Nursing homes report SNF PPS rule to result in layoffs; reduced wages, benefits

Nursing homes plan to lay off an estimated 20,000 workers nationally in light of the final SNF PPS rule for FY2012 that went into effect on October 1, according to a new Avalere Health survey conducted for the Alliance for Quality Nursing Home Care.

The facilities surveyed also reported cancellations of facility expansions or renovations, and nearly 50 percent expect to make cuts in staff benefits. An earlier analysis by Avalere Health LLC, also found the new CMS regulation will reduce Medicare funding to the nation's SNF sector by $79 billion over 10 years.

The survey, held from October 3-17, generated 292 responses representing at least 2,932 facilities, according to Avalere. Small providers (fewer than 100 beds) comprised 37 percent of the respondents; medium providers (100-1,000 beds) 44 percent of respondents; and large providers 19 percent of respondents.

Specifically, the new survey of SNFs reports the following:

Staff reductions. More than one-third (36 percent) of facilities plan layoffs, which include a reported 113 registered nurses, 125 licensed practical nurses and 458 certified nursing assistants.

Postponed hiring. More than one-third (37 percent) of facilities replied “yes” regarding the postponement of hiring direct service staff; 40 percent of facilities replied “yes” regarding corporate or other non-direct service staff.

Postponed/canceled expansions and renovations. Almost one-fourth (24 percent) of facilities will put off an expansion or renovation project in light of the PPS rule, which represents a delay or cancellation of 80-85 facility projects.

Changes to staff wages. Almost three-fourths (74 percent) of facilities will modify staff wages, including wage freezes, across-the-board percentage cuts to wages, cuts to therapy wages, reductions to starting salaries for new employees and elimination of bonus plans. Fifty-eight percent of those respondents indicated that they were already under, or were likely to implement, a wage freeze or reduction in annual increases.

Changes to staff benefits. Nearly half (48 percent) of facilities will reduce or eliminate contributions to 401(k) plans, reduce or freeze contributions to health insurance premiums, and increase cost-sharing for employee health insurance plans, among other changes.

Avalere noted that survey respondents were self-selected and the survey itself distributed via associations representing nursing facility providers, therefore casting doubt on whether the findings are a representative sample of all facilities nationwide.

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