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Florida's Efforts to Improve Qualityof Nursing Home Care Through NurseStaffing Standards, Regulation, andMedicaid ReimbursementKathryn Hyer PhDMPP a , April Temple PhDNHA b & Christopher E.Johnson PhD ca Associate Professor, School of Aging Studies, University of SouthFlorida, Tampa, Florida, USAb Assistant Professor, Department of Health Sciences, James MadisonUniversity, Harrisonburg, Virginia, USAc Associate Professor and Director MHA Program, Department ofHealth Policy and Management, School of Rural Public Health, TexasA&M University System Health Sciences Center, College Station,Texas, USA

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To cite this article: Kathryn Hyer PhDMPP, April Temple PhDNHA & Christopher E. Johnson PhD(2009): Florida's Efforts to Improve Quality of Nursing Home Care Through Nurse Staffing Standards,Regulation, and Medicaid Reimbursement, Journal of Aging & Social Policy, 21:4, 318-337

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Journal of Aging & Social Policy, 21:318–337, 2009 Copyright © Taylor & Francis Group, LLC ISSN: 0895-9420 print/1545-0821 onlineDOI: 10.1080/08959420903166910

WASP0895-94201545-0821Journal of Aging & Social Policy, Vol. 21, No. 4, August 2009: pp. 0–0Journal of Aging & Social Policy

Florida’s Efforts to Improve Quality of Nursing Home Care Through Nurse Staffing Standards,

Regulation, and Medicaid Reimbursement

Improving Quality of Nursing Home CareK. Hyer et al.

KATHRYN HYER, PhD, MPPAssociate Professor, School of Aging Studies, University of South Florida,

Tampa, Florida, USA

APRIL TEMPLE, PhD, NHAAssistant Professor, Department of Health Sciences, James Madison University,

Harrisonburg, Virginia, USA

CHRISTOPHER E. JOHNSON, PhDAssociate Professor and Director MHA Program, Department of Health Policy

and Management, School of Rural Public Health, Texas A&M University System Health Sciences Center, College Station, Texas, USA

Between 1999 and 2007, Florida implemented two initiativescombining legislative, regulatory, and reimbursement strategies toincrease nurse staffing levels in nursing homes to improve qualityof care. Despite a $40 million incentive package allocated fordirect-care staffing, per-resident-day staffing increased only afterlegislative requirements mandated minimum nursing hours perresident day. Total Medicaid expenditures grew by $1.1 billionover the 8 years; per diem rates increased 65% to reimburse pro-viders’ costs. Registered nurses’ hours decreased, while licensednurses’ and paraprofessionals’ hours increased. This articledescribes the impact of staffing policy changes, includes stakehold-ers’ views about approaches to achieve quality outcomes, anddocuments state policy implementation efforts. Seven lessons fromthe implementation of state nurse staffing standards to improvequality of care outcomes are also presented.

Received February 21, 2008; revised March 1, 2009; accepted April 15, 2009.This research was partially funded by a grant from the Commonwealth Fund to the

University of South Florida, #20050582.Address correspondence to Kathryn Hyer, PhD, 4202 East Fowler Avenue, MHC 1715,

Tampa, FL 33620, USA. E-mail: khyer@bcs.usf.edu

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Improving Quality of Nursing Home Care 319

KEYWORDS direct-care workers, policy reform, nurse staffing,nursing homes, policy implementation

INTRODUCTION

Improving the quality of care provided in the nation’s nursing homes hasbeen a major long-term care policy issue since the 1970s. Although short ofuniform findings, Institute of Medicine studies (Institute of Medicine Staff andNational Research Council Staff, 1986; Institute of Medicine, Wunderlich, &Kohler, 2001), Centers for Medicare & Medicaid Services (CMS) reports(2001a, 2001b), and a growing body of research has linked poor quality ofcare to inadequate direct-care staffing (Kotnetzka, Stearns, & Park, 2008;Weech-Maldonado, Meret-Hanke, Neff, & Mor, 2004; Zhang & Grabowski,2004; Castle, 2008). While neither Congress nor the Executive Branch hassupported national minimum staffing standards for nursing homes, concernabout the need for nursing home staffing minimums encouraged 33 states,between 1999 and 2007, to adopt minimum staffing standards with theexpress intent to improve quality of care (Harrington, 2004a, 2004b, 2008).One of those states, Florida, established the highest nurse staffing standardsin the country.

This article specifically focuses on the implementation and policylessons learned from Florida’s efforts to improve nursing home qualitythrough increased nurse staffing between 1999 and 2007. Florida’s legisla-ture initially provided nursing homes $40 million in incentive payments toincrease staffing resources before crafting a comprehensive nursing homereform bill (Senate Bill [SB] 1202, 2001) that required minimum staffing stan-dards, tort reform, increased regulatory oversight, augmented Medicaidreimbursement, and a moratorium on new nursing home beds (Polivka,Salmon, Hyer, Johnson, & Hedgecock, 2003). Medicaid expenditures fornursing home care increased $1.1 billion over these 8 years (Florida CostReimbursement, 2008). Per diem reimbursement grew 66% ($102.38 in 1999to $170.18 in 2007). We cannot attribute all Medicaid nursing home expen-ditures to these quality initiatives because Medicaid’s reimbursement formulaincludes operating and property adjustments (non–patient care) components.However, Florida’s willingness to fund direct patient care staffing increasesis reflected in the increased reimbursement and signifies the state’s commit-ment to improving quality.

To help inform policy makers in other states who seek to improve thequality of their own long-term-care systems, the authors interviewed stake-holders about the importance of various approaches to achieving qualityoutcomes and reviewed initial state agency reports on policy implementationefforts aimed at comprehensive reform to improve nursing home quality

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of care. An overview of Florida’s initiatives is first presented to establish thebackground to this study.

FLORIDA’S INITIATIVES: AN OVERVIEW

In 1999, Florida ranked fifth worst in the nation in percentage of facilitiesreceiving citations for inadequate staff, with 12.4% receiving citations, com-pared to only a 5.7% average for all U.S. facilities (Harrington, Carrillo, &Mercado-Scott, 2005). Legislative hearings suggested that the state’s nursinghomes faced serious quality issues and needed to increase direct-care stafffrom its minimum of 1.7 hours per resident day (HPRD) (Florida PolicyExchange Center on Aging, 2001).

Table 1 provides a timeline of the Florida legislative initiatives toincrease nursing home nursing staff over a 9-year period. The first initiativewas House Bill (HB) 1971 (HR 1971, 1999), which created Medicaid finan-cial incentives for nursing homes to hire additional certified nurse assistants(CNAs) and licensed practical nurses (LPNs) and/or to increase the wages orbenefits of direct-care staffs through direct care staffing adjustment (DCSA).

TABLE 1 Timeline of Florida Legislative Action to Increase Nurse Staffing in Nursing Homes,1999–2006

Year Legislative actionCNA hours

per resident dayLPN/RN hours

per resident day

1998 No legislative action 1.7 0.61999 Appropriate Medicaid direct patient care

incentives (HB 1971)1.7 0.6

2000 Reimburse Medicaid direct patient care incentives effective April 2000

1.7 0.6

2001 Mandate new staffing standards over 36 months (SB 1202)

1.7 0.6

2002 Increase CNA and LPN/RN staffing standards effective January 2002

2.3 1.0

2003 Increase CNA staffing standards to 2.6 hours effective January 2003

Delayed implementation of 2.9 CNA hours to July 2004

2.6 1.0

2004 Delayed implementation of 2.9 CNA hours to July 2005

2.6 1.0

2005 Delayed implementation of 2.9 CNA hours to July 2006

2.6 1.0

2006 Amended legislation to weekly average of 2.9 CNA hours and daily minimum of 2.7 CNA hours effective January 2007

2.7 daily2.9 weekly

1.0

Source: Data taken from House Bill (HB) 1971, Florida Statute §400.0225 (1999); Senate Bill (SB) 1202,Florida Statute §400.141 (2001).Note. CNA = certified nursing assistant; LPN = licensed practical nurse; RN = registered nurse.

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Improving Quality of Nursing Home Care 321

The baseline period of the DCSA was January through June 1999, and thefollow-up period was May through October 2000. Providers agreeing toincrease the absolute amount of total direct-care spending between thoseperiods received an add-on to the Medicaid per diem rate. Approximately$40 million was appropriated: $7.9 million for April 1 to June 30, 2000 and$31.7 million (annualized cost) for July 1, 2000, to June 30, 2001.

Initial drafts of the DCSA legislation mandated that Medicaid incentivemoney be allocated only to facilities staffing at the lowest levels, but providersadvocated that a portion of the Medicaid money should also reward providersstaffing at “higher” levels. Thus, the final incentive rules allowed both aminimum add-on of 50 cents per Medicaid day for all Medicaid providers, atan annual cost of nearly $8 million (25% of the appropriation), and a distri-bution of the remaining $23.7 million in incentive funds (75% of the total) toproviders with the lowest staffing. In 2000, the average daily Florida Medicaidreimbursement was $111.25 per day; the $1.96 average incentive add-onwas a 1.8% average increase in daily Medicaid payment rate.

As incentive payments were being implemented, the legislature createda task force on affordability and availability of long-term care. The debateover the quality of care in nursing homes included concerns about increasedlawsuits against nursing homes and declining availability of nursing homeliability insurance. As Polivka et al. (2003) explained, the compromise legis-lation, SB 1202 (2001), established minimum nurse staffing ratios, increasednursing home regulation, and included tort reforms with stricter standardsfor filing lawsuits and reduced add-on attorneys’ fees. The legislation stipulateda one-time increase of 0.4 in hours for licensed staff to 1.0 HPRD, a tieredincrease in CNA hours (to 2.3 HPRD in 2002, 2.6 HPRD in 2003, and 2.9HPRD in 2007), and required minimum staffing ratios of 1 CNA per 20 resi-dents and 1 licensed nurse, LPN, or registered nurse (RN) per 40 residents(see Table 1).

Florida’s willingness to increase nursing home reimbursement to payfor the required staffing was a critical component of the legislative compro-mise. Florida’s Medicaid reimbursement is a cost-based prospective system.Before the legislative change, Medicaid providers were reimbursed basedon cost categories (patient care, operating, and property), which are subjectto rate ceilings. Table 2 details the technical legislative and rule modifica-tions to Medicaid reimbursement that were necessary to allow nursinghome providers to receive rate increases to cover the costs of new staff.Florida divided its patient care costs into direct and indirect patient carecosts and rebased direct patient care costs, thus enabling providers to avoida ceiling on reimbursement. Next, Florida created a “gross-ups” mechanismto reimburse nursing homes based on the projected additional staffingneeded to bring each facility from its 2001 cost-reported staffing levels tothe required new minimum staffing standards. Average Medicaid reimburse-ment jumped $12.75 per day (10.7%) from January 2001 to January 2002 to a

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rate of $131.77 per Medicaid day. By paying homes based on projectedstaffing costs, facilities received immediate increases in Medicaid rates ratherthan having to wait for reimbursement based on actual costs of hiring newstaff (generally a lag of 6 to 12 months after the nursing home pays actualcosts). Finally, recognizing that providers needed time to hire and train staff,Florida invented the “ramp-ups” mechanism. Providers received 50% oftheir new per diem rate beginning in November 2001 and 75% of their newreimbursement rate in December 2001. The same ramp-up and gross-upreimbursement methodology was used to reimburse providers for the para-professional staffing increases in 2003 and 2007.

METHOD

To identify processes integral to nurse staffing implementation, policyimpacts, and the linkages between the two, a qualitative approach consisting ofstructured telephone interviews with key stakeholders guided the study. Weidentified four stakeholder groups: elected and state regulatory officials;

TABLE 2 Technical Changes to Florida Medicaid Reimbursement During Implementationof Mandated Staffing Ratios

Date Change

July 2001 Medicaid formula changed to allow direct care costs to increaseNovember 2001 Facilities receive “ramp-up” of 50% of estimated January 2002

reimbursement rate costs to pay for hiring and training costs for required increase to 2.3 CNA HPRD and 1.0 LPN/RN HPRD

December 2001 Facilities receive “ramp-up” of 75% of estimated January 2002 reimbursement rate costs to pay for hiring and training costs for required increase to 2.3 CNA HPRD and 1.0 LPN/RN HPRD

January 2002 “Gross-up” to minimum of 2.3 CNA HPRD and 1.0 LPN/RN HPRDNovember 2002 Facilities receive “ramp-up” of 50% of estimated January 2002

reimbursement rate costs to pay for hiring and training costs for required increase to 2.6 CNA HPRD

December 2002 Facilities receive “ramp-up” of 75% of estimated January 2002 reimbursement rate costs to pay for hiring and training costs for required increase to 2.6 CNA HPRD

January 2003 “Gross-up” to minimum of 2.6 CNA HPRDNovember 2006 Facilities receive “ramp-up” of 50% of estimated January 2007

reimbursement rate costs to pay for hiring and training costs for required increase to average 2.9 CNA HPRD over 1 week

December 2006 Facilities receive “ramp-up” of 75% of estimated January 2007 reimbursement rate costs to pay for hiring and training costs for required increase to average 2.9 CNA HPRD over 1 week

January 2007 “Gross-up” to average 2.9 CNA HPRD over 1 week

Source: Analysis by authors.Note. Projected staffing reimbursement continued until a facility submitted a cost report, at whichtime actual costs were used to set Medicaid reimbursement. HPRD = hours per resident day;CNA = certified nursing assistant; LPN = licensed practical nurse; RN = registered nurse.

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Improving Quality of Nursing Home Care 323

nursing home providers and lobbyists for the industry; consumer advocates;and nursing home direct-care employees. We used purposeful samplingwithin the four stakeholder groups and identified key informants for eachgroup directly involved in or influenced by the staffing initiatives in order togain an in-depth understanding of the goals of the nurse staffing policies, tofind examples of and insights into the changes that occurred during imple-mentation, and to be aware of how those changes were perceived byrespective stakeholders (Patton, 2002).

Stakeholders received letters introducing the study, including sampleinterview questions and asking them either to provide informed consent ordecline participation. Those who did not respond to the mailing were con-tacted one additional time to request participation.

Seventeen telephone interviews (41% response rate) were completedwith state legislative and regulatory officials (n = 3), nursing home providersor representatives of the industry (n = 6), consumer advocates (n = 5), andparaprofessional direct-care nursing staff (n = 3). The three elected officialswho spearheaded the legislation refused to participate in taped interviews.State officials were also difficult to recruit, which is likely because the studytook place during the spring legislative session. Each paraprofessional was aCNA with a minimum of 20 years of experience working in Florida nursinghomes.

Interviews were structured using broad, open-ended questions to facil-itate discussions of stakeholders’ perceptions of the following: (1) the state’sinterest in and expected outcomes due to increased staffing; (2) the identifi-cation of groups that supported or opposed staffing initiatives and why; (3)the importance of technical changes to Medicaid reimbursement; (4) theimplementation issues for nursing home operations and costs; and (5) theperceived outcomes of policy change on residents and their family members,direct-care workers, and nursing home care. Example interview questionsincluded “How were the per diem rates in the state Medicaid formulachanged to allow providers to receive increased Medicaid reimbursement?”;“What factors affected the implementation of the nurse staffing ratios?”; and“What outcomes have been achieved as a result of the increased nurse staff-ing levels?” The audiotaped telephone interviews were scheduled at theconvenience of the participants and took approximately 30 to 45 minutes tocomplete. Interviews were transcribed and subsequently sent to participantsto confirm accuracy.

Quotes and comments were attributed to one of the four stakeholdergroups, not to identifiable individuals. Data from interview responses anddocument review were analyzed to describe Florida’s experience and topresent lessons to be learned from the implementation of state nurse staff-ing standards. The study procedures were approved by the institutionalreview board at the University of South Florida, and all participants providedconsent.

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Additional information for this study was gathered from Florida statelaw, legislative and administrative reports, testimony before committees,and yearly state budgets. Publicly available data from CMS Online SurveyCertification and Reporting (OSCAR) (Harrington et al., 2005; Harrington,Carrillo, & Blank, 2008) supplemented state reports.

The interviews and reports form a summative evaluation of Florida’sefforts to identify interventions and present program elements that contribute toeffective policy implementation for future policy makers considering initia-tives to increase nurse staffing and improve the quality of nursing homecare (Patton, 2002).

RESULTS

Staffing Incentives

Of Florida’s 648 Medicaid-certified nursing home providers, 600 (93%) electedto participate in the incentive payment plan that began in April 2000. Sincethe incentive payment plan was a Medicaid add-on that reimbursed direct-care staffing costs only for Medicaid patients, those facilities with lowMedicaid occupancy had the least incentive to participate because theywould have received the lowest per diem incentive payments. For example,a facility with 40% Medicaid occupancy would have had only 40% of newstaffing costs reimbursed from Medicaid, leaving the facility to cover theremaining 60% of staffing costs from Medicare and private pay.

On average, each participating facility receiving incentive moneyreported that between January and June 1999 and May and November 2000,absolute numbers of staff increased by 2.5 CNAs, 2.4 LPNs, and 0.3 RNs, andtotal direct-care staffing hours for CNAs, LPNs, and RNs increased in abso-lute hours, primarily through increased CNA hours (Agency for Health CareAdministration, 2001). The legislative report noted both increases in theamount of CNA time spent on direct patient care and a decrease in patientcare provided by RNs (Agency for Health Care Administration, 2001). Statereports indicate total nursing home days grew by 645,471 days betweenJanuary 1999 and July 2000 (Florida Cost Reimbursement, 2008). Consistentwith the state report, Harrington et al. (2005) found that the Florida licensednursing hours decreased from 1.7 to 1.5 HPRD, while nursing assistantHPRD remained constant at 2.1.

To verify spending increases during the incentive payment program,the Florida Agency for Health Care Administration created a new cost reportto track the staffing changes between each nursing home’s baseline (January 1to June 30, 1999) and follow-up period (May 1 to October 31, 2000). Foreach period, participating nursing homes had to provide detailed data ondirect-care staffing hours, wages, and benefits by nursing level; number ofnew hires; agency personnel costs; and resident days of care. This tracking

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Improving Quality of Nursing Home Care 325

of incentive dollar expenditures enabled regulators to amend the stateMedicaid plan and cost-reporting system to create direct patient care (work-ing with residents) and indirect patient care (training, vacation, or sick)categories. Beginning in 2002, cost reports required details on direct-carestaff hours, wages, and benefits by nursing levels; all of these categorieswere initially tested during the incentive payment program.

However, despite incentive payments, legislator advocates remainedconcerned about quality of care, and interviewees’ comments echoed adiverse yet uniform awareness of the problems posed by understaffing innursing facilities and the need for higher staffing requirements. Many advo-cates quoted such family complaints as “This facility doesn’t have enoughstaff” and “Call lights went unanswered for a long time.” One advocate, aftervisiting a nursing home late one night and seeing one aide being solelyresponsible for 42 residents, concluded that “No one can do this [CNA job].”CNAs themselves reported an “overwhelming workload,” leading them tohaving to tell residents “I will do that later.” One CNA indicated her frustra-tion because “I knew I did not have the time to do things [for residents].” Anombudsman confirmed that a facility being “short-staffed” was “the mostfrequent complaint received statewide” (Office of the State Long-Term CareOmbudsman, 2001, p. 7), and testimony at legislative hearings in 2001 sug-gested that the state’s nursing homes faced serious quality issues thatrequired increases in direct-care staff (Florida Policy Exchange Center onAging, 2001).

An advocate who had fought for higher nurse staffing requirementsexpounded on how advocates had been “beating on the door for years, butin 2001, it was the same time the nursing homes wanted freedom fromlitigation.” An industry representative noted the existence of a “continuouscycle in which lawsuits led to difficulty getting insurance, litigationoccur[red] because facilities were not providing good quality of care, andquality suffered because the state was not paying enough.” A facility admin-istrator added:

The political motive for increased staffing with new funding includeddeflecting accusations that legislators were sacrificing resident welfareby enacting modest tort reform. However, there was also the sincererecognition that good care was not possible without adequate resources.

Staffing Mandates

Only after the higher minimum staffing standards were established andMedicaid increased per diem reimbursement (see Table 2) did staffing HPRDincrease. As Figure 1 indicates, during the Medicaid incentive fund, actualstaffing did not increase when adjusted as HPRD. In 2003, Florida raisedCNA staffing hours to 2.6 HPRD, with licensed staff remaining at 1.0 hour.

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326 K. Hyer et al.

In 2004, the Florida average total staffing HPRD was 4.3, significantly higherthan the national average of 3.7 (Harrington et al., 2008) (Table 3). In 2007,when Florida fully implemented the staffing standards to 3.9 HPRD, thestate had the highest total staffing standards in the country (Harrington,2008).

Regulators recognized that it was “critical for [the] state to pay from dayone.” A provider lobbyist noted that the legislator sponsoring the bill“wanted to be sure that money was spent on care and nothing else; that’swhy the increase went to the direct-care component (within Medicaid reim-bursement formula).” Providers noted the “dramatic increase in costs associ-ated with new staffing,” and one volunteered:

FIGURE 1 Total nursing hours per resident day in U.S. and florida facilities, 1999–2007.

Source: Data for figure taken from table 31, Harrington et al., 2005; Harrington et al., 2008.Note: Total nursing hours per resident day (HPRD) includes registered nurses, licensed practical nurses,and certified nursing assistants.

3

3.5

4

4.5

5

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

To

tal N

urs

ing

HP

RD

Florida

U.S.

TABLE 3 Average Hours of Nurse Staffing per Resident Dayin U.S. and Florida Facilities, 1999–2007

Year

Florida United States

RN LPN CNA Total RN LPN CNA Total

1999 0.8 0.9 2.1 3.8 0.8 0.7 2.1 3.62000 0.8 0.9 2.1 3.8 0.7 0.7 2.1 3.52001 0.7 0.8 2.1 3.6 0.7 0.7 2.2 3.62002 0.6 0.9 2.5 4.0 0.7 0.7 2.2 3.62003 0.6 0.9 2.7 4.2 0.6 0.7 2.3 3.62004 0.6 0.9 2.7 4.2 0.6 0.7 2.3 3.62005 0.6 1.0 2.8 4.4 0.6 0.7 2.3 3.62006 0.6 1.0 2.8 4.4 0.6 0.8 2.3 3.72007 0.6 1.0 3.0 4.6 0.6 0.8 2.3 3.7

Source: Data for table taken from table 31, Harrington et al., 2005;Harrington et al., 2008.Note. Rounding error present in combined staff figures. RN = regis-tered nurse; LPN = licensed practical nurse; CNA = certified nursingassistant.

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Improving Quality of Nursing Home Care 327

Even [for providers] with a few months ability to absorb the cash flow, itwould have been difficult to comply with staffing levels if money hadn’tcome immediately. Some [providers] did not have the cash flow. . . .Some might have teetered and not been able to continue; certainlymany would have had a major issue complying with staffing rule.

In addition to maintaining the Medicaid incentive funding, Florida createda mechanism to reimburse nursing homes, called gross-ups, based on theadditional staffing reimbursement needed to bring each facility from its 2001cost-reported staffing level to the required new minimum staffing standards.As one Medicaid official stated:

We looked at [facility] historic reimbursement levels based on the sup-plemental information [nursing homes] provided: what were averagehours per day, average rate per hour, benefits, etc. If the facility wasalready at 2.0 and was trying to get to 2.3, we would gross-up the coststo 2.3 using historical information based on average costs per patientper day. This new Medicaid amount was paid starting January 1, 2002.We continued this formula until [we received] a cost report documentingactual costs.

Implementation Issues and Concerns

Even with new average Medicaid daily rates increasing by 10.7%, providerscomplained that initial staffing reimbursement did not immediately compen-sate all incurred costs. A gap was identified between the projected costsimmediately reimbursed and the actual costs because (1) demand for newdirect-care workers increased wages for both direct-care and non–direct-careworkers and (2) actual average staffing hours exceeded the required mini-mum projected levels. Increased demand for CNAs spurred an approximateincrease of $1.00 an hour in average CNA wages and placed wage pressureon non-nursing staff. As one not-for-profit provider noted:

Indirectly, the mandates resulted in higher demand for workers andresulted in an increase in average pay scale. That is good for the field.Wal-Mart and [The] Home Depot were competing with us for staff. . . .Pay scale and benefits increased and the job became more attractive toworkers; it’s very positive.

A second difference between projected costs and actual costs involvedmanaging staffing minimums. Initial Medicaid rates reimbursed nursinghomes for direct-care staffing precisely at the minimum staffing levels. How-ever, because of harsh regulatory sanctions if homes fell below minimumstandards, facilities staffed, on average, above the minimum. As one stateofficial noted, “There is absolutely no way a nursing home can staff every

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day [precisely] to the exact minimum, yet during the initial implementationthat [was all] Medicaid was willing to pay.”

As noted earlier, additional reporting and auditing requirements accom-panied implementation of the mandated staffing levels. Nursing homeswere required to report actual hours worked and more detailed costs ofdirect-care staff, and these data became part of the formal Medicaid costreport. To ensure report accuracy, the Medicaid cost report review unitconducted desk audits of all staffing data that had been reported during thebase period that had been used to calculate gross-ups. In addition, a completeaudit of all facilities was conducted immediately after the staffing mandatehad been implemented.

Minimum nurse staffing levels continue to be closely monitored throughmultiple state mechanisms and sanctions for noncompliance. Semiannually,facilities must submit quarterly reports of staff hours per day and staff turn-over for CNAs, licensed nurses, the director of nursing, and the facilityadministrator. In addition to review of staffing payroll records during the2-week period immediately prior to a nursing home’s annual survey, Floridainspectors also examine nursing payroll records filed for an additional2-week period (180 days prior to the survey). Rigorous enforcement ofmandated staffing ratios reflects the zero-tolerance position inherent in theregulations (SB 1202, 2001). For example, a nursing home must stop newadmissions during the second of two 24-hour periods if it fails to meetminimum staffing levels. The ban on new admissions continues for 6consecutive days until minimum staffing levels have been met. Failure toinstitute an admissions moratorium results in a civil penalty, ranging from$1,000 to $5,000 per offense.

After the legislation, nursing homes’ human resources personnel werechallenged to interview, hire, and train significant numbers of new staff. Inaddition to filling normal vacancies, the Florida Health Care Association(FHCA), a provider association, estimated that approximately 700 licensednurses (i.e., RNs, LPNs/licensed vocational nurses) and 3,500 CNAs had tobe hired within 7 months to meet the January 2002 requirements (Marshall,2001). Another 3,500 CNAs were needed to meet CNA staffing levels of 2.6HPRD required 1 year later (January 2003). Florida’s Department of Health,which monitors CNA training programs, had great difficulty meeting theincreased demand for testing and certifying new CNAs. Many nursinghomes and the trade associations created in-house certification programsrather than wait to hire graduates from the few state-approved 160-hourtraining and certification programs. The FHCA encouraged its members toadopt its CNA preparatory course, allowing in-house RN staff to providefacility-based 80-hour CNA instruction; this was about half the traininghours required by other programs. Employees could also “challenge thetest,” that is, take the Department of Health’s written and clinical competencyexam to become certified based on experience. Yet, as one not-for-profit

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provider who had developed a 160-hour course complained, “Lots of pro-viders and training programs encouraged workers to challenge the test. Youmay have put in a bunch of folks that may not have had [the] experientialand attitudinal background you would have wanted.”

Finding new staff was not as difficult as providers had feared. One pro-vider reported that the CNA jobs had attracted housekeeping, activities, anddietary staff who were already employees of the nursing home: “We alwaysoffered opportunity for more money to other staff. They are already work-ing, and we know they have passed background screening.” As a CNAinterviewee stated, “It wasn’t hard in my place [finding new CNAs]. . . .[Management] offered staff from housekeeping and dietary [the CNA jobs].”Another CNA noted:

Our building tried to promote people even though they weren’t used toworking on the floor. Two came from dietary and one from thekitchen—they had to downsize in the kitchen—so you actually helpedsave a worker’s job. Salaries are close, but the salary did increase whenyou went to CNA level.

An advocate noted that despite industry concerns about finding staff,“There were adequate numbers of CNAs. [Providers] did not have troublerecruiting, and when they were adequately staffed and not overworked, thestaff was content to stay.”

As Table 1 indicates, the Florida legislature delayed implementing thefinal increase of 2.9 CNA HPRD, set for 2004, until January 2007 because ofthe cost. In a subtle change of language, the 2007 staffing mandate nowrequires an average of 2.9 CNA hours per resident per week and a dailyminimum of 2.75 CNA HPRD, a more flexible and less costly standard thana minimum level.

Reported Outcomes

As part of the nursing home reform, the Florida legislature requires anannual report on implementation of these initiatives and any improvementin nursing home quality of care. The report includes an analysis of nursinghome deficiency citations, adverse incidents, and notices of intent to litigate:all components of the original legislative compromise to improve nursinghome quality. A new measure of quality—prevalence of adverse incidents—decreased by approximately 31.8%, from 3,505 in 2001 to 2,389 in 2005, andnotices of intent to litigate were halved after the passage of comprehensivenursing home reform in 2004 (Agency for Health Care Administration,2005), suggesting that tort reform was reducing lawsuits. The number ofnursing homes receiving citations of insufficient staffing also decreased sig-nificantly, from 12.4% in 1999 to 4.9% in 2004 (Harrington et al., 2005, 2008).

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Nursing home inspectors rate violations of standards on the scope andseverity of the deficiency. If a violation results in “actual harm to a resident”(i.e., development of a pressure sore on a resident results in the citation“failure to treat or prevent a pressure sore”), facilities have to pay higher finesand can be subject to more frequent inspections. Florida facilities’ citations foractual harm decreased by 71% from 1999 to 2007 (Harrington et al., 2005,2008) (Figure 2). In 2001, prior to the staffing mandates, Florida’s percentageof facilities with harm deficiencies (21.1%) was similar to the national average;however, by 2007, only 8.2% of Florida facilities were cited at this level, while17.6% of U.S. facilities had harm violations. National citations for harm were53% higher than in Florida facilities (Harrington et al., 2008). During thisperiod there were also no changes in inspection standards or procedures, andquality changes were found in all regions. There is no reason to suspect thatthe reported changes represent an artifact of the survey process rather than asubstantial change in quality observed during routine inspections.

The Florida decrease began during the financial incentives but beforeimplementation of the staffing mandates. It could be that facilities beganstaffing at higher levels after the legislation passed but before requirementsbegan. It also could suggest that the harm-deficiency change in Florida maybe related to positive staff response associated with increased wages fromthe $40 million incentive program implemented in 2000.

Specific comments on the perceived effects of the increased staffingmeasures follow in the next section.

DISCUSSION

Improving nursing home quality of care is complex; however, requiring andthen funding new staffing requirements is critical to successful implementation.

FIGURE 2 Percentage of nursing facilities receiving a deficiency for actual harm or jeopardy toresidents, 1999–2007.

Source: Data for figure taken from Table 34, Harrington et al., 2005; Harrington et al., 2008.Note: Deficiencies resulting in actual harm or immediate jeopardy to residents are rated as G+.

0.05.0

10.015.020.025.030.035.0

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Florida’s legislature increased Medicaid average per diem payment 65% over8 years, including from $102.38 (January 1999, the year before incentivepayments were implemented) to $169.09 (January 2007, the year of the 2.9HPRD staffing standard).

However, reimbursement was not the only lever Florida used to improvequality. The regulatory agency developed new rules requiring facilities toreport “short staffing” within 24 hours, to post staff names by shift, and gen-erally to increase the monitoring of daily staffing levels. The surveyorsimproved regulatory oversight with more on-site visits from specially trainedquality monitors who review staffing and risk management programs. Finesincreased for noncompliance. Facilities can now be surveyed every 6 months,and if surveys are poor, they must pay inspection costs. Generally, state andlegislative staffs have placed nursing home performance under a microscopeby requiring and annually publicizing new data.

The following seven lessons can be learned from Florida’s comprehen-sive approach to improving quality.

Lesson 1

Incentives to improve staffing do not increase direct-care staffing ratios; onlyminimum standards increase HPRD. Florida’s incentive payments required anabsolute increase in money spent on direct-care staffing, regardless of changesin resident days. However, even with the $40 million in incentive payments,Florida staffing per resident day actually decreased from 3.8 hours of total staff-ing in 1999 to 3.6 hours in 2001 prior to establishing minimum HPRD standards(Figure 1). Incentives were designed to increase total dollars nursing homesallocated to direct-care staffing, and although they achieved that outcome,many providers increased salaries rather than hours of resident care. Incentivesdid jump-start Florida’s spending on nursing home care and were critical to thestate’s ability to track direct-care productive and nonproductive hours on costreports once the state implemented minimum staffing levels. Incentives did not,however, increase the number of per-resident direct-care hours per day.

Lesson 2

Increased paraprofessional staffing seems to decrease complaints andimproves perceived residents’ outcomes and family satisfaction with care, asacknowledged by all stakeholder groups. As one CNA reported, she nowhas “time to talk with family . . . [and there are] fewer complaints from family.Residents like it when you can talk with them.”

One ombudsman stated:

I used to get two to three [complaints] a day. Now I get two to threecalls a week . . . the nature of calls changed. Now there are calls about

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arbitration, payment, and life care provisions. It used to be calls aboutactual care: “My mother has bruises. She hasn’t been changed or bathed.Her hair smells.”

Another CNA noted now that after the increases, she:

. . . didn’t have to rush through [care] with residents. We can sit withthem and help them write letters. We can have a close relationship withthem. I’ve seen bed-bound residents improve to sitting or beingwheeled around, residents fed with a tube to eating food by mouth, allbecause we have the time to work with them.

The authors are currently using empirical models to assess the impactof the staffing increases on resident outcomes, but the initial state reportssuggest that resident care complaints decreased, deficiencies noted duringsurveys were less serious, and adverse incidents declined as Florida imple-mented its program to improve nursing home care.

Lesson 3

States should establish high staffing standards for each licensed nursing cate-gory. Florida’s standards increased dramatically for paraprofessional staff butnot for licensed nurses (Harrington et al., 2008) (see Table 3). Licensed nurs-ing standards, which include both RNs and LPNs, increased from 0.6 hours to1.0 hour (in 2002); however, average licensed staffing in Florida in 2000 wasactually 60% higher before the new minimum standard was established.Consequently, unlike the CNA standards that forced increases in averagelevel of direct-care hours, licensed staffing actually declined from 1.7 hours(at the beginning of the incentives period) to 1.5 hours of staffing per day in2004. As Mueller et al. (2006) suggest, failure to set appropriately high stan-dards may actually result in facilities justifying a “ceiling” and lowering theirstaffing level to meet the required state level.

A second potential outcome of any state or federal staffing legislationcan be the substitution of one caregiver with another, cheaper, and usuallyless-trained worker, such as LPNs for RN hours, within the licensed nursingcategory. Florida’s report on incentive funding noted that “nursing homesmaximized their staffing options by decreasing the more expensive RNhours and were able to hire more CNAs and LPNs” (Agency for Health CareAdministration, 2001, p. 4). A more careful evaluation of all staffing data isrequired before any substitution effect can be documented, but Florida dataare consistent with a national trend of decreased registered nursing hoursdespite increasing acuity of residents. This is troubling because studies ofpressure sore development (Weech-Maldonado et al, 2004; Horn, Buerhaus,Bergstrom, & Smout, 2005), persistent citations for restraints (Castle, 2002),

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unnecessary hospitalizations (CMS, 2001a), and lawsuits (Johnson, Dobalian,Burkhard, Hedgecock, & Harman, 2004) suggest that RN staffing levels dohave important implications for quality of resident care. States establishingstaffing level mandates need to specify RN levels to prevent the decline inskill mix that may occur if specific RN standards are not established.

Staffing standards could be adjusted to reflect resident acuity as averageannual acuity changes. Acuity already determines Medicaid payment in manystates, and matching staffing standards to acuity levels is certainly possible.A staffing standard annually adjusted to reflect resident acuity ensures thatresident needs continually drive staffing standards and reflect changingnursing home populations. The flexibility inherent in an average acuity-based standard might allow for more tailored reimbursement and efficientdeployment of staff. However, this model may be more difficult to monitorand vulnerable to “gaming” by providers.

Lesson 4

Establishing “minimum” staffing standards results in higher average staffingthan setting an average staffing standard over a 1-week time period. Florida’sflexible 2007 mandate of an average weekly standard of 2.9 HPRD, ratherthan a rigid minimum daily staffing standard, is less costly and easier forproviders to attain because it allows a variance around daily staffing that canbe managed over 7 days. As one Florida official study participant commented,“There is some variance above the minimum because [nursing homes] havethat strict per-day amount that they are not supposed to go below.” As datafrom the flexible weekly standards are reviewed, it will be important tomonitor the marginal average increase in nurse staffing hours; in 2004, staff-ing averaged close to 2.8 HPRD even though the minimum staffing levelwas mandated at 2.6 hours. Although the assumption that increasing theaverage staffing standards from 2.6 to 2.9 HPRD will increase direct-carestaffing by 0.3 hours, or 18 additional minutes per resident, the actual aver-age increase will be lower because the subtle change in language results ina smaller increase than if the minimum standard had been maintained.

Lesson 5

State Medicaid formulas will need technical changes to modify cost capsand allow providers to be reimbursed as staffing costs increase. If costsincrease dramatically because substantial numbers of new staff must be hired,providers should receive Medicaid reimbursement concurrently with theincreased costs. The usual retrospective cost reimbursement process (i.e., set-ting higher rates after Medicaid cost reports are filed and costs are verified) willcreate serious cash flow hardship and jeopardize providers’ abilities to complywith staffing standards. Florida’s implementation experience supports providers’

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needs to receive immediate reimbursement for new staffing costs throughMedicaid formula adjustments. A ramp-up period prior to full implementa-tion is also recommended. Medicaid officials and provider associations com-mented on the managerial challenge around hiring, training, and orientingnew staff. Stakeholders believed that the 2-month period for ramp-ups washelpful but consistently recommended a longer implementation period,preferably a 3-month phase-in, with reimbursement at 25%, 50%, and 75%of the expected costs of full implementation.

Lesson 6

Increases in direct-care staffing cost substantial amounts of money for allthose paying for services: federal and state governments, insurance companies,and private pay residents. As one advocate stated, “The legislature realizedthat good nursing home care costs real money.” This paper documents a65% increase in average Medicaid per diem rates from 1999 to 2007. Whilethe rate change includes nonpatient costs, the direct-care staffing compo-nent increased 86% from $66.94 in 1999 to $124.64 in 2007. The direct-carestaffing rates reflect the hiring of an estimated 7,000 additional CNAs and700 new licensed nursing staff members (Marshall, 2001), wage increases,and increased costs of benefits. A provider noted:

There had been [a] movement for years to increase the quality of workers inthe field and to professionalize field. All care is dollar-fueled; if theresources are there, care can be given. [The legislators wanted] politicalcover from accusation[s] that nursing homes could be providing the care thelegislature paid for; without [more] money, you couldn’t get more care.

Lesson 7

Dramatic increases in new staff challenge managers to deploy staff effectively.Nursing homes need models for using direct- and non–direct-care staff effi-ciently and effectively to improve quality. Mandates requiring jumps in staff-ing strain the administrative and managerial capacity of nursing homes.Integrating new staff into the facility and redesigning work schedules to useall staff effectively require administrative and clinical teamwork. Initiativesto increase staffing should include administrator and clinical staff training onhow to creatively modify staff deployment to achieve best practices.Increased staffing may be a necessary condition for quality of care (Kane,2004), but its full potential may not be achieved in the absence of efficientstaff deployment and management (Schnelle, 2004; Zhang, Unruh, & Wan,2008).

The authors believe that Florida provides implementation insights forother state legislators and regulators intent on improving the quality of nursing

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home care. The comprehensive multipronged approach of reimbursementincreases, high staffing standards, and rigorous regulatory enforcement rein-force each other to create comprehensive reform that results in significantchange in nursing home operations. A key finding is that improving nursinghome care requires substantial allocation of resources; expenditures fornursing homes increased by $1.1 billion over the 8 years. Quality care fordisabled and vulnerable populations is expensive. Florida’s $40 million inincentive payments may not have achieved increased hours of nurse staffingper resident, but incentives increased average provider payments, raisedaverage wages, and primed the reimbursement pump. Facilities preferincentive payments, but if the quality goal is direct-care staffing increases,this study suggests that high staffing standards must be required by statute.Florida’s licensed staffing standard also demonstrates, however, that settinglow licensed staffing standards, undifferentiated by registered nursinglicense, allows skill mix and average licensed staffing to decrease, especiallyfor higher-cost RNs.

Study limitations also need to be noted. Although increased staffingtrends were associated with improved survey results and quality during thistime period, other aspects beyond the comprehensive reform package mayhave also contributed to any reported improvements. All of these potentialimpacts must be accounted for before any definitive conclusions are drawnabout how these reforms ultimately influenced Florida’s long-term careindustry and the residents it serves.

However, there are important strengths of this study. This is the firstknown study to examine the comprehensive efforts of one state toincrease nurse staffing and improve the quality of nursing home care. Thestudy interviewed four stakeholder groups, providing perspectives fromeach; insights from direct-care workers and advocates supplement thedata from providers and regulators. Data from state and federal sourcesthat regulators and legislators used to evaluate the impact of the initiativesare also analyzed. Future studies of the impact of the reforms are underway and should provide additional insights on the effectiveness of thesequality efforts.

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Castle, N. G. (2002). Nursing homes with persistent deficiency citations for physicalrestraint use. Medical Care, 40, 868–878.

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