September 11, 2020 | Policy Cheat Sheet


By Anne Smithey and Lauren Moran

Nursing facilities (NFs) have been hit particularly hard during the pandemic. Residents of these facilities are often elderly and in poor health, significantly increasing their risk for serious illness, hospitalization, or death due to COVID-19. To date, COVID-19-related deaths in NFs are high, accounting for approximately 28 to 41 percent of all deaths in the U.S. — depending on how data are collected and whether NF staff deaths are factored in.

This high mortality rate has caused concerns among stakeholders, including state and federal agencies, about NF infection prevention and control (IPC) strategies and other COVID-19 practices. As a result, investigations have been launched by the Government Accountability Office, the U.S. House of Representatives, the Office of the Inspector General for Health and Human Services, and multiple state Attorneys General, among others. The Centers for Medicare & Medicaid Services (CMS), a regulator of many of the country’s NFs, is also responding to these events with a number of regulatory changes and other actions.

  • A primer on Medicaid’s role in nursing facilities: Medicaid is the primary payer of NF care, covering 62 percent of residents. As a result, CMS plays an important role in the oversight of most NFs, requiring NFs to meet federal standards around quality of care and patient safety in order to be certified as Medicaid or Medicare providers. CMS partners with State Survey Agencies (SSAs) that operate in each state to conduct routine inspections of NFs to ensure compliance with these standards. Medicaid and Medicare facilities are required to meet the same federal standards and are inspected during one survey — most facilities receive payments from both programs because many residents are covered by Medicare for the first 30 days of their stay, followed by Medicaid if they require long-term care. As part of the federal standards, NFs are required to establish and maintain an IPC program, which includes several important criteria. If the SSA inspection finds that a NF does not meet standards, the facility is issued a deficiency and may face enforcement actions from CMS or the state’s Medicaid agency, including requirements for corrective action or a fine. In severe cases, the state can take temporary control of the NF or close the facility entirely.
  • Is this a new issue? NF safety and infection control concerns are not confined to COVID-19. A recent federal report found that many NFs have widespread and persistent violations of IPC standards. Another analysis found that 40 percent of 5-star nursing homes — the highest quality rating — had been cited for infection control lapses. Recorded deficiencies include failures to wash hands, isolate residents with infectious disease, and use personal protective equipment (PPE) — practices that are crucial to reducing the spread of COVID-19.
    This problem could be compounded by a proposed CMS rule issued in July 2019 that would loosen IPC requirements. The NF industry contends that current regulation is onerous and costly, preferring the greater flexibility offered in the proposed rule. However, some patient advocates say that loosened regulations put residents at risk388,000 of whom already die from infections each year. Given the often-fragile health of NF residents, even before COVID-19, determining which enforcement mechanisms improve IPC is a critical challenge.
  • How are Nursing Facilities Feeling the Strain of COVID-19? NFs are facing an extremely challenging situation. In addition to their vulnerable patient population, NFs have limited resources and expertise needed to manage COVID-19 outbreaks. Many NFs have reported difficulty obtaining sufficient PPE for staff and residents, and NF staff often work in multiple health care settings and have limited sick leave, potentially increasing the risk of spreading COVID-19 from staff to residents. Further, persistent staffing shortages in NFs make it difficult to safely quarantine staff and residents with potential exposure to COVID-19. These considerations add to the complexity of controlling COVID-19 in NFs, and effective policies will likely need to include increased support for NFs and NF staff.
  • What is CMS doing about COVID-related infection control in nursing facilities? CMS has taken a number of actions in response to the emerging data related to COVID-19 infection rates and deaths in NFs. Actions include enhanced enforcement for NFs with longstanding infection control failures, increasing fine amounts, and imposing enforcement activities on NFs with lower-level deficiencies (which do not usually face enforcement action). As of August 4, 2020, CMS has issued more than $15 million in COVID-19-related NF fines. CMS has also linked funding from the CARES Act to IPC actions in NFs and states, including:
    • Supporting NFs to improve IPC by funding staff hiring, IPC training, and increased requirements for testing;
    • Allocating some funding to be paid through performance-based incentives, which reward NFs that keep COVID-19 infections and deaths low among residents when compared to community-based COVID-19 levels;
    • Requiring states to complete IPC inspections of all NFs by the end of July 2020 to receive all their CMS-allocated CARES Act funding (by July 31, 98.5 percent of NF infection control inspections were completed); and
    • Requiring states to use CMS-allocated funding to increase inspection of NFs with current or past COVID-19 cases.

Additional federal actions include requiring NFs to inform residents and families about COVID-19 cases in the facility and reporting COVID-19 cases and deaths directly to the Centers for Disease Control and Prevention. CMS plans to post this data on its Nursing Home Compare webpage.

In two July 2020 press releases, CMS also announced increased assistance to NFs to bolster and maintain appropriate IPC practices. NFs in COVID-19 hotspots can expect support from CMS’ Quality Improvement Organizations and Task Force Strike Teams. These teams are being deployed to NFs experiencing COVID-19 outbreaks to provide on-site assistance and education. CMS also created a toolkit and training program to assist NFs in mitigating COVID-19 cases.

  • What are states doing about COVID-19 infections in nursing facilities? At the state level, SSAs are examining ways to enhance existing oversight, regulatory, and payment approaches to address COVID-19 outbreaks in NFs. In response to significant COVID-19 impacts in NFs, state executive orders have focused on limiting exposure among residents and staff by prohibiting visitors or establishing specific NF visitation guidelines to reduce infection risk. While such policies reduce the risk of contracting COVID-19 among staff and residents, the social isolation and psychological toll on residents is a critical challenge that policymakers are trying to address in parallel with infection control-related directives. States are also taking actions to increase supports for NFs, including providing dedicated support teams, increasing payment for NF staff, and prioritizing testing in NFs.
  • Why does this matter? The pandemic has refocused attention on the role of NF infection control processes and regulations. Many NFs are financially struggling as expenses increase and revenues decline. The CARES Act includes $5 billion of funding for NFs to address COVID-19-related needs, but there are stipulations associated with these additional funds, including increased enforcement action from CMS for IPC deficiencies. With an additional $80 million in CARES Act funding to be dispersed by CMS to increase state surveillance efforts, states have an incentive to follow CMS’ requirements on increasing NF inspections, given the budget shortfalls they are facing. However, many CMS actions were put in place over the past few months and it remains to be seen if these actions are sufficient to improve IPC conditions in NFs, and if any improvements will outlast the pandemic. This dynamic also raises the question of whether CMS’ previously proposed rule to loosen IPC will move forward, particularly in light of increased COVID-19-related oversight and enforcement.
  • What’s the bottom line? NFs have proven to be exceptionally high-risk care settings during the pandemic, and rapidly increasing infection rates in some parts of the country are leading to another wave of illness among NF residents. CMS and state Medicaid agencies play a crucial role in overseeing NF IPC programs, but evidence indicates that many NFs have not historically complied with all federal standards — an issue amplified by the pandemic. In response to the high number of COVID-related deaths in NFs, CMS has increased enforcement, education, and surveillance action through policies and financial levers. However, it is too soon to tell if these directives and related state efforts will have a short- or long-term impact on NF infection control practices. Variations in NF and state ability to ensure an adequate NF workforce and access to PPE will complicate the assessment of these directives.
  • Frequent updates: CMS is frequently updating guidance for NFs as the COVID-19 situation evolves. The CMS Newsroom may provide the most up-to-date information on CMS actions.

What else is worth watching?

  • Regulatory Changes for Medicare. CMS is changing Medicare regulations in response to COVID-19 as much as Medicaid regulations. This issue brief from The Commonwealth Fund tracks and categorizes Medicare regulatory changes in response to COVID-19.
  • Children’s Health Insurance Coverage. Almost half of children in the U.S. are covered by parental employer-sponsored insurance. This Health Affairs blog post highlights vulnerabilities and trends in health coverage for children as parents and guardians lose jobs and employer sponsored insurance due to the pandemic and economic recession.
  • Schools Reopening Across America. State and local governments are faced with difficult decisions about how to operate schools. This tracker shows what decisions states have made about school reopening and links to each state’s official guidance on the subject. The conversation around reopening schools is constantly evolving as scientists gather new evidence on the likelihood of children to become sick from and spread COVID-19.