Industry standards remain crucial
Faced with a complex patchwork of state and federal regulations, the senior housing and care industry is closely watching the aftermath of a recent decision by the U.S. Supreme Court. On June 28th, the Court overturned the so-called Chevron doctrine, a 40-year-old legal precedent that required courts to defer to regulatory agencies to interpret ambiguous laws. The decision means that the power to interpret regulatory questions lies with the courts, not the government agencies that impose the rules.
“There will be a shift in the way administrative regulations are interpreted,” said NIC President and CEO Ray Braun. “But it’s early. We don’t know yet how the decision will play out for the senior housing and care industry.”
According to the recent decision, the courts can still side with an agency’s interpretation of a law. Also, rulings in prior cases under the Chevron doctrine are still lawful but can be challenged. Observers expect stakeholders impacted by existing regulations to file numerous lawsuits.
Regulatory efforts going forward are also expected to face more obstacles. The rule-making process by government agencies is likely to slow.
A high-profile issue for the senior housing and care industry that could be impacted is the new minimum staffing rule for nursing homes. Announced by the Centers for Medicare & Medicaid Services (CMS) on April 22nd, the staffing mandate requires that each resident receive a certain amount of care each day. The mandate also requires that a registered nurse be on site 24 hours a day. The implementation of the rule is staggered over a three-year period and does include some exceptions.
The staffing mandate for nursing homes could impact the senior housing labor market since both sectors compete for the same workers. But that scenario may not play out, according to NIC Co-Founder and Strategic Advisor Bob Kramer. “The likelihood that we will see staffing mandates at the federal level has decreased significantly,” he said.
Challenges to the minimum staffing mandate were already in the works when the Supreme Court overturned the Chevron doctrine. Several industry associations had filed lawsuits to stop the mandate. Those groups are now more optimistic about their chances of having the staffing mandate overturned because of the Supreme Court’s recent ruling.
The Chevron decision will not affect Medicare or Medicaid payments, according to Kramer. CMS still has the power to set standards for providers to receive payments, such as a requirement to submit certain reports.
A Big Opportunity for the Industry
Kramer suggested that the Chevron decision presents the senior housing and care industry with an opportunity. “The federal government may be less aggressive in its ability to insist on certain standards,” said Kramer. “But the industry is making a mistake if it thinks the Chevron decision will provide relief from the need to define and demonstrate outcomes to our customers.”
The Court’s decision comes at a pivotal time as negative press coverage and new scrutiny by lawmakers has put the industry in the spotlight. Lawmakers, for example, are taking a hard look at the role of private equity and REITs in healthcare settings, including assisted living.
Added to that, today’s consumers want to know they’re getting value for their dollar. They expect quality standards and demand transparency of data they can trust to make informed decisions. Providers that prioritize quality and transparency are more likely to build trust and foster loyalty among their customer base.
“Our industry is a private pay market,” said Kramer. “Consumers want to know that they can trust the setting and why they should choose your community instead of staying at home.”
Transparency has another plus. Senior living providers can use data on outcomes to show healthcare payors that a community delivers real value by offering preventative care and chronic disease management. Senior living providers could benefit financially by reducing the insurer’s healthcare costs.
“We cannot be silent on quality,” said Kramer. “We have the opportunity to define what the consumer and the healthcare plans can expect. We have the opportunity to take the lead.”
The implications of the Chevron decision provide a timely backdrop for discussions at the upcoming 2024 NIC Fall Conference (Sept. 23rd-25th). The opening session will showcase new research by NORC at the University of Chicago demonstrating the value of senior housing, specifically, the cost savings that long-term care settings offer Medicare and other payors. This ground-breaking research has the potential to transform payments and margins in the senior housing and care industry.
Attendees can also expect to hear more about partnering for health in other educational sessions and during informal discussions with industry thought leaders. “NIC’s Fall Conference is a prime opportunity to gain insights into emerging industry trends,” said Kramer. Register here.