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State health officials have ratcheted up penalties for a small handful of Massachusetts nursing homes with the worst staffing levels in the state.
The change was written into an annual update of state Medicaid payment policies that went into effect Thursday, following a New Bedford Light investigation published in July that found widespread understaffing in the state’s nursing homes. State penalties for understaffing were too low to force nursing homes to change, elder advocates had said.
Facilities that fail to meet a state minimum for nursing staff hours already face a cut to their MassHealth payment rates. That cut had been between 0.5% and 3%, with the highest cuts for nursing homes with the lowest staffing. But starting this month, health officials added a new penalty tier with an 8% cut for nursing homes with the very lowest staffing hours.
The state also introduced a new incentive for nursing homes that staff well above state standards. Those facilities will now be exempt from a separate state requirement that they spend at least three-quarters of their revenue on costs directly associated with providing care to residents.
Elder advocates celebrated the new 8% penalty as a step in the right direction.
“The concern always was that the penalties were at such a low level that they could be the ‘cost of doing business,’” said Paul Lanzikos, co-founder of the elder advocacy group Massachusetts Dignity Alliance. “A lot of operators were willing to accept the financial hit.”
“The concern always was that the penalties were at such a low level that they could be the ‘cost of doing business.’ A lot of operators were willing to accept the financial hit.”
— Paul Lanzikos, co-founder of the elder advocacy group Massachusetts Dignity Alliance
But Lanzikos added that the state should go even further in penalizing nursing homes that fall below staffing standards. And he said the coalition was “deeply concerned” about unintended consequences from the new direct-care spending exemption for higher-staffed homes.
Stacey Nee, a spokesperson for MassHealth, wrote in an email to The Light that the new regulations were added as part of the agency’s annual update process, beginning this past spring, “to better incentivize appropriate SNF [skilled nursing facility] staffing.”
The Light’s monthslong investigation, published this summer, found that half of nursing homes in Massachusetts were violating one or both of the state’s minimum staffing standards introduced during the COVID-19 pandemic.
The state’s main staffing standard sets a ratio of 3.58 “hours per patient day,” or HPPD, for all nursing staff. Facilities that violate this standard are subject to a reduction in their MassHealth payments, depending on how low staffing is. The biggest penalty used to be a 3% cut, but the new rules introduced last week add an 8% cut.
The secondary staffing standard requires that 0.508 HPPD be provided by registered nurses, the staff with the most training and responsibility for resident care. That standard is not enforced at all, The Light previously reported. The new regulations don’t change that.
Elder advocates and researchers had said a cut of just 0.5% to 3% wasn’t a big enough penalty because nursing homes can save so much money by intentionally keeping staff low. In fact, the state’s attorney general has accused at least two nursing home chains of doing just that since the standards were introduced.
Jim Lomastro, an elder advocate with the Dignity Alliance who has experience leading and inspecting healthcare facilities, said the new 8% tier would likely discourage some nursing home owners from seeing penalties as the cost of doing business. After the new regulation came out, Lomastro ran some numbers on what a typical facility might expect to save on understaffing and compared it to what they might lose to the new penalty.
“At 8%, it would look as if it actually could hurt them,” he said. “At 3% those numbers wouldn’t work.”
Still, Lomastro said the state should do more. He recommended a 10% penalty for the most understaffed facilities.
The new 8% penalty will only impact a small group of nursing homes with staffing levels below 3.00 HPPD, far less than the state minimum of 3.58 HPPD. For a facility with 100 residents, that would mean employing 37 or fewer full-time nursing staff on a given day when state standards would require at least 45.
If the new penalty had been in effect during the first few months of this year, it would probably only have increased the penalties for about five facilities, according to The Light’s analysis of the latest available payroll data.
That’s because the vast majority of Massachusetts nursing homes have staffing levels higher than 3.00 HPPD, even though about half of them still don’t meet the 3.58 HPPD minimum staffing standard.
“3.00 is really low,” Lomastro said.
The new regulations don’t change the penalties for understaffed facilities between 3.00 and 3.58 HPPD. They still face a 0.5% to 3% payment cut that elder advocates have said isn’t enough.
The other part of the new regulations gives nursing homes a way to get out of a state requirement that they spend three-quarters of revenue on direct-care costs. These include expenses like nursing staff, food, and medical supplies.
This rule, which was introduced during the pandemic, was designed to “hold facilities financially accountable for prioritizing the support of direct care staff.” Nursing homes that don’t comply face a penalty between 0.5% and 5%.
Facilities can now get out of it if they reach a staffing level of 4.00 HPPD. That’s above the state mandatory threshold, but still below what some advocates and researchers have described as the bare minimum for quality care.
In practice, the change allows nursing homes with relatively high staffing levels more freedom to direct revenue toward costs that have little or nothing to do with resident care.
Lanzikos, the other Dignity Alliance advocate, said this exemption may be “overly broad.” The state should keep a close eye on its impacts, he said.
About one quarter of the state’s nursing homes are on track to receive the new spending exemption, payroll data from the start of this year shows. Most of those reached the direct care spending requirement in 2025, but The Light’s analysis found that at least eight did not.
The public will have an opportunity to comment on the new regulations at a virtual hearing on Nov. 13 at 10 a.m.
The staffing regulations were introduced by MassHealth. Meanwhile, the Department of Public Health, which provides more direct supervision of day-to-day conditions in nursing homes, faces public pressure to strengthen oversight. A Boston Globe Spotlight story last week reported that the agency allowed out-of-state buyers to scoop up Massachusetts nursing homes, even though they had track records of providing poor care.
Hours after the report was published, the department announced it was moving forward with regulations to implement a law that the state legislature passed two years ago to strengthen oversight of long-term care. Those rules are separate from the MassHealth staffing incentives and will come before the Public Health Council for a vote on Oct. 14.
Email Grace Ferguson at gferguson@newbedfordlight.org
Penalties may help. I hope that they will. Might incentives of some kind be better, though, especially if they are given to locally-owned nursing homes?