Date of Publication: March 7, 2022

The President announced in the State of the Union actions to heighten nursing facility standards, with a focus on Wall Street investment. The White House released a Fact Sheet on February 28, 2022 that details actions to be taken. Through this announcement, the Biden-Harris Administration introduces several reforms targeted for action by the Centers for Medicare & Medicaid Services (CMS) to improve the quality and safety of Medicare- and Medicaid-certified nursing facilities, to protect vulnerable residents and those who care for them, and to address poor performers.

ATI’s Perspective:

In our view, many of the reforms proposed by the administration are based on a sound premise: CMS needs to hold nursing facilities that consistently underperform on quality and patient safety accountable. We also agree that CMS needs to raise the bar on infection control, a step that builds on the hard-fought gains that the industry has achieved in terms of driving down COVID transmission rates, hospitalizations, and deaths.

However, if not implemented carefully, the administration’s workforce-related measures could unfairly punish many high-quality SNF operators that are struggling to maintain adequate staffing levels due a nationwide worker shortage. CMS should consider the impact that the pandemic has had on nursing facilities, especially related to unprecedented staffing challenges, to ensure that nursing facilities are get the appropriate level of support to meet the staffing ratio and turnover targets that will promote high-quality care for residents.  We’re glad to see a focus on supporting the development of the nursing facility workforce, and urge the administration and Congress to take further steps to support the workforce that cares for our most vulnerable citizens.


  • More than 1.4 million people live in over 15,500 Medicare- and Medicaid-certified nursing facilities in the US.
  • The COVID-19 pandemic has had a devastating impact on nursing facilities – more than 200,000 residents and staff in nursing facilities died from COVID-19 since the beginning of the pandemic.
  • The Biden-Harris Administration views nursing facility reforms as key to their commitment to maximizing taxpayer dollars and holding owners and operators accountable.
  • Private equity firms’ investment in healthcare has increased from $5 billion in 2000 to more than $100 billion in 2018, but PE firms still represent a very small proportion of nursing facility owners in the US.

Key Takeaways:

  • Proposed nursing facility reforms focus on:
    • Improving safety and quality of care,
    • Increasing oversight of nursing facilities, and
    • Increasing transparency of the ownership, conditions, and quality of nursing facility care.
  • To implement these reforms, President Biden requests Congress to:
    • Provide almost $500 million to CMS (a nearly 25% increase) for health and safety inspections at nursing facilities
    • Raise the dollar limit on per-instance financial penalties levied on poor-performing nursing facility facilities from $21,000 to $1,000,000
    • Give CMS new authority to require minimum corporate competency to participate in Medicare and Medicaid programs
    • Expand CMS enforcement authority at the nursing facility ownership level
    • Give CMS additional authority to validate data and take enforcement action against facilities that submit incorrect information

Ensure adequate staffing, safe facility conditions, and quality care:

  • CMS will conduct new research to establish a minimum nursing facility staffing requirement and will issue proposed rules within one year. Nursing facilities will be penalized if they fail to meet this standard.
  • To reduce resident room crowding, CMS will explore ways to promote single-occupancy rooms and accelerate phasing out rooms with 3+ residents.
  • CMS intends to strengthen the Skilled Nursing Facility Value-Based Purchasing (VBP) Program and will include metrics related to staffing adequacy, resident experience, and staff retention as part of the VBP program incentive payments.
  • To reinforce safeguards against unnecessary medications and treatments, CMS will launch a new effort to identify problematic diagnoses and refocus efforts to decrease the inappropriate prescriptions and use of antipsychotic medications in nursing facilities.

Enhance nursing facility accountability and oversight:

  • President Biden requests almost $500 million for CMS (a nearly 25% increase) to support health and safety inspections at nursing facilities.
  • CMS will overhaul the Special Focus Facility program to improve care more quickly for residents in the poorest-performing nursing facilities by strengthening performance requirements and moving facilities through the inspection process more quickly. Facilities that fail to improve will face increasingly larger enforcement actions, including termination from participation in Medicare and Medicaid.
  • CMS will take more frequent enforcement actions against poor-performing facilities, using data, predictive analytics, and information processing tools to improve enforcement.
  • CMS requests raising the dollar limit on per-instance financial penalties levied on poor-performing facilities from $21,000 to $1,000,000. CMS will explore making per-day penalties the default penalty for non-compliance (as opposed to a one-time-only fine).
  • CMS requests new authority to incorporate compliance history of owned or operated facilities into new Medicare or Medicaid provider agreements and to expand CMS enforcement authority at the ownership level in order to increase accountability for chain owners of substandard facilities.
  • CMS will continue to help providers make meaningful quality of care improvements through Quality Improvement Organization partnerships.
  • CMS will explore pathways to expand on-demand trainings, information sharing around best-practices, and individualized assistance on issues exacerbated by COVID-19.

Improve the public transparency of nursing facility ownership:

  • CMS will create a new public database of facility owners/operators using information collected through provider enrollment and health and safety inspections to give states a better understanding of prospective owners’/operators’ previous violations.
  • CMS will collect and publicly report more robust corporate ownership and operating data.
  • CMS will implement a range of initiatives to improve the Nursing facility Care Compare website.
  • CMS requests additional authority to validate data and take enforcement action against facilities that submit incorrect information.
  • The Department of Health and Human Services and other agencies will examine the role of private equity, real estate investment trusts, and other investment ownership in the nursing facility sector and inform the public when corporate entities are not serving their residents’ interests.

Increase and retain nurses and healthcare workers:

  • CMS will establish new requirements to increase affordability of nurse aide training.
  • The Administration will support state efforts to improve staffing and workforce sustainability through adequate compensation and a realistic career ladder.
  • CMS will develop a template to assist and encourage States requesting to tie Medicaid payments to clinical staff wages and benefits.
  • CMS and the Department of Labor will launch a robust nationwide Nursing Career Pathways Campaign to recruit, train, retain, and transition workers into healthcare/nursing careers.

Prepare for future pandemics and emergency response:

  • Continued COVID-19 testing, vaccinations, and boosters in long-term care facilities.
  • Strengthen requirements for on-site infection prevention by clarifying and increasing standards for nursing facility staffing needs.
  • Enhance requirements for pandemic and emergency preparedness.
  • Integrate lessons from the pandemic into other nursing facility safety standards and requirements.


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