As the regulatory environment in the seniors housing and skilled nursing sectors becomes increasingly burdensome, leading advocates are pushing back on multiple fronts.
By Jeff Shaw
Seniors housing has always been a hot-button issue and a target for government regulation, given its role in caring for a vulnerable population of seniors with healthcare needs. Even by that standard, though, there are a lot of legislative challenges coming down the pike for owners and operators.
• Sen. Bob Casey (D-Pa.), chair of the U.S. Senate Special Committee on Aging, held a hearing in January in response to a slew of negative news stories around seniors housing. The articles included a variety of topics, including elopements and high cost of care. Subsequent follow-up included investigation letters to large owner-operators.
• Sen. Ed Markey (D-Mass.) proposed a draft bill — the Health Over Wealth Act — in April, which would “require greater transparency in healthcare entity ownership.” Many fear that the act would limit, restrict or even block private equity or REIT investment in seniors housing.
• In June, Markey and Sen. Elizabeth Warren (D-Mass.) proposed the Corporate Crimes Against Health Care Act, which calls for strict civil and criminal penalties for private investment entities when a resident death occurs due to a “triggering event.” According to the American Seniors Housing Association (ASHA), events such as bankruptcy filings, loan defaults or property closures could result in criminal charges.
• In April, the Centers for Medicare & Medicaid Services (CMS) implemented the Minimum Staffing Standards for Long-Term Care (LTC) Facilities and Medicaid Institutional Payment Transparency Reporting final rule. Under the new rules, skilled nursing facilities must meet strict minimums for the number of hours nurses are working on site based on the number of residents.
Even for an industry accustomed to challenges, it is unusual to have so much legislation directed its way at the same time.
Associations seek to overturn new rule
The minimum staffing rule for skilled nursing facilities is already in effect, but various industry associations are already challenging it. The ultimate goal is to have the rule removed or overruled in court.
ASHA and the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) have been the loudest voices against the change.
AHCA/NCAL warns that the rule “could force hundreds, if not thousands, of nursing homes to close,” according to Clif Porter, senior vice president of government relations.
“On the legislative side, we support the passage of bipartisan legislation in Congress that will overturn this impossible mandate, as well as finding alternative, meaningful solutions to improve the workforce crisis,” says Porter.
“In addition, we have filed a lawsuit against CMS and HHS (Department of Health & Human Services), as the agencies have overstepped their authority in issuing these staffing regulations.”
Porter called out two specific pieces of legislation currently poised to block the mandate: The Protecting America’s Seniors’ Access to Care Act (S. 3410/H.R. 7513) and a Congressional Review Act resolution.
“Recently, AHCA/NCAL gathered more than 600 long-term care professionals on Capitol Hill — a testament to the profession’s commitment to finding solutions that will work for seniors and the providers who care for them,” adds Porter.
“ASHA, along with most healthcare-related organizations, believes the minimum staffing rule for skilled nursing facilities is misguided and will have a negative effect on a range of settings, including assisted living,” says David Schless, president and CEO of ASHA.
“The nursing home industry is, not surprisingly, leading the effort to overturn this rule, and the best outcome would be for the courts to ultimately rule against the Biden Administration, though the timing is unclear.”
Both organizations noted that the goal of the new rule — to improve staffing levels — is admirable. But its implementation is not realistic, they say.
“To the extent there is a silver lining to this misguided rule, it again shines the light on an issue that ASHA has been very focused on: the workforce shortage and need to reform our nation’s legal immigration system,” emphasizes Schless.
“We have a crisis that can only be solved by increasing the number of caregivers and other essential workers through immigration reform or other policy changes, such as creating a specific visa category for senior living caregivers,” adds Schless.
An unfunded mandate is an ill-advised way to increase nursing home staffing, says Porter.
“Even if the regulation was well intentioned, the reality is that it will only hurt the people that it purports to protect. We need targeted investments, not blanket mandates, to grow the long-term care workforce.”
Congress targets PE, REITs
Having three separate members of Congress looking to limit private equity and REIT investment in healthcare is a sign that this issue isn’t going away on its own.
“This law will discourage investment from long-time private equity and REIT capital partners, leading to fewer senior developments, community improvements and innovations, as well as decreased consumer choice,” says Deidré Schönfeldt, partner at Hanson Bridgett, a law firm that works in the seniors housing sector.
“Consequently, everyone in the senior care and housing sector will drastically suffer, including our most vulnerable population, who currently have a significant need for seniors care and housing, a need that is expected to grow with the anticipated increase in the aging population over the next decade and beyond,” she says. “There is no research or evidence supporting the claim that private equity and REIT investment in the senior care sector has led to negative outcomes for residents, workers, assisted living services or financial instability of these providers.”
Because private-pay seniors housing generally doesn’t involve financial reimbursement from the government, Schönfeldt encourages assisted living providers to lobby hard to make sure they’re not included in any eventual legislation.
“The best course of action for the senior care industry, including providers, consumers, and state and national trade associations, is to vigorously challenge the applicability of the proposed legislation to the senior care sector,” she says. “This effort should emphasize these distinguishing factors with the goal of excluding assisted living from the definition of healthcare entities in the bill.”
Schless agrees, noting that ASHA is pushing to make sure private-pay senior care is excluded from the bills. He also suggests the bills are unlikely to get passed anyhow.
“This legislation hinders or thwarts investment in assisted living with no basis whatsoever for doing so,” says Schless. “We don’t expect the legislation introduced by the two Massachusetts senators (Markey and Warren) to be enacted in this Congress, given the small margins in Congress and lack of time. But given the potential severe consequences that would dramatically reduce access to assisted living across the country, we must treat this as a real threat to the industry’s ability to meet the demand of the aging population.”
Porter describes the discussions around the REIT and private equity issue as “largely misinformed” and “a distraction from the real challenges facing the majority of the long-term care sector.”
“Neither ownership nor line items on a budget sheet prove whether a long-term care provider is committed to its residents,” says Porter. “Policymakers need to prioritize investing in our nation’s seniors and their caregivers. Together, we should focus on meaningful solutions that will help continue to improve the quality of care in America’s nursing homes.”
Similar to the staffing rule, Porter notes that the stated goals — transparency in financials and reporting — are overall good. However, he says, “we must ensure that adequate reporting does not turn into burdensome paperwork — this will not drive quality care.”
“If we truly want to improve care throughout the healthcare system, we need policymakers to find a proper balance of oversight while still encouraging more investment,” says Porter. “We are advocating that policymakers focus on incentivizing providers and investors to improve on the metrics that drive quality outcomes for their patients and residents.”
Make your voice heard
Between all the industry associations — ASHA, AHCA/NCAL, Argentum and LeadingAge — the seniors housing industry does have a good support system for talking to Congress.
AHCA/NCAL, for example, hosts an annual Congressional Briefing, and also arranges property tours for members of Congress so that they can better understand the industry and “to see firsthand the care our members provide,” says Porter.
“Providers are doing all of this on top of their daily work of delivering high-quality care to our nation’s seniors, and we recognize and commend them for the work they do each and every day.”
Washington, D.C.-based ASHA stays very involved in congressional affairs. “ASHA’s legislative team is on Capitol Hill educating members of Congress about the benefits of seniors housing, the needs of an aging population, advocating for policies that advance our ability to meet these needs and discourage those that cause harm to residents and operators alike,” says Schless.
“Jeanne McGlynn Delgado heads up our legislative efforts, and she and Sheff Richey [director of government affairs] and our outside lobbyists ensure that our industry has a strong voice on matters that impact the industry. We also have our members actively engaged in our advocacy efforts as well both in their communities and here in Washington, D.C.
“This is an ongoing effort and one that ASHA has been engaged in since the early 1990s.”