Governor’s Fiscal Year 2025 Proposed Budget Rewards Quality Nursing Staffing Through Medicaid Bonus Payments to Nursing Facilities

Plan Would Nearly Double Maximum Add-on Payments for Nursing Facilities that Achieve Essential Performance

April 30, 2024

(TRENTON) – In a continued effort to improve care at nursing facilities, Governor Phil Murphy’s proposed budget for next fiscal year nearly doubles maximum bonus payments for facilities achieving quality performance goals, and gives the largest add-on bonuses to facilities that focus on retaining nursing staff and maintaining higher nurse staffing levels.

The proposed budget significantly updates the Quality Incentive Payment Program (QIPP) for nursing facilities to promote high-quality care for residents. Under QIPP, based on how many quality benchmarks they achieve, each facility can earn up to an additional $12.60 per resident per day on top of their normal rate for NJ FamilyCare member residents.

The proposed budget increases the maximum daily bonus add-on to $23.25.

The proposed changes come after Human Services over the last year convened a working group with industry representatives, consumer advocates, health plans, and health policy experts to contemplate changes to QIPP that would further incentivize facilities to improve quality of care for residents.

After reviewing recommendations from the working group, Human Services is, among other changes, proposing the addition of three new metrics upon which facilities will be measured: total nurse staffing hours, nurse staffing retention, and inappropriate weight loss.

“Staffing levels and staff retention both have a major impact on quality of care, so we will now begin incentivizing facilities by financially rewarding achievement and improvement in their staffing ratios and retention,” Commissioner Sarah Adelman said. “I applaud the efforts of advocates and legislators who championed the mandate for stronger staffing ratios in nursing homes. Let’s raise the bar and reward those that invest in higher nurse staffing levels that well exceed minimum requirements.”

To measure performance, Human Services uses federal data required by the Centers for Medicaid and Medicare (CMS). Total nurse staffing hours are adjusted for the level of care needs for each resident.

Total nurse staffing hours represent how many hours of care per day each resident receives on average, which includes care from registered nurses, licensed practical nurses, and certified nursing aides. Under the new proposal, facilities can earn the highest bonus payments by providing at least 4.1 hours per day, or earn a staffing level bonus payment if achieving the state average of 3.8 hours per day and be additionally rewarded for improving their staffing levels year over year as they work to reach the highest benchmarks.

QIPP, launched in 2018, is a collaboration between the Division of Aging Services and the Division of Medical Assistance and Health Services, which administers NJ FamilyCare. NJ FamilyCare is the state’s Medicaid program.

QIPP has evolved to impose more stringent benchmarks when state averages exceed national averages, and prohibit facilities with certain poor quality indicators from receiving quality bonus payments if they have been cited by CMS or the New Jersey Department of Health for chronic poor quality or for violations for harming or potentially harming resident health and safety.

“Our goal is to continue to use this program as leverage for improvement and hope to see real changes in facility staffing levels for the benefit of residents. These changes would build on our previous efforts to enhance the program including the use of stricter benchmarks and withholding bonuses from facilities who fail to adhere to minimum standards of care,” Deputy Commissioner for Aging and Disability Services Kaylee McGuire said.

“I applaud DHS for changing its Quality Incentive Payment Program (QIPP) to reward nursing homes that consistently meet high nurse staffing levels. In our work every day, we see that the amount of time nurses and nurse assistants are able to spend with each resident determines so much about the quality of their care and their lives. The prevalence of residents falling down, contracting infections, developing pressure sores, and losing weight are all shown to be improved by better staffing. For decades, studies have shown that at least 4.1 hours of nursing assistance per resident per day are needed to meet residents’ care needs. This change to the QIPP makes it so much more meaningful and brings NJ more in line with what nursing home residents need and deserve,” said NJ Long-Term Care Ombudsman Laurie Facciarossa Brewer.