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This article is the latest among a series in response to the latest developments in policy and research affecting the dual-eligible population. Other authors will contribute to the series as well.
The series is produced with the support of Arnold Ventures. Included articles are reviewed and edited by Health Affairs Forefront staff; the opinions expressed are those of the authors.
The series will run through October 31, 2022; submissions are accepted on a rolling basis.
On April 6, the National Academies of Science, Engineering, and Medicine (NASEM) Committee on Nursing Home Quality released its report, The National Imperative to Improve Nursing Home Quality. The report unequivocally states, “The way in which the United States finances, delivers, and regulates care in nursing home settings is ineffective, inefficient, fragmented, and unsustainable.”
Nursing homes are one piece of a complex and fraying system of care for dually eligible individuals who require long-term services and supports (LTSS). Seventeen percent of dual-eligible beneficiaries use institutional LTSS (largely nursing home services), and 26 percent use home and community-based services (HCBS), which includes home health care, personal care, adult day health programs, assisted living, and durable medical equipment. The LTSS system as a whole is underfunded, highly localized, and segregated from the broader health care ecosystem. Unlike federal requirements that establish nursing home services as a mandatory Medicaid benefit, HCBS benefits are optional for states and provided through multiple Medicaid waiver programs, making this sector even more fragile.
Throughout the COVID-19 pandemic, the long-term care ecosystem has been exceptionally vulnerable. And the most vulnerable were hardest hit: Nursing homes that serve more racial and ethnic minority residents experienced the highest COVID-19 infection and mortality rates in 2020, exacerbating long-standing disparities in quality of care.
The NASEM report provides a comprehensive set of recommendations that encompass care delivery models, emergency response, physical layouts of nursing homes, workforce concerns, transparency of finances and ownership, long-term care ombudsmen programs, quality measurement and oversight, and health information technology. In this article, we discuss how several NASEM committee recommendations for nursing homes could affect the LTSS system as a whole—and we highlight where coordination of Medicare and Medicaid services may pose particular challenges and opportunities for the care of dually eligible individuals.
The COVID-19 pandemic exacerbated shortages of direct-care workers, creating daily struggles and burdens for consumers and family members. Many factors that predate the pandemic have contributed to these shortages, including low wages, the lack of benefits such as sick leave, and a lack of opportunities for career advancement. Even prior to the pandemic, staffing levels were less than the estimated level of need, with every one nursing assistant supporting an average of 12 residents per shift. Women of color and immigrants are more likely to be direct-care workers, raising concerns about how to equitably address compensation and workplace satisfaction for this critical part of the LTSS workforce.
One of the NASEM report’s most important recommendations is ensuring competitive wages and benefits for nursing home staff, an issue that is also paramount for the HCBS workforce. Across community and nursing homes settings, the average hourly wage for a direct-care worker in 2020 was $13.56. Nursing homes, HCBS providers, and consumers seeking to hire personal care attendants (PCAs) under Medicaid-established payment rates are competing with other health care providers (and non-health care employers) that offer higher compensation and more consistent scheduling.
Increasing direct-care workforce wages requires funding: A complementary NASEM report recommendation suggests requiring that a minimum percentage of Medicare and Medicaid payments to nursing homes be devoted to direct care rather than expenses such as lease payments or administrative services. This strategy, which could also be adopted for HCBS providers, would provide a longer-term solution for supporting the direct-care workforce than the emergency funding provided to states by the American Rescue Plan Act (ARPA). States’ initial plans for ARPA funds varied widely in whether they were used to improve compensation for the direct-care workforce. Among the 24 states that provided budget information on proposed workforce stabilization initiatives in their ARPA plans, 38 percent of total dollars ($6.29 billion out of $16.76 billion) was allocated to workforce stabilization. The actual proportion of ARPA funds that will be paid to workers is likely only a small fraction of the total.
Beyond compensation and benefits, ensuring that direct-care workers are entering safe, supportive workplaces is also critical. A host of NASEM report recommendations may help both workers and nursing home residents: increasing minimum staffing requirements, improving infection control practices, ensuring adequate access to personal protective equipment, and creating opportunities for career advancement and free training. Given that dual-eligible individuals are more likely to be discharged to nursing homes with low nurse staffing ratios, they may especially benefit from improvements in staffing.
Outside of nursing homes and beyond the scope of the NASEM report, new community models of LTSS staffing could target HCBS-specific issues. Among these models are approaches such as clustering care so that PCAs can more easily provide care to more than one individual. Workforce retention could be improved by addressing disruptions in pay that occur when Medicaid HCBS programs disallow payments for PCAs while a dual-eligible beneficiary is hospitalized (and thus receiving Medicare-financed care).
Low Medicaid payment rates leave nursing homes dependent on cross-subsidization from Medicare and private payers to cover costs for LTSS residents. This two-tiered system leads to profound disparities in quality of care, with facilities with more Medicaid residents having fewer resources and poorer outcomes. To address this issue, the NASEM report recommends that the Centers for Medicare and Medicaid Services (CMS) use detailed and accurate nursing home financial information to ensure that Medicaid nursing homes payments are adequate to cover the delivery of comprehensive, high-quality, and equitable care.
Addressing low Medicaid payment rates is critical for the feasibility of another NASEM committee recommendation: expanding Medicare’s alternative payment models to cover more postacute care in nursing homes through measures such as expanding bundled payments to all types of hospital discharges. These models give hospitals and clinicians a financial incentive to improve postacute outcomes, potentially leading to more collaborative care with LTSS providers and better care transitions. The NASEM report highlights that alternative payment models could also be used to reward nursing homes that reduce disparities in quality of care.
However, as the NASEM report recognizes, alternative payment models—such as bundled payments and accountable care organizations—have largely saved money by reducing postacute service use in nursing homes, potentially cutting off a Medicare-funded lifeline for nursing homes that cannot operate on Medicaid revenue alone. Reducing postacute use of nursing homes may lead to individuals being discharged directly home from hospitalizations with greater care needs, which for dual-eligible beneficiaries would increase the strain on Medicaid-funded HCBS resources. Expanding Medicare alternative payment models without increasing Medicaid nursing home and HCBS payment rates could be unsustainable for LTSS providers and the dual-eligible populations they serve.
Demonstrations of Medicare alternative payment models that include long-term services and supports, which the NASEM committee also recommended, could echo ongoing efforts to integrate Medicaid-funded LTSS benefits and Medicare benefits through managed care plans. It is harder to imagine the broad adoption of provider-led models that incorporate LTSS. The Program of All-Inclusive Care for the Elderly, for example, is a long-standing provider-led alternative payment model that combines adult day center LTSS and Medicare-funded services. But with a national enrollment of a little more than 52,000, the model has very limited reach
How can dual-eligible beneficiaries and their families choose a nursing home that offers the best quality care? CMS’s Care Compare website displays star ratings for nursing homes based on three distinct types of information: staffing, performance on inspections, and quality measures. Yet, the quality component does not include any resident or family-reported outcome measures, even though these measures are commonly collected by many other types of providers across the health care system and are essential for understanding person-centered aspects of care quality. The Committee recommends adding standard measures of resident and family experience to Care Compare, as well as improving the methodology used for publicly reported measures in Care Compare.
In addition to expanding the quality measures collected about nursing homes, the NASEM committee recommends more transparency and standardized reporting on nursing home ownership and operations to allow comparisons of quality performance and care deficiencies across commonly owned facilities. This recommendation could apply to multiple LTSS sectors—such as home health, hospice, and managed care—that have a large presence of for-profit providers and chains, but few options for identifying and comparing quality across large organizations.
Nursing home oversight relies heavily on state survey agencies for routine nursing home inspections and investigations of complaints and adverse events. However, the NASEM report documents decades of evidence showing failures in the survey process to properly identify serious care problems, to fully correct and prevent recurrent problems, and to investigate complaints in a timely manner. The report notes that oversight was further compromised during the COVID-19 pandemic, with increasing backlogs for standard surveys and decreased documentation of complaints. The NASEM Committee recommends that CMS shore up support for and oversight of state survey agencies, along with enhanced oversight of poorly performing facilities and greater use of enforcement mechanisms, up to and including potentially terminating those facilities’ participation in Medicare and Medicaid. The NASEM Committee also proposes strengthening the long-term care ombudsman program, which it identifies as having a positive impact as an advocate for residents.
While the charge of the NASEM report was focused on nursing homes, the home- and community-based LTSS system was also severely challenged through the pandemic. The majority of Medicaid LTSS spending is now devoted to HCBS, but there remains a fundamental asymmetry between these parts of the continuum of care, as institutional care is a mandatory benefit while HCBS is not. Under the current system, states are frequently managing several HCBS programs and waivers, with varying eligibility criteria and benefits. There is also tremendous variability across states in terms of who qualifies for HCBS, the length of waiting lists, and covered services. This variation can further complicate coordination between traditional Medicare or Medicare managed care and local HCBS benefits.
The Bipartisan Policy Center testified to the Senate Aging Committee in March about its proposal to simplify and streamline states’ HCBS and state plan authorities in a single state plan amendment. That same month, the Medicaid and CHIP Payment and Access Commission public meeting included a discussion of “flipping the benefit” such that HCBS would become the default benefit under Medicaid, rather than institutional care, and discussed the possibility of creating a core HCBS benefit. Such initiatives must balance the advantages of a more straightforward, consistent HCBS benefit with the potential risk of eroding existing programs.
Many of the Committee recommendations will require greater investment in the long-term care system, raising a bigger conversation about how the nation should pay for LTSS. Public financing of LTSS, which is through Medicaid, is limited and highly variable across states. Many Americans rely heavily on informal caregivers, such as family members, for their long-term care needs. These public and informal systems were profoundly strained by the pandemic.
Creating a federal long-term care benefit would provide a more consistent and secure benefit. For dually eligible individuals, it also has the potential to ease some of the current challenges resulting from lack of coordination between Medicare and Medicaid by standardizing LTSS coverage nationally. However, this would create a large federal expenditure that may be politically and fiscally untenable, and there are risks as well of moving this benefit into a federally funded and administered program, and away from local control. The demise of the Community Living Assistance Services and Supports program illustrates the challenges in threading the needle to create a program that is politically feasible, financially sustainable, and affordable to consumers.
The NASEM committee, with one dissenting vote, recommended that the Department of Health and Human Services study a federal long-term care benefit and that CMS launch state demonstrations to test this benefit before launching it nationally. One potential model is the Well-Being Insurance for Seniors to be at Home (WISH) Act that has been introduced in Congress. The WISH Act creates a catastrophic public program for LTSS delivered in the community or in nursing homes that would begin paying a benefit of $3,600 per month only after an individual has a LTSS need that lasts one to five years, with the waiting period based on income.
The report explains that while some have called for radical change, the Committee’s approach was focused on a “realistic and intentional strategy” that will necessitate in some cases incremental changes. But even incremental changes should not be taken for granted. While acknowledging that many previous reports have not led to substantial improvements, the report’s authors convey their conviction that this time will be different. Several of the recommendations have already found support in the White House, with President Joe Biden highlighting in his State of the Union address a plan that includes minimum staffing ratios and enhanced oversight and accountability.
Over the past two years, the long-term care system has faced unprecedented challenges. The resident and caregiver perspectives that were shared with the Committee highlighted the very real, and very human, consequences of decades of neglect. One daughter and caregiver of two parents with dementia who needed nursing home care explained, “The pandemic has lifted the veil on what has been an invisible social ill for decades.” The NASEM report and other efforts to improve LTSS hold the promise of much needed improvements to this long-neglected sector.