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The nursing home industry instinctively responds to the closures of nursing facilities by claiming that Medicaid rates are too low and must be increased.[1] A legislatively-mandated Massachusetts task force on nursing facilities has a different response. Describing declining occupancy in nursing facilities, multiple facilities having both chronically low quality and low occupancy, and the dramatic shift of Medicaid dollars from institutional care to home and community-based alternatives, among other factors, the Nursing Facility Task Force[2] identifies policy options under four broad categories:

  • “[R]ight-sizing” the nursing home industry by closing or repurposing poor quality, low occupancy facilities;
  • Establishing a Medicaid payment system that incentivizes higher occupancy and quality;
  • Strengthening and streamlining “suitability review standards” that determine who can operate nursing facilities; and
  • Strengthening the workforce by, for example, “requiring that a certain percentage of facility expenditures are directed towards staff wages and other direct care costs.”

While it is yet to be seen if and how these policy goals will be implemented, the Task Force is certainly correct that it is not sustainable or appropriate to prop up chronically low quality facilities with low occupancy rates.  As the Task Force notes, these facilities “cannot independently generate sufficient income to offset fixed and variable costs”[3] and “Rates and market forces are not enough to preserve quality nursing facilities and reduce low-quality beds.”[4] A more robust and aggressive policy is needed.

February 20, 2020 – T. Edelman


[1] The Center for Medicare Advocacy has argued that closures have multiple causes.  See “What’s Causing Nursing Home Closures?” (CMA Alert, Apr. 4, 2019),
[2] Nursing Facility Task Force (Jan. 30, 2020),
[3] Id. 10.
[4] Id. 21.

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