Service Employees International Union Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, June 17 -- Rebecca Wasserman, director of government affairs at the Service Employees International Union, has issued a public comment on the Centers for Medicare and Medicaid Services' proposed rule entitled "Medicare Program: Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Value-Based Purchasing Program for Federal Fiscal Year 2021". The comment was written on June 9, 2020, and posted on June 10, 2020:

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The Service Employees International Union (SEIU) respectfully submits the attached comments on the Centers for Medicare and Medicaid Services' (CMS) FY 2021 proposed rule governing the Prospective Payment System (PPS) for Skilled Nursing Facilities (SNF). SEIU represents more than two million workers advocating to improve their lives and the services they provide. SEIU is the largest healthcare union in the United States with more than one million members in the field, including nurses, doctors, technical and service workers, nursing home workers, and home care workers. Our members work in hospitals, nursing homes, home care, ambulatory care, mental health services, and other healthcare settings. Our members are also consumers of healthcare and public sector workers who help monitor the quality of healthcare providers. Given the multitude of roles our members play in the health system generally, including long-term services and support system, we have a deep interest in this proposed rulemaking for skilled nursing facilities.

SEIU is the largest nursing home union in the United States, representing more than 150,000 nursing home workers who provide the frontline care that is critical to a high-quality healthcare system, particularly during the current global pandemic. Indeed, The COVID-19 pandemic has dramatically altered the landscape of direct care in skilled nursing facilities and the PPS for SNFs should reflect this new reality. Many of the problems that are plaguing nursing homes now existed before the pandemic, but improvements were slow to materialize in the past. Now that nursing home residents and workers are falling ill and dying COVID-19 at alarming rates, we believe that it is worth considering changes we and other advocates have proposed in the past in order to promote the safety and well-being of residents and staff in skilled nursing facilities.

Specifically, we recommend that CMS make significant modifications to the PDPM methodology to address concerns raised by various stakeholders, including representatives of worker organizations, consumer advocates, and providers. In particular, the model should include a more accurate accounting of the current needs of each resident, adequate staffing levels to meet those needs, and should incorporate incentives to improve quality through additional training and adequate wages and benefits for the workforce. Such incentives, if properly designed, should help slow the rapid staff turnover in this industry, which negatively impacts resident quality of life and quality care.

We have divided our comments into the following categories 1) Proposed SNF PPS Rate Setting Methodology and FY 2021 Update and 2) SNF Quality Reporting Program, identified by the relevant section number of the proposed rule. The objective of these comments is to suggest improvements to the Medicare payment methodology for SNFs beyond the proposed 2.3% increase that recognize the interconnectedness of the relationship between staffing standards and quality of care.

Thank you for your consideration of these comments and recommendations. Please do not hesitate to contact Ahimsa Luthuli at [email protected] if you have any questions.

Sincerely,

Rebecca Wasserman

Director of Government Affairs

Service Employees International Union

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III. Proposed SNF PPS Rate Setting Methodology and FY 2021 Update

A. Federal Base Rates

1. Wages paid to staff who provide direct care to residents are inadequate, and have led to staff shortages that impact care. Certified Nursing Assistants (CNAs), who provide the vast majority of direct care to residents earn a median hourly wage of just $13.38 an hour and annual median income of $22,200./1

Some 37% of these workers rely on public assistance to make ends meet./2

The Bureau of Labor Statistics projects that nursing facilities and residential care centers will create an estimated 61,000 new CNA jobs over the 2016 to 2016 time period, and providers will need to continuously fill these positions due to high staff turnover. CMS should use the SNF PPS system to invest in the workforce in order to attract and retain well-trained staff. This can include, but is not limited to, providing financial incentives to encourage higher labor standards.

2. The proposed rule uses per diem federal payment rates based are on FY 1995 costs updated for inflation as required by statute. However, SEIU believes that costs from a more recent base year would strengthen the integrity of the base rates. CMS should work with Congress to enact changes that would allow the federal per diem base rates to be based on the most recently available cost reports; at a minimum, CMS should use the most recent cost reports to establish a new base year for the PDPM program. If rapid payment growth due to changing the base year is a concern, budget growth limits may be used to mitigate that problem.

Using more recent cost reports will more accurately reflect provider spending patterns, which may have changed considerably over the past 25 years. Recent costs reports can help inform CMS policy development. For example, it may be that the cost of labor has increased beyond inflation. Based on up-to-date information, CMS might choose to encourage provider behaviors that will benefit residents, such as improving wages, benefits, and staffing levels for direct care and essential support staff. Doing so would improve both workforce stability and resident care.

3. CMS should also consider adjusting the way the previous RUG-IV nursing home component of the federal base rates has been divided to create the new PDPM payment system. 43% of total nursing costs from the RUG-IV model were allocated to the new non-therapy ancillary component and the remaining 57% were allocated to the new nursing home component. Given that direct care wages are paid through the nursing home component, CMS should consider increasing the percentage of the RUG-IV model measurement that is allocated to the nursing home component beyond 57%. An alternative to assigning a higher percentage to the nursing home component would be to redirect funds from other components to the nursing home component. These proportions were also derived based on cost of living adjustments as applied to 1995 cost reports, which SEIU believes are outdated.

B. Wage Index Adjustment

1. SEIU recommends that CMS use the opportunity afforded by a revision of the SNF payment methodology to finally develop a SNF specific wage index, rather than continuing the current practice of using the hospital wage index to adjust for geographical differences in wages. Base hourly wage information can be collected as part of the Payroll Based Journal staffing data collection process. The annual revision of the SNF Medicare payment methodology presents a great opportunity to gain access to accurate wage data through a verifiable source. Given that most nursing homes use an automated payroll system, it should not be an additional burden to electronically provide this data. Furthermore, hourly wage data could help inform an analysis of staff turnover rates as a measure of quality performance.

C. Non-Case Mix Component

1. CMS should consider conducting an analysis of capital-related expenses and whether some action is necessary to ensure that funding designated for resident care is not used to pay for capital-related expenses. In recent years we have seen some major providers sell their nursing facility operations but retain the nursing facility real estate assets.

Actions of this type signal a prioritization of profit over patient care as they result in less funds being available for spending on patient care. Increased private equity ownership of nursing homes has been linked to a decline in quality of care, in part because expenses that were previously slated for resident care are being used for capital improvements.

Value Based Purchasing

1. The SNF Value Based Purchasing Program rewards nursing homes with incentive payments based on the quality of care they provide to Medicare beneficiaries, and the incentive payments are currently based solely on hospital readmission rates. This proposed rule does not propose any substantive changes to the program. SEIU recommends that CMS create a broader value-based purchasing program that includes a greater number of quality metrics, instead of using only hospital readmissions. For instance, the value-based purchasing program should include staffing metrics, such as CNA hours per resident day, staff turnover rates, and total licensed nursing hours per resident day.

Integrating CNA hours per resident day, staff turnover rates, and total licensed nursing hours per patient day into the SNF Value Based Purchasing program can be easily done by using information contained in the payroll-based journaling system, which has been operational since July 2016. Several academic studies have positively correlated a higher staffing level with higher quality of care outcomes, providing an evidence base which offers a rationale for the inclusion of staffing level quality metrics in the SNF Value Based Purchasing Program.

Additionally, including such staffing-related metrics in the SNF Value Based Purchasing Program would provide an incentive and encourage facilities to invest more in hiring staff and retaining current staff. It is also in the public interest to include additional quality measures that reflect workforce adequacy, since the ability of a SNF to provide consistent, high-quality care largely depends on the staff who deliver the care. We are interested in working with CMS to further develop appropriate workforce-related measures.

2. Given that social determinants of health impact hospital readmission rates, SEIU recommends that CMS applies a risk adjustment measure for socioeconomic status to the hospital readmission measure for the SNF Value Based Purchasing program. Adding a risk-adjustment measure for socioeconomic status would guard against unduly penalizing facilities that predominantly serve low income residents. Dual Eligibility status from the Research Identifiable Files can be used as a proxy for socioeconomic status until better data is available. Providers do not have control over social determinants of health and thus it is important that these factors are considered when evaluating hospital readmissions data for incentive payments from the SNF Value Based Purchasing Program.

We would also like to note the following issues that are directly and indirectly related to the SNF Quality programs:

Workforce and Quality

SEIU continues to advocate for measures and payment incentives that capture the value and importance of a well-trained and adequate workforce, an area that is sometimes overlooked in current quality debates.

* As noted above, we believe CMS must work to include payment incentives that encourage the development of the healthcare workforce, as these individuals are on the front line of providing care and can be empowered by their respective institutions to improve the quality of care delivered to nursing facility residents. Where further research is necessary and measures do not exist, CMS should work with partners and invest resources to build the evidence base necessary to develop measures that encourage the growth of a well-equipped workforce.

* The full and active participation of all members of the healthcare team in their own education, training, and career advancement is essential to improving care delivery. For this reason, healthcare jobs should be designed with career growth in mind and must provide workers with adequate wages and essential benefits, including health insurance and paid time off, the ability to have a secure retirement, and access to training and continuing education. Joining a union is one of the best ways to ensure that workers get these basic benefits and thus it is imperative that nursing home workers do not face barriers that prevent them joining together in a union.

* Innovation and expansion of traditional roles and responsibilities of healthcare workers will help in delivering cost-savings and patient-centered care. We hope that CMS will invest in further demonstrations and research related to the interaction of workforce satisfaction and training and health care quality and investigate how to incorporate findings into pay-for-performance programs such as SNF VBP, and we are eager to work with CMS to address these priorities.

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Footnotes:

1/ Paraprofessional Healthcare Institute (PHI) 2019. U.S. Nursing Assistants Employed in Nursing Homes: Key Facts.

2/ https://www.bls.gov/emp/tables/industry-occupation-matrix-occupation.htm.

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0036-0002

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