculated the 
number of additional RNs needed by subtracting the current average 
hours per resident day for RNs from the minimum required hours per 
resident day. Continuing with our example in this section, the LTC 
facility would need to provide 1,642.5 additional RN hours per year 
([0.55 RN HPRD-0.1 HPRD] x 10 residents x 365 days = 1642.5 hours) and 
hire 0.84 additional full-time RNs.
    To calculate the total number of additional NAs needed we 
subtracted the current average hours per resident day for NAs from the 
minimum required hours per resident day. For example, if the same 
facility as previously mentioned with 10 residents provided an average 
of 2.2 NA HPRD, then to meet the 2.45 HPRD requirement it would need to 
provide 912.5 additional NA hours per year ([2.45 NA HPRD-2.2 NA HPRD] 
x 10 residents x 365 days = 912.5 hours) and hire 0.47 (912.5 hours 
needed/1,950 hours yearly per full-time employee) full-time NAs.
    Table 23 shows the total number of RNs and NAs employed by LTC 
facilities in each State's urban areas, the number of full-time RNs and 
NAs that LTC facilities would need to hire, and the percent increase in 
RNs and NAs that LTC facilities in each State would need to meet the 
proposed minimum staffing standard. Table 24 provides the same 
information for LTC facilities located in each State's rural areas.
    Louisiana would need the largest increase in RNs in percentage 
terms. The number of full-time RNs in urban LTC facilities would need 
to increase by nearly 96 percent, while rural LTCs would need to 
increase the number of RNs by more than 73 percent to meet minimum 
standard. Facilities in Texas would need to hire the most overall RNs 
with the State needing 1,615 additional full-time RNs in urban areas 
and more than 311 RNs in rural areas. Across the United States, 
however, the number of RNs that facilities would need to hire varies 
widely, with several States, including Delaware and Hawaii, not needing 
to hire any RNs to meet the requirement.
    Illinois would need the largest percentage increase for NAs in 
urban areas. The State would need to add nearly 6,000 full-time NAs and 
increase the overall number of NAs working in LTC facilities by more 
than 42 percent. Similar to RNs, however, there would be wide variation 
in the percentage increase in NAs across States. Florida, for example, 
would need to increase the size of its NA labor force in LTC facilities 
by less than 2 percent to meet the requirement.

 Table 23--Current and Additional Full-Time RNs and NAs Needed per State To Meet 0.55 RN and 2.45 NA HPRD Staffing Requirement for Urban LTC Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Percent                                         Percent
                          State                           Existing full-  Additional RNs    increase in   Existing full-  Additional NAs    increase in
                                                             time RNs         needed        RNs needed       time NAs         needed        NAs needed
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................           1,416             129             9.1           5,011             922            18.4
Alaska..................................................             108               0               0             216               3             1.2
Arizona.................................................           1,247             101             8.1           4,036             651            16.1
Arkansas................................................             559             220            39.3           3,775             199             5.3
California..............................................           9,461           1,390            14.7          40,659           1,734             4.3
Colorado................................................           2,026               9             0.5           4,687             718            15.3
Connecticut.............................................           2,145             122             5.7           6,735           1,136            16.9
Delaware................................................             648               0               0           1,376             259            18.8
District of Columbia....................................             468               0               0             923              45             4.9
Florida.................................................           8,208             390             4.8          29,310             414             1.4
Georgia.................................................           1,469             443            30.1           6,446           1,996              31
Hawaii..................................................             743               0               0           1,289              28             2.2
Idaho...................................................             437               1             0.2           1,176             105             8.9
Illinois................................................           5,965             551             9.2          13,944           5,985            42.9
Indiana.................................................           2,611             261              10           8,917           2,087            23.4
Iowa....................................................           1,254              28             2.2           4,010             367             9.2
Kansas..................................................           1,054              51             4.8           3,652             369            10.1
Kentucky................................................           1,249             100               8           3,997             787            19.7
Louisiana...............................................             762             730            95.9           6,306           1,225            19.4
Maine...................................................             576               3             0.5           1,499              36             2.4
Maryland................................................           2,939              47             1.6           7,572           1,588              21
Massachusetts...........................................           3,973             191             4.8          12,156           2,184              18
Michigan................................................           3,050             235             7.7           8,862           2,268            25.6

[[Page 61412]]

 
Minnesota...............................................           2,968               3             0.1           6,267             573             9.1
Mississippi.............................................             509              68            13.3           1,955             319            16.3
Missouri................................................           1,707             442            25.9           7,786           1,504            19.3
Montana.................................................             163               4             2.2             487              88            18.1
Nebraska................................................             743              17             2.3           2,313             139               6
Nevada..................................................             667              45             6.7           1,796             328            18.3
New Hampshire...........................................             388              13             3.4           1,256             168            13.3
New Jersey..............................................           4,756             335               7          13,412           2,856            21.3
New Mexico..............................................             324              27             8.2           1,184             194            16.4
New York................................................          10,277             745             7.2          32,047           5,904            18.4
North Carolina..........................................           2,381             376            15.8           9,175           1,774            19.3
North Dakota............................................             313               1             0.4           1,176              12               1
Ohio....................................................           5,169             521            10.1          16,844           4,552              27
Oklahoma................................................             568             203            35.7           3,725             333             8.9
Oregon..................................................             762              17             2.3           3,170              14             0.4
Pennsylvania............................................           7,575             242             3.2          20,086           4,917            24.5
Puerto Rico.............................................              29               0               0               0              26  ..............
Rhode Island............................................             947              14             1.5           2,752             284            10.3
South Carolina..........................................           1,325             163            12.3           4,793             794            16.6
South Dakota............................................             240               0               0             618              88            14.2
Tennessee...............................................           1,693             230            13.6           6,047           1,495            24.7
Texas...................................................           4,451           1,615            36.3          21,663           6,101            28.2
Utah....................................................             926               2             0.2           2,012             197             9.8
Vermont.................................................              72               4               5             239              24            10.1
Virginia................................................           1,951             344            17.6           6,838           2,148            31.4
Washington..............................................           1,967              22             1.1           5,257             311             5.9
West Virginia...........................................             682              22             3.2           1,987             431            21.7
Wisconsin...............................................           2,214              16             0.7           5,220             619            11.9
Wyoming.................................................              85               3             3.4             212              51            23.9
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................         108,220          10,495             9.7         356,871          61,348            17.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 24--Current and Additional Full-Time RNs and NAs Needed per State To Meet 0.55 RN and 2.45 NA HPRD Staffing Requirement for Rural LTC Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Existing full-  Additional RNs   % Increase in  Existing full-  Additional NAs   % Increase in
                          State                              time RNs         needed        RNs needed       time NAs         needed        NAs needed
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................             721              69             9.5           2,884             280             9.7
Alaska..................................................             108               0               0             256               0               0
Arizona.................................................              60               4             6.4             169              60            35.2
Arkansas................................................             487             115            23.6           2,930             159             5.4
California..............................................             150              37            24.5             847              32             3.8
Colorado................................................             374               6             1.5           1,080              89             8.3
Connecticut.............................................             118               6             4.6             379              68            18.1
Delaware................................................               0               0  ..............               0               0  ..............
District of Columbia....................................               0               0  ..............               0               0  ..............
Florida.................................................             286              51            17.9           1,501              23             1.5
Georgia.................................................             732             177            24.2           3,147             954            30.3
Hawaii..................................................             177               0               0             393              33             8.5
Idaho...................................................             163               1             0.6             542              21             3.8
Illinois................................................           1,049              85             8.1           3,519             961            27.3
Indiana.................................................           1,147              51             4.5           3,510             740            21.1
Iowa....................................................           1,458              29               2           4,789             534            11.1
Kansas..................................................             862              10             1.1           3,224             130               4
Kentucky................................................           1,212              70             5.8           4,011             543            13.5
Louisiana...............................................             262             192            73.4           2,166             284            13.1
Maine...................................................             403               0               0           1,151               5             0.4
Maryland................................................             125               0               0             353              44            12.5
Massachusetts...........................................              12               0               0              40               0               0
Michigan................................................           1,299              19             1.5           3,624             273             7.5
Minnesota...............................................           1,218               1             0.1           3,417             113             3.3
Mississippi.............................................             982              70             7.1           3,544             515            14.5
Missouri................................................             823             133            16.2           3,959             639            16.1
Montana.................................................             356               5             1.5             996             125            12.6
Nebraska................................................             630              13             2.1           2,380             129             5.4
Nevada..................................................              61               0               0             189              23            12.1
New Hampshire...........................................             349               8             2.4           1,206             132            10.9
New Jersey..............................................               0               0  ..............               0               0  ..............
New Mexico..............................................             256               7             2.5             796              93            11.7
New York................................................             827              37             4.5           2,609             824            31.6
North Carolina..........................................             800              92            11.5           2,945             562            19.1
North Dakota............................................             386               6             1.7           1,331              53               4
Ohio....................................................           1,681             109             6.5           5,264           1,395            26.5
Oklahoma................................................             437              94            21.4           3,040             196             6.4
Oregon..................................................             158               2             1.1             528               0               0
Pennsylvania............................................           1,026              50             4.9           3,152             757              24

[[Page 61413]]

 
Puerto Rico.............................................               0               0  ..............               0               0  ..............
Rhode Island............................................               0               0  ..............               0               0  ..............
South Carolina..........................................             279              62            22.4           1,121             250            22.3
South Dakota............................................             488               2             0.5           1,382             146            10.6
Tennessee...............................................             683              78            11.4           2,515             603              24
Texas...................................................           1,138             311            27.3           6,143           1,763            28.7
Utah....................................................             122               0               0             269              30            11.3
Vermont.................................................             250               2             0.8             734              90            12.3
Virginia................................................             574              99            17.3           1,990             651            32.7
Washington..............................................             193               5             2.5             535              84            15.6
West Virginia...........................................             399              32               8           1,464             223            15.2
Wisconsin...............................................           1,142               4             0.3           2,835             335            11.8
Wyoming.................................................             245               0               0             626              64            10.2
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................          26,708           2,144             8.0          95,485          15,028            15.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We then assessed the financial cost for facilities to implement the 
proposed 0.55 RN and 2.45 NA HPRD minimum staffing requirement. To 
estimate the yearly cost per State, we used the formulas described in 
section VI.C.1.(a) to first estimate each facility's yearly cost to 
meet the requirement. We also assumed that LTC facilities exceeding the 
minimum requirements for either RNs and/or NAs would not reduce staff 
to the minimum required level or lay off other staff to reduce costs. 
We then calculated the average cost per resident day by summing the 
total cost of meeting the requirement for all facilities in the State 
and dividing it by the total number of resident days for all facilities 
needing additional RNs or NAs. We estimated the average cost per 
resident day only for facilities needing staff to provide a more 
complete picture of the burden that the rule would impose on these 
facilities.
    Table 25 provides the yearly Statewide cost to implement the 
requirement, as well as the average cost per resident day for 
facilities in rural and urban areas that will need to hire staff to 
meet the requirement. Facilities in Illinois that were not meeting the 
minimum staffing standard would need to spend the most with an average 
cost of $20.41 per resident day. The highest overall cost occurs in New 
York where facilities would need to collectively spend nearly $409 
million to meet the minimum staffing requirement. The cost also varied 
across urban and rural areas. In Illinois, LTC facilities in urban 
areas that need staff would need to spend an average of $21.70 per 
resident day to meet the requirement, while in Florida, they would need 
to spend less than $5.25 per resident day. Virginia had the highest 
average cost for rural LTC facilities at $17.63 per resident day.

               Table 25--LTC Facilities in Each State Needing RNs and/or NAs and Average Cost per Resident Day by Rural and Urban Location
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average cost      Urban LTC     Average cost      Rural LTC     Average cost
                                                              Yearly       per resident     facilities     per resident     facilities     per resident
                          State                           statewide cost        day         needing RNs     day (urban      needing RNs     day (rural
                                                            ($ million)     (statewide)     and/or NAs        areas)        and/or NAs        areas)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................            57.5          $10.03             120          $10.59              57           $8.76
Alaska..................................................             0.1            7.50               1            7.50               0            0.00
Arizona.................................................            35.8           12.07              99           12.06               8           12.17
Arkansas................................................            33.9            7.40             103            7.96              80            6.58
California..............................................           222.7            9.55             725            9.57              26            8.48
Colorado................................................            37.4           10.18             122           10.29              26            9.37
Connecticut.............................................            63.4           12.04             140           12.25              12            9.14
Delaware................................................            12.0           11.18              36           11.18               0            0.00
District of Columbia....................................             1.9            6.33               7            6.33               0            0.00
Florida.................................................            54.3            5.32             271            5.23              22            6.46
Georgia.................................................           154.1           16.26             201           17.05             125           14.69
Hawaii..................................................             2.6            9.41               5            7.97               3           10.84
Idaho...................................................             5.3            6.95              29            7.38              11            5.32
Illinois................................................           353.5           20.41             412           21.70             155           14.49
Indiana.................................................           150.1           13.95             307           14.66             151           12.06
Iowa....................................................            40.8            8.94              97            9.16             174            8.78
Kansas..................................................            24.9            8.79              90           10.23              63            5.86
Kentucky................................................            67.5           11.11             111           13.21             109            8.72
Louisiana...............................................           117.9           15.57             175           16.71              70           12.10
Maine...................................................             2.4            5.89              12            7.17               4            2.02
Maryland................................................            77.5           12.00             168           12.14              10            8.64
Massachusetts...........................................           125.4           12.58             306           12.58               0            0.00
Michigan................................................           128.6           14.78             250           15.77              68            9.49
Minnesota...............................................            33.6           10.09             109           10.81              49            7.58
Mississippi.............................................            38.3            9.46              54           10.89             103            8.62
Missouri................................................           117.3           12.75             233           14.21             147            9.61
Montana.................................................            10.4           13.81              13           14.08              27           13.61
Nebraska................................................            13.0            8.54              26            9.77              58            7.61
Nevada..................................................            18.3           13.90              34           13.80               4           15.92
New Hampshire...........................................            18.4           13.58              27           12.88              19           14.60
New Jersey..............................................           163.2           14.74             285           14.74               0            0.00
New Mexico..............................................            15.3           10.87              29           11.33              22            9.87

[[Page 61414]]

 
New York................................................           408.9           14.66             430           14.56              72           15.63
North Carolina..........................................           126.9           13.01             256           13.33              87           11.99
North Dakota............................................             3.9           10.81               5            7.81              15           11.84
Ohio....................................................           287.6           14.68             577           15.19             227           13.06
Oklahoma................................................            40.6            9.15             108           10.62              96            7.03
Oregon..................................................             2.8            4.91              26            4.75               1            8.28
Pennsylvania............................................           297.8           14.96             470           15.19             101           13.56
Puerto Rico.............................................             0.0            0.00               3            0.00               0            0.00
Rhode Island............................................            16.1            9.87              53            9.87               0            0.00
South Carolina..........................................            59.4           12.63             113           12.40              35           13.39
South Dakota............................................            10.4            9.53              21            9.84              43            9.34
Tennessee...............................................           101.8           13.10             181           13.68             100           11.77
Texas...................................................           408.0           15.35             773           15.93             305           13.36
Utah....................................................             7.5            6.40              49            6.38               8            6.52
Vermont.................................................             6.3           10.75               4           12.28              16           10.28
Virginia................................................           156.1           19.18             180           19.65              63           17.63
Washington..............................................            23.4           10.27              78            9.40              15           15.54
West Virginia...........................................            30.1           10.88              59           11.00              44           10.68
Wisconsin...............................................            40.9           11.15             114           11.79              75           10.06
Wyoming.................................................             6.2           13.03               6           14.37              13           11.97
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................         4,232.6           13.24           7,613           13.69           2,685           11.43
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 26 shows the average cost per resident day for facilities in 
each State that need additional staff, dividing facilities based on 
their size into three groups: less than 50 beds, 50 to 100 beds, and 
more than 100 beds. Within each group of LTC facilities, the cost 
varied widely by the number of beds and State. In Oklahoma, the average 
cost per resident day for facilities that have fewer than 50 beds and 
need additional RNs or NAs would be $1.84, while in Illinois, the 
average cost per resident day for facilities with more than 100 beds 
would be $22.10.

            TABLE 26--Number of LTC Facilities in Each State Needed To Hire RNs and/or NAs and Average Cost per Resident Day by Facility Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average cost
                                                          LTC facilities     Statewide     per resident     Cost-- <50     Cost-- 50 to     Cost-- >100
                          State                             needing RNs     hiring cost         day            beds          100 beds          beds
                                                             and/or NA      ($ million)     (statewide)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................             177            57.5           10.03           $5.60           $8.61          $10.51
Alaska..................................................               1             0.1            7.50  ..............            7.50  ..............
Arizona.................................................             107            35.8           12.07           11.89            7.44           13.24
Arkansas................................................             183            33.9            7.40  ..............            7.39            7.40
California..............................................             751           222.7            9.55            5.33            9.16           10.06
Colorado................................................             148            37.4           10.18           10.94            9.33           10.65
Connecticut.............................................             152            63.4           12.04           19.07           10.35           12.34
Delaware................................................              36            12.0           11.18            7.15            7.38           11.94
District of Columbia....................................               7             1.9            6.33            3.88           18.10            4.45
Florida.................................................             293            54.3            5.32            7.69            5.67            5.24
Georgia.................................................             326           154.1           16.26           10.12           14.71           17.21
Hawaii..................................................               8             2.6            9.41            3.82           14.83            8.42
Idaho...................................................              40             5.3            6.95            5.52            7.80            6.43
Illinois................................................             567           353.5           20.41            8.51           14.51           22.10
Indiana.................................................             458           150.1           13.95           14.24           12.79           14.77
Iowa....................................................             271            40.8            8.94            8.82            8.71            9.73
Kansas..................................................             153            24.9            8.79            8.05            8.08           10.69
Kentucky................................................             220            67.5           11.11            9.16           11.17           11.13
Louisiana...............................................             245           117.9           15.57            4.91           10.11           16.50
Maine...................................................              16             2.4            5.89  ..............            6.38            4.78
Maryland................................................             178            77.5           12.00            6.36            9.83           12.44
Massachusetts...........................................             306           125.4           12.58           11.71           11.40           12.83
Michigan................................................             318           128.6           14.78           12.36           12.49           15.97
Minnesota...............................................             158            33.6           10.09           10.30           10.13            9.96
Mississippi.............................................             157            38.3            9.46           12.76            7.93           10.45
Missouri................................................             380           117.3           12.75            6.62            9.44           14.63
Montana.................................................              40            10.4           13.81           16.03           16.75           10.77
Nebraska................................................              84            13.0            8.54            8.13            7.37           10.67
Nevada..................................................              38            18.3           13.90            6.79            9.47           15.14
New Hampshire...........................................              46            18.4           13.58            4.31           13.58           13.86
New Jersey..............................................             285           163.2           14.74           10.34           11.22           15.00
New Mexico..............................................              51            15.3           10.87           10.24           10.86           10.90
New York................................................             502           408.9           14.66            9.47           17.38           14.48
North Carolina..........................................             343           126.9           13.01           11.27           11.71           13.77
North Dakota............................................              20             3.9           10.81            9.93            5.47           15.42
Ohio....................................................             804           287.6           14.68           11.28           13.76           16.15
Oklahoma................................................             204            40.6            9.15            1.84            5.51           11.08

[[Page 61415]]

 
Oregon..................................................              27             2.8            4.91            8.60            3.79            5.94
Pennsylvania............................................             571           297.8           14.96           12.90           12.73           15.45
Puerto Rico.............................................               3  ..............  ..............  ..............  ..............  ..............
Rhode Island............................................              53            16.1            9.87            9.19            9.16           10.21
South Carolina..........................................             148            59.4           12.63            8.79           12.48           12.82
South Dakota............................................              64            10.4            9.53            9.14            9.37           10.87
Tennessee...............................................             281           101.8           13.10            7.40           11.86           13.66
Texas...................................................           1,078           408.0           15.35           10.03           12.69           16.39
Utah....................................................              57             7.5            6.40            9.69            6.84            5.62
Vermont.................................................              20             6.3           10.75            5.46           15.05            9.59
Virginia................................................             243           156.1           19.18            5.92           16.13           20.25
Washington..............................................              93            23.4           10.27           10.68            8.44           11.48
West Virginia...........................................             103            30.1           10.88            9.03            9.86           11.90
Wisconsin...............................................             189            40.9           11.15            7.93           10.40           12.47
Wyoming.................................................              19             6.2           13.03  ..............            8.27           14.84
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................          11,022         4,232.6           13.24            9.25           14.25           11.37
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In Table 27, we calculated the average cost by State for facilities 
needing staff to meet the minimum staffing requirement based on whether 
the facility accepted patients with Medicare, Medicaid, or both 
Medicare and Medicaid. The highest per resident day cost would be for a 
single Medicaid-only facility in North Dakota that would need to spend 
an average of $31.33 per resident day to meet the staffing requirement. 
The lowest per resident day cost for facilities needing staff would be 
for two Medicare-only facilities in West Virginia that would need to 
spend $0.59 per resident day to meet the requirement.

 TABLE 27--Number of LTC Facilities in State Needing To Hire RNs and/or NAs and Average Cost per Resident Day by Medicare, Medicaid and Dual Acceptance
                                                                         Status
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Medicare and
                                                                           Medicare only                   Medicaid only   Medicare and      Medicaid
                          State                            Medicare only    facilities     Medicaid only    facilities       Medicaid       facilities
                                                            facilities       cost per       facilities       cost per       facilities       cost per
                                                                           resident day                    resident day                    resident day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................               4           $5.87               1          $12.92             171          $10.06
Alaska..................................................               0            0.00               0            0.00               1            7.50
Arizona.................................................              13            7.84               0            0.00              92           12.54
Arkansas................................................               0            0.00               2            2.18             180            7.50
California..............................................               7            3.51              19           26.77             722            9.02
Colorado................................................               9            5.85               3           26.07             135           10.15
Connecticut.............................................               0            0.00               0            0.00             151           12.02
Delaware................................................               3            6.47               2           10.37              31           11.36
District of Columbia....................................               0            0.00               0            0.00               7            6.33
Florida.................................................               6            9.96               0            0.00             285            5.31
Georgia.................................................               4            5.94               0            0.00             322           16.36
Hawaii..................................................               0            0.00               0            0.00               8            9.41
Idaho...................................................               0            0.00               0            0.00              40            6.95
Illinois................................................               9            5.58              14           37.51             542           20.11
Indiana.................................................               7           17.82               5           11.21             444           13.96
Iowa....................................................               2            3.09               5           11.49             261            8.93
Kansas..................................................               1           12.98               9           20.62             142            8.31
Kentucky................................................               5            9.72               0            0.00             213           11.13
Louisiana...............................................               6            4.27               0            0.00             232           15.30
Maine...................................................               0            0.00               0            0.00              16            5.89
Maryland................................................               2           10.02               0            0.00             175           12.05
Massachusetts...........................................               4           14.14               0            0.00             296           12.58
Michigan................................................               1            6.28               1            2.71             314           14.72
Minnesota...............................................               4            5.84               6           27.71             146            9.19
Mississippi.............................................               3           19.62              12            9.42             142            9.41
Missouri................................................               5            9.63               6           15.99             368           12.74
Montana.................................................               0            0.00               0            0.00              40           13.81
Nebraska................................................               0            0.00               3            7.04              77            8.59
Nevada..................................................               3            6.74               1           24.55              34           13.70
New Hampshire...........................................               0            0.00               1            6.60              45           13.78
New Jersey..............................................               5            8.83               0            0.00             278           14.66
New Mexico..............................................               0            0.00               1            8.08              50           10.89
New York................................................               0            0.00               0            0.00             500           14.69
North Carolina..........................................               7           11.76               1           11.94             332           13.05
North Dakota............................................               1           31.33               0            0.00              18           10.98
Ohio....................................................               5            8.84               0            0.00             792           14.70
Oklahoma................................................               2            6.39               2            6.86             200            9.20
Oregon..................................................               0            0.00               2            7.52              23            4.60
Pennsylvania............................................              33            9.70               1            3.98             535           15.12
Puerto Rico.............................................               3            0.00               0            0.00               0            0.00

[[Page 61416]]

 
Rhode Island............................................               0            0.00               0            0.00              53            9.87
South Carolina..........................................              10            6.87               0            0.00             137           12.82
South Dakota............................................               0            0.00               6            5.67              57            9.90
Tennessee...............................................              18            9.05               4            8.30             259           13.34
Texas...................................................              23            8.53               6           10.40           1,041           15.51
Utah....................................................               4            9.15               4           12.85              49            6.00
Vermont.................................................               0            0.00               0            0.00              20           10.75
Virginia................................................               9            3.26               5           15.09             227           19.55
Washington..............................................               0            0.00               0            0.00              93           10.27
West Virginia...........................................               2            0.59               1            8.01              98           10.81
Wisconsin...............................................               2            1.40               1            5.13             184           11.24
Wyoming.................................................               0            0.00               0            0.00              19           13.03
                                                         -----------------------------------------------------------------------------------------------
    United States.......................................             222            8.39             124           19.33          10,597           13.96
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Benefits of LTC Minimum Staff Requirement
    Literature evidence suggests that higher staffing is associated 
with better quality of patient care and patient health 
outcomes.180 181 182 While many of these benefits are 
difficult to quantify, research suggests a positive correlation between 
higher RN HPRD and more community discharges, as well as fewer 
hospitalizations and emergency department visits that result in 
significant savings for Medicare. The strongest comes from the 2022 
Nursing Home Staffing Study that analyzes the Medicare savings that are 
likely to result from different case-mix adjusted RN hours per resident 
day (HPRD) requirements.
---------------------------------------------------------------------------

    \180\ Cai, S., Yan, D., & Intrator, O. (2021). COVID-19 cases 
and death in nursing homes: The role of racial and ethnic 
composition of facilities and their communities. Journal of the 
American Medical Directors Association, 22(7), 1345-1351.
    \181\ Harris, J.A., Engberg, J., & Castle, N.G. (2020). 
Organizational and geographic nursing home characteristics 
associated with increasing prevalence of resident obesity in the 
United States. Journal of Applied Gerontology, 39(9), 991-999. 
https://doi.org/10.1177/07 464819843045 https://doi.org/10.1177/07 
464819843045 https://doi.org/10.1177/07 464819843045 https://doi.org/10.1177/07 464819843045.
    \182\ Min, A., & Hong, H.C. (2019). Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A cross-sectional study using the US Nursing 
Home Compare database. Geriatric Nursing, 40(2), 160-165. https://
doi.org/10.1016/j.ghttps://doi.org/10.1016/j.gerinurse.2018.09.010https://doi.org/10.1016/j.ghttps://doi.org/10.1016/j.gerinurse.2018.09.010.
---------------------------------------------------------------------------

    The study first used the PBJ system, which contains data on daily 
hours worked by RNs, and data from the Minimum Data Set (MDS) on 
resident acuity and the number of residents in the facility, to 
calculate the acuity-adjusted RN HPRD for 14,140 LTC facilities based 
on data from 2022 Q2.\183\ We would note, as discussed above, that 
while the benefits described in this section were calculated on the 
basis of acuity-adjusted data, the minimum staffing requirements being 
proposed in this rule will be applied independent of an individual 
facility's case-mix. We understand that this may impact the 
comparability of the benefits described in this section to those which 
may occur if these requirements are finalized, but we also believe that 
the acuity adjusted data more accurately reflect that which is publicly 
reported through Care Compare and the PBJ System. Registered nurses 
included RNs, RNs with administrative duties, and RN directors of 
nursing. It then used Nurse Home Compare Data from 2021Q2 to 2022Q1 to 
examine the impact of different RN staffing levels on five claims-based 
measures: short-stay hospital readmission, short-stay emergency 
department (ED) visits, long-stay hospitalizations per 1,000 long-stay 
resident days, long-stay ED visits per 1,000 long-stay resident days, 
and the rate of successful return to home or community. More 
specifically, the study ran a multivariate regression model that used 
the 1st and 2nd RN staffing decile as the reference group and included 
the 3rd through the 10th deciles of RN staffing as covariates in the 
model. The model also includes several additional covariates that take 
into account LTC facility specific characteristics that include: (1) 
facility size (number of certified beds), (2) ownership type (for-
profit, non-profit or government owned), (3) whether the facility is 
located in a rural area, (4) the facility's Medicaid population 
quartile, (5) whether the facility is hospital-based, (6) the 
facility's status in the Special Focus Facility Program, and (7) 
whether the facility is part of a continuing care retirement community. 
They then used the model coefficients to identify the mean outcomes 
that were associated with each staffing level above the 1st and 2nd RN 
staffing deciles.
---------------------------------------------------------------------------

    \183\ In the study, Appendix E, Section E.1.1 provides details 
on the criteria used for the acuity adjustment.
---------------------------------------------------------------------------

    After identifying the mean outcome rate for each of the five 
measures that was associated with each staffing level, they compared it 
to the adjusted mean outcome rate for each facility to the rate the 
facility would have if it met the minimum required RN staffing level. 
For those facilities above the minimum RN staffing level, they assumed 
that they would maintain their current RN staffing level. Based on the 
facility's number of short-stay residents, as well as long-stay 
resident days, they then estimated the total savings at the facility 
level. To measure costs savings for Medicare, the used an average 
estimated cost of $20,400 per hospitalization, $2,500 per ED visit, and 
for community and home discharge, the reduction in the number of 
Medicare-covered SNF days multiplied by the average daily payment 
amount. Using these criteria, the study estimates that a minimum RN 
requirement of between 0.52 and 0.60 HPRD would result in $318,259,715 
in annual Medicare savings.\184\
---------------------------------------------------------------------------

    \184\ Abt Associates. (2022). Nursing Home Staffing Study 
Comprehensive report. Page 110. Report prepared for the Centers for 
Medicare & Medicaid Services. https://edit.cms.gov/files/document/nursing-home-staffing-study-final-report-appendix-june-2023.pdf.
---------------------------------------------------------------------------

    Given that our proposed RN HPRD level is 0.55 we consider this 
amount to be our best estimate of the rule's financial benefits. There 
are also likely to be cost savings for Medicaid due to fewer 
hospitalizations and emergency department visits, although the 2022

[[Page 61417]]

Nursing Home Staffing Study did not quantify them. Higher RN and NA 
staffing levels may also lead to lower employee burnout and turnover, 
reducing LTC facilities' costs to recruit new staff and lowering 
dependence on temporary employees, who often command higher hourly 
rates. Additionally, while the savings estimate above reflects an 
acuity-adjusted standard, given variability in acuity across 
facilities, we believe that these savings estimates provide guidance on 
the potential impact of applying the minimum staffing requirements 
independent of a facility's case-mix. We invite comments on this 
assumption and to what extent the benefits described in this section 
should be calculated using unadjusted data from PBJ and Care Compare.
    Table 28 provides the estimated quantifiable benefits annually and 
over 10 years. Since the 0.55 RN HPRD requirement will not go into 
effect until Year 3, we estimate no reduction in Emergency Department 
visits and hospitalizations, as well as increase in discharges to home 
or the community for the first 2 years. Over 10 years, we estimate a 
total of approximately $2.55 billion in Medicare cost savings. We are 
soliciting comments on additional benefits from increased RN and NA 
staffing and note that the table below does not reflect the 
unquantifiable benefits of this rule.

    Table 28--Minimum Staffing Requirement and Medicare Cost Savings
------------------------------------------------------------------------
                                                         Medicare cost
                         Year                               savings
------------------------------------------------------------------------
1....................................................                 $0
2....................................................                  0
3....................................................        318,259,715
4....................................................        318,259,715
5....................................................        318,259,715
6....................................................        318,259,715
7....................................................        318,259,715
8....................................................        318,259,715
9....................................................        318,259,715
10...................................................        318,259,715
                                                      ------------------
    Total 10 Year Savings............................      2,546,077,720
------------------------------------------------------------------------

    Sources of uncertainty about the benefits of the 24/7 RN and 0.55 
RN and 2.45 NA HPRD requirement parallel the cost uncertainty discussed 
earlier but with some differences:
    The benefits estimate assumed that LTC facilities needing RNs and/
or NAs to meet these requirements will hire the necessary staff. It 
does not, however, take into account how changes in the number of hours 
per resident day of other direct care or support staff might affect the 
impact that increasing the RN HPRD will have on Medicare cost savings. 
Some research, however, has found that when States implemented minimum 
hour per day requirements for direct care staff (RNs, LPNs, and NAs), 
LTC facilities responded by reducing indirect care staff, such as 
housekeeping, food service, and activities staff. 185 186 If 
LTC facilities respond to the newly proposed 24/7 RN and 0.55 and 2.45 
NA requirement in similar ways, then benefits of the requirements would 
be lower than what is presented above (see earlier discussion about 
appropriate accounting depending on the consistency between benefit and 
cost analytic approaches).
---------------------------------------------------------------------------

    \185\ Thomas, Kali S., Kathryn Hyer, Ross Andel, and Robert 
Weech-Maldonado. The Unintended Consequences of Staffing Mandates in 
Florida Nursing Homes: Impacts on Indirect-Care Staff, 2010, 
Medicare Care Research and Review, Volume 67, Issue 5, Pages 555-
573.
    \186\ Bowblis, John R., and Kathryn Hyer. Nursing Home Staffing 
Requirements and Input Substitution: Effects on Housekeeping, Food 
Service, and Activities Staff, 2013, Health Services Research, 
Volume 48, Issue 4, Pages: 1539-1550.
---------------------------------------------------------------------------

    The benefits estimate assumed that LTC facilities that exceed the 
24/7 RN and 0.55 RN and 2.45 NA HPRD requirements would maintain RN and 
NA staffing at their current levels. Research examining how LTC 
facilities have responded to State level staffing mandates provides 
mixed evidence for this assumption, with some research finding no 
evidence that LTC facilities exceeding minimum requirements reduce 
staffing, while other research suggests that they do.\187\ If LTC 
facilities reduced RN and NA staffing levels to a level that is closer 
to the minimum requirement, then benefits would be lower than what is 
estimated above.
---------------------------------------------------------------------------

    \187\ Chen, Min M., and David C. Grabowski. Intended and 
Unintended Consequences of Minimum Staffing Standards for Nursing 
Homes, 2015, Volume 24, Pages 822-839.
---------------------------------------------------------------------------

    The benefits estimate assumed that no LTC facilities would obtain 
exemptions from the 0.55 RN and 2.45 NA HPRD requirements, although 
some facilities could obtain such an exemption. Our analysis suggests 
that, using the criteria of being located in an area with a medium 
staffing shortage or being located 20 miles from the nearest LTC 
facility, up to 24 percent of LTC facilities would meet the initial 
criteria for an exemption from the 2.45 NA HPRD requirement while 28 
percent would be eligible for an exemption from the 0.55 RN HPRD 
requirement. Depending on the number of facilities that obtain an 
exemption, the total benefits of the rule could be lower than what is 
presented above.
    States could vary in how they respond to the increased staffing 
requirement, including whether they pay at least some of the additional 
nursing staffing costs with Medicaid funds. Benefits consequences are 
contingent upon such choices. For example, if overall Medicaid spending 
does not increase, but funds are shifted from other uses to increased 
LTC facility staffing, there would be negative health benefits for the 
patients experiencing reduced Medicaid coverage.
c. Transfers Associated With the 24/7 RN and 0.55 RN and 2.45 NA HPRD 
Minimum Staffing Requirements
    We do not estimate transfers associated with the 24/7 RN and 0.55 
RN and 2.45 NA HPRD minimum staffing portion of this rule since there 
are no requirements that Medicare, Medicaid and other non-Medicare/
Medicaid payors increase payment rates in response to these 
requirements. In Tables 21 and 22, however, we do provide a breakdown 
of how much of the estimated cost from the proposed rule is due to LTC 
residents whose stay is covered by each payor type

[[Page 61418]]

(Medicare, Medicaid, and other non-Medicare/Medicaid payors).
(5) Medicaid Institutional Payment Transparency Reporting Provision 
Impacts
    Under our authority at sections 1902(a)(6) and (a)(30) of the Act 
with regard to fee-for-service delivery systems, and sections 
1902(a)(4) and 1932(c) of the Act with regard to managed care, we are 
proposing new reporting requirements at Sec. Sec.  442.43(b) and 
442.43(c) for States to report annually, by facility and by delivery 
system, on the percent of payments for Medicaid-covered services 
delivered by nursing facilities and ICF/IIDs that are spent on 
compensation for direct care workers and support staff.
    Under this proposal, States would be required to report annually to 
us on the percent of payments for nursing facility and ICF/IID services 
that are spent on compensation for direct care workers and support 
staff. We are considering additional requirements that States report on 
median hourly wages for direct care workers and support staff in these 
facilities, and the State's FFS per diem rates for nursing facility and 
ICF/IID services. (The estimated costs of these additional proposals 
have been factored into our overall cost estimates.) We are proposing 
that States would be required to post all reported data on a State-
maintained website, which States would review quarterly to ensure the 
information remains accurate and up-to-date. We believe that gathering 
and sharing data about the amount of Medicaid dollars that are going to 
the compensation of workers is a critical step in the larger effort to 
understand the ways we can enact policies that support the 
institutional care workforce and thereby help advance access to high 
quality care for Medicaid beneficiaries.
a. Costs of Medicaid Institutional Payment Transparency Reporting
    As outlined in the Collection of Information (section IV. of this 
proposed rule), we estimate implementation costs to States of $622,551 
to come into compliance with the reporting requirements proposed at 
Sec. Sec.  442.43(b) and 442.43(c); we estimate an annual total cost of 
$97,470 once the reporting requirement went into effect. Additionally, 
under our proposal at Sec.  442.43(d), States would be required to make 
this information available on a public website; as outlined in the 
Collection of Information (section IV. of this proposed rule) we 
estimate an implementation cost to States of $239,333 and an ongoing 
annual cost of $295,527 once reporting starts. The total State costs 
for both the proposed reporting and website requirements are thus 
estimated at $861,884 for implementation costs ($622,551 + $239,333) 
and $392,997 ongoing annual costs once the reporting starts ($97,470 + 
$295,527).
    However, as discussed in the Collection of Information (section IV. 
of this proposed rule) the Federal Government, through Federal 
Financial Participation, has a share in State Medicaid expenditures. 
For the purposes of this proposal, we have estimated that the Federal 
share of States' Medicaid expenditures is 50 percent. This means that 
the States and the Federal Government will each have a 50 percent share 
in the costs estimated in the prior paragraph. Therefore, we estimate 
that the States' and Federal Government's shares of the implementation 
costs for the proposals would be $430,942 ($861,864 x 0.5) and ongoing 
annual costs once the requirements took effect of $196,498 ($392,997 x 
0.5).
    As discussed in the Collection of Information (section IV. of this 
proposed rule) we estimate that the total cost to providers to prepare 
for compliance with the reporting requirement proposed at Sec.  
442.43(b) and (c) would be $36,560,002, and an annual total cost to 
providers of $17,912,717.
    We do not estimate a cost to providers for the website posting 
requirement proposed at Sec.  442.43(d). We also do not anticipate 
costs to beneficiaries associated with either the proposed reporting 
requirement or the proposed website posting requirement.
    Table 29 provides a detailed summary of the estimated costs of each 
of the provisions for States, the Federal Government, and providers. 
Table 30 summarizes the estimated costs of the provisions in Sec.  
442.43 for States, the Federal Government, and providers (Nursing Care 
Facilities (NAICS 623110) and Residential Intellectual and 
Developmental Disabilities Facilities (NAICS 623210)), over 10 years. 
Aside from regulatory review costs (discussed in the next section) this 
comprises the entirety of anticipated quantifiable costs associated 
with proposed changes to part 442, subpart B. The implementation costs 
associated with the proposed reporting and website posting requirements 
are split evenly over the years leading up to the proposed effective 
date, which is 4 years from the final rule's publication. For States 
and the Federal Government, this means that the implementation costs 
are represented as $107,736 per year for 4 years ($430,942 estimated 
implementation costs/4 years). For providers, the implementation costs 
are represented as $9,140,000 per year for 4 years ($36,560,002 
estimated implementation costs/4 years). We also anticipate that once 
the rule goes into effect in Year 5, the ongoing annual costs will be 
relatively stable. We have shown the recurring annual estimate for 
Years 5-10 in Table 30. The estimates below do not account for higher 
costs associated with medical care; the costs calculated here are 
related exclusively to reporting and website posting costs. Per OMB 
guidelines, the projected estimates for future years are reported in 
real (non-inflation-indexed) dollars.
    As discussed in the Collection of Information (section IV. of this 
proposed rule), costs were based on: (1) the number of States 
(including Washington, DC and certain territories) that currently 
operate Medicaid programs that cover nursing facility or ICF/IID 
services; (2) the number of States that deliver long-term services and 
supports through managed care; and (3) the total number of freestanding 
Medicaid-certified nursing facility and ICF/IID facilities in all 
States. We do not anticipate the number of entities changing 
significantly over the 10 years included in the cost calculations.

                               Table 29--Implementation and Annual Costs Detailed
----------------------------------------------------------------------------------------------------------------
                                                                               Implementation    Ongoing annual
                                    Cost to      Cost to        Costs to       burden overall    burden overall
                                   states ($)  federal ($)    providers ($)       total ($)         total ($)
----------------------------------------------------------------------------------------------------------------
Reporting--Implementation.......      311,275      311,275        36,560,002        37,182,552  ................
Reporting--Recurring annual            48,735       48,735        17,912,717  ................        18,010,187
 starting Year 5................
Website--Implementation.........      119,667     1196,667                 0           239,333  ................
Website--Recurring annual             147,763      147,763                 0  ................           295,526
 starting Year 5................
                                 -------------------------------------------------------------------------------

[[Page 61419]]

 
    Total.......................      627,440      627,440        54,472,719        37,421,886        18,305,713
----------------------------------------------------------------------------------------------------------------


             Table 30--Projected Distribution of Costs for Proposed Updates to 42 CFR 442 Subpart B
----------------------------------------------------------------------------------------------------------------
                                                                                                    Total costs
                                                                       Federal                      associated
                         Year                           State costs     costs     Provider costs    with  Sec.
                                                                                                      442.43
----------------------------------------------------------------------------------------------------------------
1.....................................................      107,736      107,736       9,140,000       9,355,472
2.....................................................      107,736      107,736       9,140,000       9,355,472
3.....................................................      107,736      107,736       9,140,000       9,355,472
4.....................................................      107,736      107,736       9,140,000       9,355,472
5.....................................................      196,498      196,498      17,912,717      18,305,713
6.....................................................      196,498      196,498      17,912,717      18,305,713
7.....................................................      196,498      196,498      17,912,717      18,305,713
8.....................................................      196,498      196,498      17,912,717      18,305,713
9.....................................................      196,498      196,498      17,912,717      18,305,713
10....................................................      196,498      196,498      17,912,717      18,305,713
                                                       ---------------------------------------------------------
    10 Year Total Cost................................    1,609,930    1,609,930     144,036,304     147,256,164
----------------------------------------------------------------------------------------------------------------

b. Benefits of Medicaid Institutional Payment Transparency Reporting
    Our proposal is intended to support the sufficiency of the direct 
care and support staff workforce through public reporting of the direct 
payments to these workers. The immediate benefits (and the intermediate 
costs in the cause-and-effect chain connecting reporting to long-term 
benefits) are difficult to quantify. However, we believe that these 
provisions, if finalized, will pave the way for long-term benefits to 
Medicaid beneficiaries and help hold States accountable for ensuring 
that Medicaid payments are sufficient to enlist enough workers so that 
high quality LTSS are available to the beneficiaries who want and 
require such care.
    We believe that compensation levels are a factor in the creation of 
a stable workforce, and that a stable workforce will result in better 
qualified employees, lower turnover, and a higher quality of 
care.188 189 If individuals are attracted to the 
institutional LTSS workforce and incentivized to remain employed in it, 
the workforce is more likely to be comprised of workers with the 
training, expertise, and experience to meet the diverse and often 
complex needs of individuals with disabilities and older adults 
residing in institutions. As discussed above, a consistent, adequate 
direct care workforce can reduce reliance on overtime and costlier 
temporary staff and reduce the incidence of emergency department visits 
and hospitalizations.190 191 192
---------------------------------------------------------------------------

    \188\ See, for example, the discussion of low wages among direct 
care workers in Campbell, S., A. Del Rio Drake, R. Espinoza, K. 
Scales. 2021. Caring for the future: The power and potential of 
America's direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \189\ See, for example, the discussion of the relationship 
between staff turnover and nursing home quality in Zheng Q, Williams 
CS, Shulman ET, White AJ. Association between staff turnover and 
nursing home quality--evidence from payroll-based journal data. J Am 
Geriatr Soc. 2022 Sep;70(9):2508-2516. doi: 10.1111/jgs.17843. Epub 
2022 May 7. PMID: 35524769.
    \190\ Ochieng, N., Chidambaram, P., Musumeci, M. Nursing 
Facility Staffing Shortages During the COVID-19 Pandemic. Apr 04, 
2022. Kaiser Family Foundation. Accessed at https://www.kff.org/coronavirus-covid-19/issue-brief/nursing-facility-staffing-shortages-during-the-covid-19-pandemic/.
    \191\ Harrington, C., Carrillo, H., Garfield, R., Squires, E. 
Nursing Facilities, Staffing, Residents and Facility Deficiencies, 
2009 Through 2016. Apr 03, 2018. Kaiser Family Foundation. Accessed 
at https://www.kff.org/report-section/nursing-facilities-staffing-residents-and-facility-deficiencies-2009-through-2016-staffing-levels/.
    \192\ Min A, Hong HC. Effect of nurse staffing on 
rehospitalizations and emergency department visits among short-stay 
nursing home residents: A Cross-sectional study using the US Nursing 
Home Compare database. Geriatr Nurs. 2019 Mar-Apr;40(2):160-165. 
doi: 10.1016/j.gerinurse.2018.09.010. Epub 2018 Oct 4. PMID: 
30292528.
---------------------------------------------------------------------------

    There are many factors that contribute to understaffing in 
institutional settings. We are constantly seeking opportunities to 
address these challenges through guidance, policies, and rulemaking. 
These provisions in this proposed rule are intended to promote 
transparency around compensation for direct care workers and support 
staff. We believe that gathering and sharing data about the amount of 
Medicaid payments going to the compensation of workers is a critical 
step in the larger effort to understand the ways we can enact future 
policies that support the institutional care workforce.
c. Transfers Associated With Medicaid Institutional Payment 
Transparency Reporting
    We do not estimate transfers associated with these proposed 
provisions.

D. Alternative Direct Care Staff HPRD Requirement Considered

    As detailed in this proposed rule, despite the existing 
requirements and the efforts to improve safety, as well as residents' 
quality of care and quality of life through the revisions in the 2016 
final rule, understaffing in LTC facilities continues to be a concern. 
We believe the changes we have proposed are consistent with current 
standards of practice and necessary to increase resident safety and 
quality of care. We acknowledge, however, there are multiple avenues 
for establishing a minimum nurse staffing requirement and solicit 
comments on alternative policy options, including a specific comment 
solicitation in the ``Provisions of the Proposed Regulation'' section.
    In developing the proposed rule, we considered varying staffing 
models that are available and different approaches we could have 
adopted for the proposed minimum nurse staffing requirement. We could 
have adopted multiple different types of combinations of a

[[Page 61420]]

staffing requirement such as separate requirements for RNs, LVNs/LPNs, 
and NAs or defining requirements for licensed nurse staffing, that is, 
combining RNs and LVNs/LPNs or creating standards for NAs only. 
Alternatively, we could have adopted non-nurse staffing requirements 
such as social workers, therapists, feeding assistants and other non-
nurse staffing types in the minimum staffing requirement. Alternative 
minimum staffing policy options could also focus on the need to 
increase or decrease the number of HPRD or FTEs by nurse staff and/or 
type or on specifying the number by shift (including day, evening, 
night, or weekends or over a 24-hour period).
    Ultimately, we chose the comprehensive 24/7 RN and 0.55 RN and 2.45 
NA HPRD requirements in this proposed rule to strike a balance between 
ensuring resident health and safety, while preserving access to care, 
including discharge to community-based services. We considered a 
staffing standard that would maintain the 24/7 and 2.45 NA HPRD 
requirements but would have a lower RN HPRD requirement. We found, 
however, that even a small reduction in the RN HPRD requirement would 
lead to a large decline in quality of care. For example, the 2022 
Nursing Home Staffing Study \193\ found that reducing the case-mix 
adjusted RN HPRD requirement to between 0.45 and 0.52 hours per 
resident day would lead the staffing standard to have a smaller impact 
on Medicare savings, reduced hospitalizations and ED visits, and fewer 
community discharges. More specifically, the number of reduced 
hospitalizations would decline from 10,445 to 5,781, the number of 
reduced ED visits would decline from 7,525 to 4,466, increased 
community discharges would decline from 5,798 to 3,930, and Medicare 
savings would decline by more than $130 million annually.
---------------------------------------------------------------------------

    \193\ Please see Exhibit 4.50. Predicted Medicare Savings and 
Changes in Utilization for Potential Minimum RN Staffing Options.
---------------------------------------------------------------------------

    We seek comments on choosing a lower HPRD minimum staffing 
requirement. In particular, how a lower minimum staffing requirement 
may influence quality of care and resident safety, as well as access to 
care.
    We also considered alternative minimum staffing requirements at 
higher levels than the one we proposed. To illustrate this approach, we 
considered an alternative minimum staffing requirement that would 
retain the 24/7 RN requirement but would increase the minimum HPRD 
requirement. More specifically, this alternative minimum requirement 
would include a minimum staffing level of 0.55 RN HPRD, 2.45 NA HPRD, 
and 3.48 total nurse staff (RN, LPN/LVN, NA) HPRD. It is important to 
note that these estimates do not include the exemption criteria, which 
could significantly reduce the rule's cost.
    To estimate the incremental impact of the Minimum Nurse Staffing 
Requirement of 0.55 RN HPRD, 2.45 NA HPRD, and 3.48 total nurse staff 
HPRD, we used the same methodology described in section VI.C.1 to first 
estimate the cost of facilities meeting the 0.55 RN and 2.45 NA hours 
per resident day, minimum staffing requirement. After accounting for 
any increase in RN and NA hours per resident day needed to meet the 
0.55 RN and 2.45 NA requirements, we then calculated the total number 
of additional hours per resident day of nurse care that LTC facilities 
would need to provide to meet the 3.48 HPRD total nurse staff 
requirement. We did this calculation by subtracting the total nurse 
staff hours (RN, LVN/LPN, and NA) provided from 3.48 using the 
following formula: [3.48-(RN HPRD +LVN/LPN HPRD + NA HPRD)]. For any 
facilities that were below the 3.48 total nurse staff requirement, we 
assumed that they would hire NAs to fulfill any remaining hours. Using 
this strategy, we estimate that this alternative HPRD option would have 
an annual cost of approximately $4.25 billion for all facilities.
    This $4.25 billion estimate assumed that LTC facilities would 
respond to the minimum staffing requirement by increasing their RN and 
NA staffing levels to the level necessary to meet the requirements, 
without reducing other staff such as administrative staff. We also 
assumed LTC facilities that were above the minimum staffing 
requirements for RNs or total nurse staff hours per resident day would 
not decrease their staffing levels to the mandated minimum. Finally, we 
assumed that LTC facilities would not lay off LVNs/LPNs and replace 
them with NAs, who are less costly. If facilities covered under this 
proposed rule reduced other staff not covered by the rule, reduced 
nurse staff levels to the mandate minimum, or they obtained exemptions 
from the minimum staffing requirements, the requirement's cost and 
benefits could decline significantly relative to what is presented 
above. Non-quantified effects, such as costs associated with LTC 
closure or reduction in patient load per facility, would also be 
reduced).
    Table 31 summarizes the 10-year total cost for this alternative 
minimum nurse staffing proposal in 2021 US dollars. The total cost for 
this alternative proposal included the 24/7 RN requirement, the 3.48 
HPRD requirement, and any associated collection of information costs as 
described in section IV. Collection of Information Requirement. To 
account for changes in real nurse staff wages over time, we assumed 
that real wages would rise at a rate of 2.31 percent annually. Since 
this estimate continued to assume that the rule would have different 
phase-in periods for rural and urban LTC facilities to meet the 24/7 RN 
(2 years for facilities in urban areas and 3 years for facilities in 
rural areas) and the 0.55 RN HPRD, 2.45 NA HPRD, and 3.48 total nurse 
staff (RN, LPN/LVN, NA) HPRD (3 years for facilities in urban areas and 
5 years for facilities in rural areas) requirements, we provided 
separate estimates for facilities located in each area. Over a 10-year 
period, we anticipated an average annual cost of approximately $4.08 
billion.

                                             Table 31--Cost for Alternative Minimum Nurse Staffing Requirement of 3.48 Total Hours per Resident Day
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Collection of    Collection of                                          0.55 RN, 2.45 NA,  0.55 RN, 2.45 NA,
                                                                  information   information costs       24/7 RN            24/7 RN         and 3.48 total     and 3.48 total
                                                                costs for 24/7     for facility       Requirement        Requirement         nurse HPRD         nurse HPRD
                             Year                                  RN (Sec.      assessment (Sec.        (urban             (rural          Requirement        requirement         Total cost
                                                                483.35 nursing    483.71 facility     facilities)        facilities)           (urban             (rural
                                                                   services)       assessment)                                              facilities)        facilities)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.............................................................      $7,461,504        $24,176,448                 $0                 $0                 $0                 $0        $31,637,952
2.............................................................       7,633,865         24,734,924        213,764,107                  0                  0                  0        246,132,896

[[Page 61421]]

 
3.............................................................       7,810,207         25,306,301        218,702,058        146,603,030      3,675,431,549                  0      4,073,853,145
4.............................................................       7,990,623         25,890,876        223,754,076        149,989,560      3,760,334,018                  0      4,167,959,153
5.............................................................       8,175,206         26,488,955        228,922,795        153,454,319      3,847,197,733        808,635,699      5,072,874,708
6.............................................................       8,364,053         27,100,850        234,210,912        156,999,114      3,936,068,001        827,315,184      5,190,058,114
7.............................................................       8,557,263         27,726,880        239,621,184        160,625,793      4,026,991,172        846,426,164      5,309,948,456
8.............................................................       8,754,936         28,367,371        245,156,433        164,336,249      4,120,014,668        865,978,609      5,432,608,265
9.............................................................       8,957,175         29,022,657        250,819,547        168,132,416      4,215,187,007        885,982,714      5,558,101,516
10............................................................       9,164,086         29,693,081        256,613,478        172,016,275      4,312,557,827        906,448,915      5,686,493,661
                                                               ---------------------------------------------------------------------------------------------------------------------------------
    10 Year Total Cost........................................      82,868,918        268,508,343      2,111,564,589      1,272,156,756     31,893,781,974      5,140,787,285     40,769,667,866
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    As we have previously noted, this rule does not require payors to 
increase payment rates to providers to meet the expected costs of the 
minimum staffing and 24/7 RN requirements. Below, however, we provide 
estimates of how much of facilities' costs to meet the minimum staffing 
and 24/7 RN requirements are due to residents whose stays are covered 
by Medicaid, Medicare, and other non-Medicare/Medicaid payors.
    Table 32 lays out the share of the facility's cost to meet the 
requirement that is due to residents utilizing Medicaid, with an 
average annual cost of approximately $2.68 billion in 2021 US dollars 
over a 10-year period. Table 33 lays out the share of the facility's 
cost that is due to residents utilizing Medicare and other non-
Medicare/Medicaid payors, with an average annual cost of approximately 
$453 million for Medicare and $884 million for other payors in 2021 US 
dollars over a 10-year period. These estimates were based on the 
assumptions listed in section VI.C.1.a.(3) of this proposed rule.
    We seek comments on choosing a higher HPRD minimum staffing 
requirement. In particular, we welcome comments regarding how a higher 
minimum staffing requirement may influence quality of care and resident 
safety, as well as access to care.
BILLING CODE 4120-01-P

[[Page 61422]]

[GRAPHIC] [TIFF OMITTED] TP06SE23.003


[[Page 61423]]


[GRAPHIC] [TIFF OMITTED] TP06SE23.004

BILLING CODE 4120-01-C

[[Page 61424]]

2. Medicaid Institutional Payment Transparency Reporting
    We considered proposing to require in Sec.  442.43(b) that States 
report at the beneficiary level or other more granular levels but did 
not include such requirements because we expected that this would 
increase reporting burden for States and providers without giving us 
additional information necessary for determining the percent of 
payments that are going to the workforce.
    We also considered whether to allow States, at their option, to 
exclude from their reporting to CMS payments to providers that have low 
Medicaid revenues or serve a small number of Medicaid beneficiaries, 
based on Medicaid revenues for the service, or the number of Medicaid 
beneficiaries receiving the service. We considered this option as a way 
to reduce State and provider data collection and reporting burden based 
on the experience of States that have implemented similar reporting 
requirements. However, we are concerned that such an option could 
discourage providers from serving Medicaid beneficiaries or increasing 
the number of Medicaid beneficiaries served.

E. Regulatory Review Costs

1. Regulatory Review Costs of 24/7 RN and 0.55 RN and 2.45 NA HPRD 
Minimum Nurse Staffing
    If the 24/7 RN and the Minimum Nurse staffing proposals impose 
administrative costs on private entities, such as the time needed to 
read and interpret this proposed rule, we should estimate the cost 
associated with regulatory review. As discussed in the Collection of 
Information (section III. of this proposed rule), 14,688 LTC facilities 
would be impacted by the proposed requirements. We assume that seventy-
five percent (75 percent) of LTC facilities will proactively review 
this proposed rule, or 11,016. (We note that the FY 2023 SNF PPS 
proposed rule, 87 FR 22720, had around 18,000 views, as shown at 
https://www.federalregister.gov/documents/2022/04/15/2022-07906/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities. Some of these views were likely 
multiple views by the same reader.) We acknowledge that this assumption 
may understate or overstate the costs of reviewing this rule. It is 
possible that not all of the affected LTC facilities will read this 
proposed rule, or that there may be more than one individual reviewing 
the rule for some LTC facilities. It is also possible that entities 
other than LTC facilities, such as beneficiary advocacy groups, may 
review this rule. We welcome any comments on the approach in estimating 
the number of LTC facilities which will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of some proposed rules, 
or that some entities may not find it necessary to fully read each 
rule, and therefore for the purposes of our estimate we assume that 
each reviewer will read approximately 50 percent of the section of the 
rule discussing the 24/7 RN requirement and the 0.55 RN and 2.45 NA 
HPRD requirement.
    We seek comments on this assumption.
    Using the wage information from the Bureau of Labor Statistics, May 
2022 National Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/oes_nat.htm, for medical and health service 
managers (Code 11-9111), we estimate that the cost of reviewing this 
rule is $123.06 per hour, including overhead and fringe benefits. 
Assuming an average reading speed of 250 words per minute, and assuming 
that two-thirds (67 percent) of this proposed rule pertains to the 24/7 
RN and 0.55 RN and 2.45 NA HPRD requirement, with approximately 40,000 
words (of which we estimate 20,000 words will be read by reviewers), we 
estimate that it would take 80 minutes or 1.33 hours for the staff to 
review all the sections of the proposed rule pertaining to the 24/7 RN 
and 0.55 RN and 2.45 NA HPRD requirements. For each employee that 
reviews the rule, the estimated cost is $163.67 (1.33 hours x $123.06). 
Therefore, we estimate that the total one-time cost of reviewing this 
regulation is $1,802,989 (163.67 x 11,016).
2. Regulatory Review Costs of Medicaid Institutional Payment 
Transparency Reporting
    As discussed in the Collection of Information (section III. of this 
proposed rule), 52 State Medicaid agencies and approximately 19,907 
nursing facilities and ICF/IIDs would be impacted by the proposed 
requirements (totaling 19,959 interested parties). Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that seventy-five percent (75 
percent) of these affected entities will proactively review this 
proposed rule, or 14,969. (We note that the FY 2023 SNF PPS proposed 
rule, 87 FR 22720, had around 18,000 views, as shown at https://www.federalregister.gov/documents/2022/04/15/2022-07906/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities. Some of these views were likely multiple 
views by the same reader.) We acknowledge that this assumption may 
understate or overstate the costs of reviewing this rule. It is 
possible that not all those affected entities will read this proposed 
rule, or that there may be more than one individual reviewing the rule 
for some of the affected entities. It is also possible that entities 
other than State Medicaid agencies or institutional facilities, such as 
beneficiary advocacy groups, may review this rule. We welcome any 
comments on the approach in estimating the number of entities which 
will review this proposed rule. We also recognize that different types 
of entities are in many cases affected by mutually exclusive sections 
of some proposed rules, or that some entities may not find it necessary 
to fully read each rule, and therefore for the purposes of our estimate 
we assume that each reviewer will read half of the sections of the rule 
discussing Medicaid institutional payment adequacy. We seek comments on 
this assumption.
    Using the wage information from the Bureau of Labor Statistics, May 
2022 National Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/oes_nat.htm, for medical and health service 
managers (Code 11-9111), we estimate that the cost of reviewing this 
rule is $123.06 per hour, including overhead and fringe benefits. 
Assuming an average reading speed of 250 words per minute, and assuming 
that one-third of this rule pertains to Medicaid Institutional Payment 
Transparency Reporting, with approximately 20,000 words (of which we 
estimate 10,000 words will be read by reviewers), we estimate that it 
would take 40 minutes or 0.67 hours for the staff to review portions of 
the sections of the proposed rule pertaining to the Medicaid 
Institutional Payment Transparency Reporting. For each employee that 
reviews the rule, the estimated cost is $82.45 (0.67 hours x $123.06). 
Therefore, we estimate that the total one-time cost of reviewing this 
regulation is $1,234,194 ($82.45 x 14,969).
    Table 34 provides the total estimated regulatory review costs for 
the rule, which is $3,037,183.

[[Page 61425]]



                                        Table 34--Regulatory Review Cost
----------------------------------------------------------------------------------------------------------------
                                                                     24/7 RN and 0.55 RN
                                                                       and 2.45 NA HPRD
       Medicaid institutional payment transparency reporting            minimum nurse            Total cost
                                                                           staffing
----------------------------------------------------------------------------------------------------------------
$1,234,194........................................................            $1,802,989             $3,037,183
----------------------------------------------------------------------------------------------------------------

F. Accounting Statement

    As required by OMB Circular A-4 (available online at https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/), we have prepared 
an accounting statement in Table 34 showing classification of the costs 
and benefits associated with the provisions of this proposed rule. This 
includes the total cost for the 24/7 RN and the 0.55 RN and 2.45 NA 
HPRD requirements as provided in Table 20, the total cost for the 
Medicaid Institutional Transparency Reporting as provided in Table 30, 
the total cost for the regulatory review as provided in Table 34, and 
Medicare savings due to fewer hospitalizations and emergency department 
visits, as well as greater return to home and community, as provided in 
Table 28. There are $0 in transfer estimates in the statement. This 
statement provides our best estimate for the Medicare and Medicaid 
provisions of this rule.

     TABLE 35--Accounting Statement: 24/7 RN Requirement, 0.55 RN and 2.45 NA HPRD Requirement, and Medicaid
                            Institutional Payment Transparency Reporting Requirement
----------------------------------------------------------------------------------------------------------------
                                                                                  Units
              Category                    Estimates     --------------------------------------------------------
                                                            Year dollar       Discount rate      Period covered
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/year)                236               2021                 7%          2024-2033
                                                    247               2021                  3          2024-2033
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/year)              3,733               2021                 7%          2024-2033
                                                  3,930               2021                  3          2024-2033
----------------------------------------------------------------------------------------------------------------

G. Regulatory Flexibility Act Analysis (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that 
almost all Skilled Nursing Facilities (NAICS 6231) and Intellectual and 
Developmental Disabilities Facilities (NAICS 6232) are small entities, 
as that term is used in the RFA (including small businesses, nonprofit 
organizations, and small governmental jurisdictions). The great 
majority of hospitals and most other health care providers and 
suppliers are small entities, either by being nonprofit organizations 
or by meeting the Small Business Administration (SBA) definition of a 
small business (that is, having revenues of less than $8.0 million to 
$41.5 million in any 1 year).
    We utilized the revenues of individual SNF providers (from recent 
Medicare Cost Reports) to classify a small business, and not the 
revenue of a larger firm with which they may be affiliated. As a 
result, for the purposes of the RFA, we estimate that almost all SNFs 
are small entities as that term is used in the RFA, according to the 
Small Business Administration's latest size standards, with total 
revenues of $34 million or less in any 1 year. In addition, 
approximately 20 percent of SNFs classified as small entities are non-
profit organizations. Therefore, approximately 95 percent of the health 
care industries impacted are considered small businesses according to 
the Small Business Administration's size standards with total revenues 
of $41 million or less in any 1 year. Individuals and States are not 
included in the definition of a small entity. According to the 2017 
Economic Census, Skilled Nursing Facilities (NAICS 6231) and 
Intellectual and Development Disabilities Facilities (NAICS 6232) 
together earned approximately $162 billion annually with Skilled 
Nursing Facilities earning nearly $119 billion and Intellectual and 
Development Disabilities Facilities earning approximately $44 billion. 
Overall, the cost is estimated to be between 2.30 and 2.42 percent of 
revenues.

                                                      Table 36--Regulatory Flexibility Act Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Cost as %   Cost as %
                                                                                      Estimated average      Estimated average    of revenue  of revenue
                                                                 Annual revenue        annual cost for        annual cost for       with 3%     with 7%
                                                                                      providers with 3%      providers with 7%     discount    discount
                                                                                        discount rate          discount rate         rate        rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Skilled Nursing Facilities and Intellectual and                  $162,451,136,000         $3,733,000,000         $3,930,000,000        2.30        2.42
 Developmental Disabilities Facilities.....................
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 61426]]

    Individuals and States are not included in the definition of a 
small entity. This rule will not have a significant impact measured 
change in revenue of 3 to 5 percent on a substantial number of small 
businesses or other small entities. As its measure of significant 
economic impact on a substantial number of small entities, HHS uses a 
change in revenue of more than 3 to 5 percent. At this time, we do not 
believe that this threshold will be reached by the requirements in this 
proposed rule. Therefore, the Secretary has certified that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of an MSA and has fewer 
than 100 beds. These proposals pertain solely to SNFs and NFs. 
Therefore, the Secretary has determined that these proposals will not 
have a significant impact on the operations of a substantial number of 
small rural hospitals.

H. Unfunded Mandates Reform Act Analysis

    Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2023, that 
threshold is approximately $177 million. Based on the cost estimates 
discussed in this section, we have assessed the various costs and 
benefits of the proposed updates to the requirements for participation 
for LTC facilities. These proposed updates will not impose new 
requirements for State, local, or tribal governments. For the private 
sector facilities, the regulatory impact section, together with the 
remainder of the preamble, constitutes the analysis required under 
UMRA.

I. Federalism Analysis

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule that imposes 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. With 
regard to the updates to the requirements for participation for LTC 
facilities, the provisions in this proposed rule are not intended to, 
and would not preempt the applicability of any State or local law 
providing a higher standard (in this case, a higher HPRD requirement 
for RNs and/or NAs or an RN coverage requirement in excess of at least 
one RN on site 24-hours per day, 7 days a week) than would be required 
by this proposed rule. To the extent Federal standards exceed State and 
local law minimum staffing standards, no Federal pre-emption is 
implicated because facilities complying with Federal law would also be 
in compliance with State law. We are not aware of any State or local 
law providing for a maximum staffing level. This proposed rule, 
however, is intended to and would preempt the applicability of any 
State or local law providing for a maximum staffing level, to the 
extent that such a State or local maximum staffing level would prohibit 
a Medicare, Medicaid, or dually certified LTC facility from meeting the 
minimum HPRD requirements and RN coverage levels proposed in this rule 
or from meeting higher staffing levels required based on the facility 
assessment proposed in this rule.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on August 15, 2023.

List of Subjects

42 CFR Part 438

    Administrative practice and procedure, Grant programs--health, 
Health professions, Medicaid, Older adults, People with Disabilities, 
Reporting and recordkeeping requirements.

42 CFR Part 442

    Administrative practice and procedure, Grant programs--health, 
Health professions, Medicaid, Older adults, People with Disabilities, 
Reporting and recordkeeping requirements.

42 CFR Part 483

    Grant programs--health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 438--MANAGED CARE

0
1. The authority citation for part 438 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
2. Section 438.72 is added to subpart B to read as follows:


Sec.  438.72  Additional requirements for long-term services and 
supports.

    (a) Nursing facilities services and services delivered in 
Intermediate Care Facilities for Individuals with Intellectual 
Disabilities. If the State includes nursing facility and/or ICF/IID 
services in their MCO or PIHP contracts, the State must include 
requirements in these contracts imposing obligations on the MCO or PIHP 
to the extent necessary to comply with the reporting requirements in 
Sec.  442.43 of this subchapter, and must comply by the first rating 
period for contracts with MCOs or PIHPs beginning on or after the 
effective date specified in Sec.  442.43(f) of this subchapter.
    (b) [Reserved]

PART 442--STANDARDS FOR PAYMENT TO NURSING FACILITIES AND 
INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL 
DISABILITIES

0
3. The authority citation for part 442 continues to read as follows:

    Authority:  Sec. 1102 of the Social Security Act (42 U.S.C. 
1302), unless otherwise noted.

0
4. Section 442.43 is added to subpart B to read as follows:


Sec.  442.43  Payment Transparency Reporting.

    (a) Definitions. (1) Compensation means, with respect to direct 
care workers and support staff delivering services authorized under 
this part:
    (i) Salary, wages, and other remuneration as defined by the Fair 
Labor Standards Act and implementing regulations (29 U.S.C. 201 et 
seq., 29 CFR parts 531 and 778);
    (ii) Benefits (such as health and dental benefits, sick leave, and 
tuition reimbursement); and
    (iii) The employer share of payroll taxes.
    (2) Direct Care Worker means one of the following individuals who 
provides services to Medicaid-eligible individuals receiving services 
under this part, who may be employed by or contracted or subcontracted 
with a Medicaid provider or State or local government agency:

[[Page 61427]]

    (i) A registered nurse, licensed practical nurse, nurse 
practitioner, or clinical nurse specialist;
    (ii) A certified nurse aide who provides services under the 
supervision of a registered nurse, licensed practical nurse, nurse 
practitioner, or clinical nurse specialist;
    (iii) A licensed physical therapist, occupational therapist, 
speech-language pathologist, or respiratory therapist;
    (iv) A certified physical therapy assistant, occupational therapy 
assistant, speech-language therapy assistant, or respiratory therapy 
assistant or technician;
    (v) A social worker;
    (vi) A personal care aide;
    (vii) A medication assistant, aide, or technician;
    (viii) A feeding assistant;
    (ix) Activities staff; or
    (x) Any other individual who is paid to provide clinical services, 
behavioral supports, active treatment (as defined at Sec.  483.440) or 
address activities of daily living (such as those described in Sec.  
483.24(b)) for Medicaid-eligible individuals receiving Medicaid 
services under this part.
    (3) Support Staff means an individual who is not a direct care 
worker and who maintains the physical environment of the care facility 
or supports other services for residents. Support staff may be employed 
by or contracted or subcontracted with a Medicaid provider or State or 
local government agency. They include any of the following individuals:
    (i) A housekeeper;
    (ii) A janitor or environmental services worker;
    (iii) A groundskeeper;
    (iv) A food service or dietary worker;
    (v) A driver responsible for transporting residents; or
    (vi) Any other individual who is not a direct care worker and who 
maintains the physical environment of the care facility or supports 
other services for Medicaid-eligible individuals receiving Medicaid 
services under this part.
    (b) Reporting requirements. The State must report to CMS annually, 
by delivery system and by facility, the percent of Medicaid payments 
(which for fee-for-service includes base and supplemental payments as 
defined by section 1903(bb)(2) of the Social Security Act, and for 
payments from a managed care organization or prepaid inpatient health 
plan (as these entities are defined in Sec.  438.2 of this chapter) 
includes the managed care organization's or prepaid inpatient health 
plan's contractually negotiated rate, State directed payments as 
defined in Sec.  438.6(c) of this chapter, pass-through payments as 
defined in Sec.  438.6(a) of this chapter for nursing facilities, and 
any other payments from the managed care organization or prepaid 
inpatient health plan) for services specified in paragraph (b)(1) of 
this section, that is spent on compensation for direct care workers and 
on compensation for support staff, at the time and in the form and 
manner specified by CMS.
    (1) Services. Except as provided in paragraph (b)(2) of this 
section, reporting must be based on all Medicaid payments (including 
but not limited to FFS base and supplemental payments, and payments 
from an MCO or PIHP, as applicable) made to nursing facility and ICF/
IID providers for Medicaid-covered services, with the exception of 
services provided in swing bed hospitals as defined in Sec.  
440.40(a)(1)(ii)(B) of this chapter.
    (2) Exclusion of specified payments. The State must exclude from 
its reporting to CMS payments claimed by the State for Federal 
financial participation under this part for which Medicaid is not the 
primary payer.
    (c) Report contents and methodology. (1) Contents. Reporting must 
provide information necessary to identify, at the facility level, the 
percent of Medicaid payments spent on compensation to:
    (i) Direct care workers at each nursing facility;
    (ii) Support staff at each nursing facility;
    (iii) Direct care workers at each ICF/IID, and
    (iv) Support staff at each ICF/IID.
    (2) Methodology. The State must provide information according to 
the methodology, form, and manner of reporting stipulated by CMS.
    (d) Availability and accessibility requirements. The State must 
operate a website consistent with Sec.  435.905(b) of this chapter that 
provides the results of the reporting requirements specified in 
paragraphs (b) and (c) of this section. In the case of the State that 
implements a managed care delivery system under the authority of 
sections 1915(a), 1915(b), 1932(a), and/or 1115(a) of the Act and that 
includes nursing facility and/or ICF/IID services in their managed care 
organization or prepaid inpatient health plan contracts, the State may 
meet this requirement by linking to individual managed care 
organization or prepaid inpatient health plan websites. The State must:
    (1) Include clear and easy to understand labels on documents and 
links;
    (2) Verify no less than quarterly, the accurate function of the 
website and the current accuracy of the information and links; and
    (3) Include prominent language on the website explaining that 
assistance in accessing the required information on the website is 
available at no cost and include information on the availability of 
oral interpretation in all languages and written translation available 
in each non-English language, how to request auxiliary aids and 
services, and a toll-free and TTY/TDY telephone number.
    (e) Information reported by States. CMS must report on its website 
the results of the reporting requirements specified in paragraphs (b) 
and (c) of this section that the State reports to CMS.
    (f) Effective Date. The requirements in this section are effective 
[4 YEARS AFTER THE EFFECTIVE DATE OF THE FINAL RULE].

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
5. The authority citation for part 483 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1320a-7, 1395i, 1395hh and 1396r.

0
6. Amend Sec.  483.5 by adding the definitions of ``Hours per resident 
day'' and ``Representative of direct care employees'' in alphabetical 
order to read as follows:


Sec.  483.5  Definitions.

* * * * *
    Hours per resident day. Staffing hours per resident per day is the 
total number of hours worked by each type of staff divided by the total 
number of residents as calculated by CMS.
* * * * *
    Representative of direct care employees. A representative of direct 
care employees is an employee of the facility or a third party 
authorized by direct care employees at the facility to provide 
expertise and input on behalf of the employees for the purposes of 
informing a facility assessment.
* * * * *


Sec.  483.10  [Amended]

0
7. Amend paragraph (h)(3)(i) by removing the reference ``Sec.  
483.70(i)(2)'' and adding in its place the reference ``Sec.  
483.70(h)(2)''.


Sec.  483.15  [Amended]

0
8. Amend paragraph (c)(8) by removing the reference ``Sec.  483.70(l)'' 
and adding in its place the reference ``Sec.  483.70(k)''.


Sec.  483.35  [Amended]

0
9. Amend Sec.  483.35 by:

[[Page 61428]]

0
a. In the introductory text removing the reference ``Sec.  483.70(e)'' 
and adding in its place the reference ``Sec.  483.71'';
0
b. Revising paragraphs (a)(1)(i), (ii);
0
c. Adding paragraphs (a)(1)(iii) through (v);
0
d. In paragraph (a)(2) removing the phrase ``paragraph (c)'' and adding 
in its place the phrase ``paragraph (e)'';
0
e. Revising paragraph (b)(1);
0
f. . In paragraph (e)(4) removing the phrase ``paragraph (c)'' and 
adding in its place the phrase ``paragraph (e)'';
0
g. In paragraph (f)(2) removing the phrase ``paragraph (d)(1)'' and 
adding in its place the phrase ``paragraph (f)(1)'';
0
h. Redesignating paragraph (g) as (h);
0
i. Adding a new paragraph (g); and
0
j. In newly redesignated paragraph (h)(2)(i) removing the phrase 
``paragraph (e)(1)'' and adding in its place the phrase ``paragraph 
(h)(1)''.
    The revision and additions read as follows:


Sec.  483.35  Nursing services.

* * * * *
    (a) * * *
    (1) * * *
    (i) Licensed nurses, including but not limited to a minimum 0.55 
hours per resident day for registered nurses (RN); and
    (ii) Other nursing personnel, in accordance with Sec.  483.71, 
including but not limited to a minimum total of 2.45 hours per resident 
day for nurse aides (NA).
    (iii) The 0.55 hours per resident day for RN and 2.45 hours per 
resident day for NA requirement may be exempted under paragraph (g) of 
this section for facilities that are found non-compliant and meet the 
eligibility criteria as determined by the Secretary.
    (iv) Determinations of compliance with hours per resident day 
requirements will be made based on the most recent available quarter of 
Payroll Based Journal System data submitted in accordance with Sec.  
483.70(p) of this part.
    (v) Compliance with minimum hours per resident day for RN and NA 
should not be construed as approval for a facility to staff only to 
these numerical standards. Facilities must ensure there are adequate 
staff with the appropriate competencies and skills sets necessary to 
assure resident safety and to attain or maintain the highest 
practicable physical, mental, and psychosocial well-being of each 
resident, as determined by resident assessments, acuity and diagnoses 
of the facility's resident population in accordance with the facility 
assessment at Sec.  483.71 of this part.
* * * * *
    (b) * * *
    (1) Except when waived under paragraph (e) or (f) of this section, 
the facility must have a registered nurse on site 24 hours per day, for 
7 days a week that is available to provide direct resident care.
* * * * *
    (g) Hardship Exemption from the Minimum Hours Per Resident Day 
Requirements. A facility may be exempted by the Secretary from the 
requirements of paragraphs (a)(1)(i) and (ii) of this section if a 
verifiable hardship exists that prohibits the facility from achieving 
or maintaining compliance. The facility must meet the four following 
criteria to qualify for a hardship exemption:
    (1) Location. The facility is located in an area where:
    (i) The supply of applicable healthcare staff (either RN, or NA, or 
both) is not sufficient to meet area needs as evidenced by a medium (20 
percent below the national average) or low (40 percent below the 
national average) provider-population ratio for nursing workforce; or
    (ii) The facility is at least 20 miles from another long-term care 
facility, as determined by CMS; and
    (2) Good Faith Efforts to Hire. The facility demonstrates that it 
has been unable, despite diligent efforts, including offering at least 
prevailing wages, to recruit and retain appropriate personnel. The 
information is verified through:
    (i) Job listings in commonly used recruitment forums found online 
at American Job Centers (coordinated by the U.S. Department of Labor's 
Employment and Training Administration), and other forums as 
appropriate;
    (ii) Documented job vacancies including the number and duration of 
the vacancies and documentation of offers made, including that they 
were made at least at prevailing wages;
    (iii) Data on the average wages in the Metropolitan Statistical 
Area in which the facility is located and vacancies by industry as 
reported by the Bureau of Labor Statistics or by the State's Department 
of Labor; and
    (iv) The facility's staffing plan in accordance with Sec.  
483.71(b)(4) of this subpart; and
    (3) Demonstrated Financial Commitment. The facility demonstrates 
through documentation the amount of financial resources that the 
facility expends on nurse staffing relative to revenue.
    (4) Exclusions. Facilities must not:
    (i) Be a Special Focus Facility, pursuant to the Special Focus 
Facility Program established under sections 1819(f)(8) and 1919(f)(10) 
of the Act; or
    (ii) Have been cited for having widespread insufficient staffing 
with resultant resident actual harm or a pattern of insufficient 
staffing with resultant resident actual harm, or cited at the immediate 
jeopardy level of severity with respect to insufficient staffing as 
determined by CMS, within the 12 months preceding the survey during 
which the facility's non-compliance is identified, or
    (iii) Have failed to submit Payroll Based Journal data in 
accordance with Sec.  483.70(p).
    (iv) An exemption under this paragraph does not constitute a waiver 
of paragraph (b) of this section. Such a waiver must be granted in 
accordance with paragraph (e) or (f) of this section.
    (5) Determination of Eligibility. The Secretary will determine 
eligibility for an exemption based on the criteria in paragraphs (g)(1) 
through (4) of this section. The facility must provide supporting 
documentation when requested.
    (6) Timeframe. The term for a hardship exemption is 1-year, unless 
the facility becomes an SFF facility or is cited for widespread 
insufficient staffing with resultant resident actual harm or a pattern 
of insufficient staffing with resultant resident actual harm. A 
hardship exemption may be extended on a yearly basis, after the initial 
1-year period, if the facility continues to meet the exemption criteria 
in paragraphs (g)(1) through (4) of this section, as determined by the 
Secretary. There are no limits on the number of exemptions that an 
eligible facility can be granted.
* * * * *


Sec.  483.40  [Amended]

0
10. Amend Sec.  483.40 by:
0
a. In paragraphs (a) introductory text and (a)(1) removing the 
reference ``Sec.  483.70(e)'' and adding in its place the reference 
``Sec.  483.71''; and
0
b. In paragraph (c)(2) by removing the reference ``Sec.  483.70(g)'' 
and adding in its place the reference ``Sec.  483.70(f)''.


Sec.  483.45  [Amended]

0
11. Amend Sec.  483.45 in the introductory text by removing the 
reference ``Sec.  483.70(g)'' and adding in its place the reference 
``Sec.  483.70(f)''.


Sec.  483.55  [Amended]

0
12. In Sec.  483.55 amend paragraphs (a)(1) and (b)(1) by removing the 
reference ``Sec.  483.70(g)'' and adding in its place the reference 
``Sec.  483.70(f)''.


Sec.  483.60  [Amended]

0
13. In Sec.  483.60 amend paragraph (a) introductory text by removing 
the

[[Page 61429]]

reference ``Sec.  483.70(e)'' and adding in its place the reference 
``Sec.  483.71''.


Sec.  483.65  [Amended]

0
14. In Sec.  483.65 amend paragraph (a)(2) by removing the reference 
``Sec.  483.70(g)'' and adding in its place the reference ``Sec.  
483.70(f)''.


Sec.  483.70  [Amended]

0
15. Amend Sec.  483.70 by--
0
a. Removing paragraph (e); and
0
b. Redesignating paragraphs (f) through (q) as paragraphs (e) through 
(p), respectively.
0
16. Section Sec.  483.71 is added to subpart B to read as follows:


Sec.  483.71  Facility Assessment.

    The facility must conduct and document a facility-wide assessment 
to determine what resources are necessary to care for its residents 
competently during both day-to-day operations (including nights and 
weekends) and emergencies. The facility must review and update that 
assessment, as necessary, and at least annually. The facility must also 
review and update this assessment whenever there is, or the facility 
plans for, any change that would require a substantial modification to 
any part of this assessment.
    (a) The facility assessment must address or include the following:
    (1) The facility's resident population, including, but not limited 
to:
    (i) Both the number of residents and the facility's resident 
capacity;
    (ii) The care required by the resident population, using evidence-
based, data-driven methods that consider the types of diseases, 
conditions, physical and behavioral health issues, cognitive 
disabilities, overall acuity, and other pertinent facts that are 
present within that population, consistent with and informed by 
individual resident assessments as required under Sec.  483.20 of this 
part;
    (iii) The staff competencies and skill sets that are necessary to 
provide the level and types of care needed for the resident population;
    (iv) The physical environment, equipment, services, and other 
physical plant considerations that are necessary to care for this 
population; and
    (v) Any ethnic, cultural, or religious factors that may potentially 
affect the care provided by the facility, including, but not limited 
to, activities and food and nutrition services.
    (2) The facility's resources, including but not limited to the 
following:
    (i) All buildings and/or other physical structures and vehicles;
    (ii) Equipment (medical and non-medical);
    (iii) Services provided, such as physical therapy, pharmacy, 
behavioral health, and specific rehabilitation therapies;
    (iv) All personnel, including managers, nursing and other direct 
care staff (both employees and those who provide services under 
contract), and volunteers, as well as their education and/or training 
and any competencies related to resident care;
    (v) Contracts, memorandums of understanding, or other agreements 
with third parties to provide services or equipment to the facility 
during both normal operations and emergencies; and
    (vi) Health information technology resources, such as systems for 
electronically managing patient records and electronically sharing 
information with other organizations.
    (3) A facility-based and community-based risk assessment, utilizing 
an all-hazards approach as required in Sec.  483.73(a)(1).
    (4) The input of facility staff, including, but not limited to 
nursing home leadership, management, direct care staff, the 
representatives of direct care employees, and staff providing other 
services.
    (b) The facility must use this facility assessment to:
    (1) Inform staffing decisions to ensure that there are a sufficient 
number of staff with the appropriate competencies and skill sets 
necessary to care for its residents' needs as identified through 
resident assessments and plans of care as required in Sec.  
483.35(a)(3).
    (2) Consider specific staffing needs for each resident unit in the 
facility, and adjust as necessary based on changes to its resident 
population.
    (3) Consider specific staffing needs for each shift, such as day, 
evening, night, and adjust as necessary based on any changes to its 
resident population.
    (4) Develop and maintain a plan to maximize recruitment and 
retention of direct care staff.
    (5) Inform contingency planning for events that do not require 
activation of the facility's emergency plan, but do have the potential 
to affect resident care, such as, but not limited to, the availability 
of direct care nurse staffing or other resources needed for resident 
care.


Sec.  483.75  [Amended]

0
17. Amend Sec.  483.75 by:
0
a. In paragraph (c)(2) removing the reference ``Sec.  483.70(e)'' and 
adding in its place the reference ``Sec.  483.71''; and
0
b. In paragraph (e)(3) removing the reference ``Sec.  483.70(e)'' and 
adding in its place the reference ``Sec.  483.71''.


Sec.  483.80  [Amended]

0
18. In Sec.  483.80 amend paragraph (a)(1) by removing the reference 
``Sec.  483.70(e)'' and adding in its place the reference ``Sec.  
483.71''.


Sec.  483.95  [Amended]

0
19. In Sec.  483.95 amend the introductory text by removing the 
reference ``Sec.  483.70(e)'' and adding in its place the reference 
``Sec.  483.71''.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-18781 Filed 9-1-23; 8:45 am]
BILLING CODE 4120-01-P