During his first State of the Union speech on Tuesday night, President Biden outlined an initiative to increase regulation on the nursing home industry and private-equity investment in that industry in particular, stating “[a]s Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up…that ends on my watch.” According to President Biden, nursing homes will be subject to increased oversight and regulations as the administration seeks to make good on its promise to improve the quality of care for and safety of residents. President Biden’s initiative to increase oversight for the nursing home industry, which was developed by the Department of Health & Human Services (HHS) through its Centers for Medicare & Medicaid Services (CMS) and unveiled in a White House briefing on Monday, would lead to the most substantial increase in federal nursing home regulation since Congress reformed the industry in 1987.

The center of Biden’s reforms is a new requirement for minimum staffing levels for nursing home facilities. He has ordered CMS to conduct a study to determine adequate staffing minimums and incorporate it into a formal proposal within a year. Biden’s plan also calls for increasing the nursing home inspection budget by $500 million, an increase of nearly 25%, and raising the maximum fine for an individual violation from $21,000 to $1 million. Biden is proposing to create a special inspection program that focuses on low-performing facilities, to raise fines on nursing homes that fail to improve, and, if needed, cut off Medicare and Medicaid payments. Other proposed changes include reducing room crowding, reinforcing measures to limit unnecessary treatments and medications, and other pandemic-related reforms, including increasing the number of infection prevention employees on staff. CMS will also be directed to create a new database that will track and identify owners and operators of nursing home facilities across jurisdictions “to highlight previous problems with promoting resident health and safety.” The agency will collect and publicly report “more robust” corporate ownership and operating data, as the administration seeks to put pressure on and increase the accountability of corporate owners and operators.

While Biden’s proposed reforms have yet to be approved by Congress, it is clear that the Biden administration is not backing down on its campaign promise to improve nursing home safety. Nursing home operators should ensure that they have robust policies and procedures in place to face the increasing scrutiny and regulation.

Authors: Julia Nestor, Kaela Dahan, and Mark Bini