Nursing homes beefed up staff with PPP loans, study finds

Government loans during the COVID-19 pandemic helped boost staffing hours at some nursing homes, with lower-paid certified nursing assistants benefiting the most, according to a study published in JAMA Network Open on Thursday.

More than 15,000 nursing homes received a total of $6.8 billion in loans from the Paycheck Protection Program during the pandemic, according to the Small Business Administration. The study focused on approximately 6,000 nursing homes, of which 1,807 received a PPP loan with a median amount of $664,349 between January and December 2020. The loans were forgivable if the providers spent between 60% and 75% of the money on staffing and payroll.

Researchers found that within four weeks of receiving the loans, the nursing homes began increasing staff time by an average 16.7 hours per week. Certified nursing assistants experienced the most significant increases at 13.5 hours, followed by licensed practical nurses at 2.64 hours. Hours for registered nurses were flat. The staffing increases continued for 24 weeks, reaching a total of 43.54 additional staffing hours per week.

Approximately three-quarters of the nursing homes receiving the loans were for-profit businesses and relied heavily on Medicaid reimbursements to operate. The researchers said the findings suggest federal and state policies should support funding that incentivizes nursing homes to invest in staff.

One example would be "increased Medicaid reimbursements and requiring that a percentage of nursing home revenue directly goes to paying for front-line staff,” said study co-author Jasmine Travers, an assistant professor at New York University Rory Meyers College of Nursing.

The study did not determine if the nursing homes that received the PPP loans were able to maintain the additional staffing hours once the money was all spent. Travers said the research team has applied to the National Institute of Aging for a $3.2 billion, five-year grant to further study if additional funding and staffing hours improved quality of care and resulted in less turnover.

The study comes as the nursing home industry awaits a staffing mandate from the Biden Administration. The Centers for Medicare and Medicaid Services is expected to announce nursing home staffing minimums at any time. The nursing home industry has lobbied vigorously against the mandate, despite a proposed Medicare payment increase of 3.7%, or $1.2 billion for 2024.

During the early months of the COVID-19 pandemic, about 1 in 5 nursing homes reported staff shortages. Earlier this year that ratio had improved to 1 in 8 nursing homes, according to the American Health Care Association. However, many facilities continue to struggle with hiring staff due to strong demand for RNs, LPNs and CNAs from hospitals and home health agencies.