CMS Issues New Standards for State Nursing Home Surveyors in 2025 Amid Industry Challenges

The Centers for Medicare and Medicaid Services (CMS) has announced new and revamped standards for state nursing home surveyors, set to take effect in 2025. This move comes as the skilled nursing industry faces several challenges, including staffing shortages, financial pressures, and regulatory compliance issues. The new standards are designed to enhance the quality and consistency of surveys conducted at nursing homes, ensuring better care for residents.

One of the key issues highlighted in recent studies is the practice of upcoding by some nursing homes. A study found that nursing homes that previously gamed the Resource Utilization Group (RUG-IV) system are now upcoding under the Patient-Driven Payment Model (PDPM). This practice can lead to inflated reimbursement claims and underscores the need for stricter survey standards to prevent such abuses.

In addition to the new survey standards, there is ongoing litigation regarding CMS’s staffing mandate. Nursing home plaintiffs have urged a judge to halt the mandate, describing it as “textbook unlawful.” This legal battle reflects the broader tensions between regulatory requirements and the operational realities faced by nursing homes.

The financial landscape of the industry is also evolving, with significant transactions and refinancing deals. For example, Dwight Capital recently closed $61 million in HUD refinancing for a 250-bed nursing home, and Strawberry Fields agreed to acquire eight facilities with over 1,100 beds. These developments indicate a dynamic market despite the challenges.

The transition to managed Medicaid is another factor affecting nursing homes, causing a chain reaction of challenges including redetermination processes. This shift is complicating the financial stability and operational efficiency of many facilities.