California Dangles Nursing Home Bonuses That Add Staff

Sacramento, California. California is overhauling nursing home reward systems to force them to improve patient care.

Instead of limiting bonuses to top-performing institutions, next year the state will allocate additional Medicaid payments to nursing homes – even those with low ratings – that hire additional workers, reduce turnover, or improve the quality of care. Objects will be judged on their performance, so objects that do more will get bigger bonuses. And to ensure an acceptable level of service, the state will sanction facilities that fail to meet clinical and quality standards for patients.

The transition is part of a comprehensive effort by Governor Gavin Newsom and state lawmakers to encourage nursing homes to perform better in the wake of the devastating effects of COVID-19. Institutions that improve the working conditions of their staff will also receive higher daily Medicaid payments.

“When you invest in a workforce, you have the right level of care to provide services,” said Lindy Harrington, deputy director of the Department of Health, which administers Medi-Cal, the state’s Medicaid insurance program for people. with low income and disability.

Patient rights advocates and industry officials described the changes as an improvement but expressed skepticism about whether they would work. They said the bonuses were not up to par with what was needed to address chronic staff shortages and the closure of rural facilities.

Last year, lawmakers allocated $280 million to the bonus program, a fraction of the more than $6 billion nursing homes receive annually from Medi-Cal. The Social Security program covers two-thirds of the state’s nursing home residents. Meanwhile, the money that nursing homes could have made by improving the working conditions of their staff is comparable to the temporary funding that institutions received from the state during the pandemic, meaning that overall funding has hardly changed.

“The vast majority of the money goes to institutions, no matter the quality,” said Tony Chicotel, attorney for Nurse Reform Advocates, a California-based nonprofit that represents long-term care residents. “The worst performers will still be paid about the same as the best.”

Newsom and lawmakers passed new pay structures in a state budget bill last year, explicitly calling on regulators to use taxpayer funding to improve the pay and working conditions of employees who feed, bathe, clothe and provide for the well-being of the elderly and elderly. debilitated patients in 1,200 state nursing homes.

But the pandemic has already exposed deep systemic problems in nursing homes. While older people have an increased risk of dying from covid, the coronavirus spreads more easily in institutions, and some studies have shown that nursing homes with fewer staff have significantly higher infection and death rates from covid.

California nursing homes serve 350,000 residents annually, according to an industry spokesperson. Since January 2020, more than 10,000 nursing home residents have died from covid, which today is about a tenth of Californians killed by the virus.

Nationwide, at least 163,538 people have died from covid in U.S. nursing homes as of January 22, according to the latest figures from the Centers for Medicare and Medicaid Services.

In an August memo, CMS Associate Administrator Daniel Tsai urged states to use Medicaid money to improve nursing home training and staffing. The federal agency is also reviewing mandatory staffing.

In California, regulators operate on the belief that more staff and better working conditions will reduce patient injuries and emergency room visits. Therefore, institutions that improve their services in these areas will be eligible for higher Medi-Cal benefits. Guidelines are expected to be developed this year.

Democratic lawmakers, many of whom are linked to workers, have suggested that the administration consider encouraging institutions that organize unions or pay prevailing wages. The inclusion of these incentives in the bill was a victory for unions, as only 20% of nursing home workers in California are unionized.

Industrial officials largely shrugged their shoulders at government incentives. They said their Medi-Cal payments were lower than what they receive from Medicare and private health plans.

“It won’t move the needle as long as the state continues to pull back on nursing home investment so hard,” said Craig Cornette, CEO of the California Association of Healthcare Institutions. “Institutions are desperate for more staff. They want to hire more staff, but their Medi-Cal pays them so little it’s almost impossible.”

Harrington, who implements nursing home rules, called the level of funding “appropriate”.

This is not the only change the government has made to force nursing homes to hire more workers.

Last year, lawmakers rewrote complex Medi-Cal formulas to give nursing homes an incentive to pay workers more. Under this change, businesses can earn up to 5% more labor costs each year through 2026, compared to a 2% increase in administrative and other non-labor costs. This will amount to approximately $473 million for nursing homes in the next fiscal year, according to the Department of Health.

Labor is also pushing for a $25 minimum wage for healthcare workers, including nursing home workers. In 2022, nursing assistants in California earned an average of $20.38 per hour in healthcare, according to the state Department of Employment.

“We really care that the needs of the patient are met,” said Arnulfo De La Cruz, president of the local service workers union in 2015, which represents nursing home workers and home caregivers. “And a big part of that is meeting the needs of workers who deserve decent jobs, good pay, benefits, and of course, shouldn’t be overtaxed and physically stressed out by caring for too many patients. ”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Foundation.