WASHINGTON – In a move that could signal a broader shift, Oklahoma is rethinking its regulations on how nursing homes spend Medicaid funding. The state currently mandates facilities to dedicate 70% of new Medicaid dollars directly to resident care. However, Senate Bill 1417 proposes more flexibility for providers, potentially reducing the required direct care spending percentage.
This comes as the national long-term care industry grapples with rising costs and staffing shortages. Proponents of the bill argue it would allow facilities to better manage these challenges by providing subsidies for staff training and promotions, while also considering the complexity of resident care needs. A recent report by the Kaiser Family Foundation (https://www.kff.org/) found that Medicaid reimbursement rates haven’t kept pace with rising nursing home operating costs, putting a strain on facilities’ ability to invest in staffing and resident care.
Shifting the Balance
If passed, the bill would take effect in July 2025, allowing facilities with high case-mix – meaning residents require more intensive care – to adjust their direct care spending requirements. This could free up some reimbursement funding for non-staffing expenses, such as specialized equipment or dementia care programs.
The news offers a glimmer of hope for providers nationwide facing similar pressures. According to a survey by the American Health Care Association (https://www.ahcancal.org/Quality/National-Quality-Award-Program/Pages/default.aspx), 83% of nursing homes across the country reported experiencing staffing shortages in 2023. These shortages are particularly acute in rural areas, where Oklahoma falls (https://www.ahcancal.org/News-and-Communications/Fact-Sheets/FactSheets/SNF-Survey-December-2022.pdf).
A National Trend?
Oklahoma isn’t alone in requiring direct care spending quotas. States like New York and Pennsylvania have similar rules. Additionally, the Centers for Medicare & Medicaid Services (CMS) recently issued an 80% direct care spending mandate for home health providers, alongside new nursing home staffing regulations.
This move by CMS, coupled with the inclusion of Medicaid transparency rules, suggests a potential national strategy for nursing home spending. However, some experts worry that increased flexibility for providers could come at the expense of resident care quality, as noted in a recent analysis by the Brookings Institution (https://www.brookingshealth.org/services/long-term-care).
Quality Over Quantity?
Direct care spending rules aim to improve resident care by ensuring facilities invest in staffing. However, provider groups often argue these regulations can hinder care, especially without additional funding and support.
Similar concerns were raised in Pennsylvania, where many providers worry about meeting the 70% mandate, according to Zach Shamberg, head of the Pennsylvania Health Care Association. He emphasizes the need for regulations to recognize the diverse operating costs of facilities and the current economic challenges.
Consumer Concerns
Consumer advocates in Oklahoma oppose the bill, arguing it weakens the link between new funding and increased staffing. They believe a higher direct care spending requirement is essential for quality care. A study published in the Journal of the American Medical Association (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6783337/) found a direct correlation between higher staffing levels and improved patient outcomes in nursing homes.
This highlights a key point of contention: ensuring adequate staffing levels while acknowledging the financial realities faced by nursing homes. With only 6% of Oklahoma facilities currently meeting all CMS staffing requirements, the national worker shortage presents a significant hurdle.
The Road Ahead
Oklahoma’s proposed changes signal a potential shift in the national conversation around long-term care funding. Balancing provider needs with the desire for quality care remains a complex challenge. The outcome of this debate will be closely watched by policymakers and advocates across the country, with potential implications for how nursing homes are funded and staffed nationwide.