Some Supreme Court justices on Wednesday signaled their willingness to give courts more discretion in interpreting “ambiguous” federal statutes rather than leaving that work to the agencies tasked with implementation.

Abandonment of the so-called Chevron doctrine could have implications for nearly every US sector and industry, including long-term care. Existing practice requires courts to give federal regulators deference when a statute is unclear or could be interpreted two ways, but experts said a change could embolden more lawsuits challenging key rules affecting senior living and skilled nursing providers.

A decision overruling Chevron likely would require Congress to craft more detailed legislation that delegates powers more specifically. It also could “have a significant impact” in keeping administrative agencies from overreaching when such delegation doesn’t exist, said Mark Reagan, managing shareholder of Hooper, Lundy & Bookman.

“This will have impact across the entire regulated economy, including Medicare, Medicaid and other healthcare legislation,” he told McKnight’s. “If overruled, I would expect there to be serious consideration in some quarters to reverse prior decisions made in reliance on Chevron in the healthcare industry, particularly those involving complex Medicare reimbursement methodologies.”

In the long-term care sector, Reagan said the Centers for Medicare & Medicaid Services might have to change how it approaches its requirements of participation and reimbursement rules.

That might not constrain CMS, Reagan said, but instead could lead to more opportunities for successful litigation if the agency’s presumed authority “is far from clear.”

Two fishy cases 

Many conservatives have cheered the possibility of a reversal, which is being pursued by a group of herring fisheries that argue their livelihood is threatened by a Commerce Department rule requiring them to pay for overfishing monitors onboard their boats.

Those fishermen took two separate cases to the court for almost four hours of hearings Wednesday. The full court will weigh Relentless v. Department of Commerce, but Justice Ketanji Brown Jackson had to recuse herself from Loper Bright Enterprises v. Raimondo, in which she heard lower court arguments.

The court’s conservative majority peppered US Solicitor General Elizabeth Prelogar with questions about Chevron’s ability to create regulatory unreliability, or the idea that existing rules can be routinely “flipped” by agencies without any warning to the businesses they regulate. 

“The reality of how this works is, Chevron itself ushers in shocks to the system every four or eight years when a new administration comes in, whether it’s communications law, securities law or competition law or environmental law. It goes from pillar to post,” said Justice Brett Kavanaugh. “It’s just massive change. That is at war with reliance. That is not stability.”

Lawyers for the fisheries argued that courts could review contested agency actions for their persuasiveness, rather than reflexively deferring to the agency’s interpretation. That approach appeared to be favored by the court’s conservatives, too, Reagan noted. 

Liberal leanings

The court’s decision likely will be split, as several more liberal justices appeared inclined to let the 40-year-old doctrine stand.

Justice Elena Kagan used real-life cases ranging from classifying a product for the Food & Drug Administration and possible legislation on artificial intelligence to illustrate why courts might not be the best final arbiters.

“There are just some times when you look at a statute, and the most honest reading is that there is a gap there because of the limits of language, because of the limits of our ability to predict the future. And so who fills that gap?” she asked. “It’s best to defer to people [agency staff] who do know, who have long experience on the ground, who have seen a thousand of these kinds of situations. Judges should know what they don’t know.”

Kagan argued that the intent of Congress is to have the agencies it empowered make those decisions, not a series of federal courts that could conflict with each other based on their geography and political leanings.

Others, including conservative justice Samuel Alito, also questioned whether a revised approach might lead to more judicial activism. He referred to Chevron’s initial popularity when it was adopted by the Court in 1984 as a conservative tool to stymie a liberal DC Circuit Court.

That policy-making concern resonated with Brendan Williams, an attorney and president and CEO of the New Hampshire Health Care Association, the state affiliate of the American Health Care Association/National Center for Assisted Living.

“Those providers looking to the courts for salvation under a new approach should consider Health and Hospital Corp. of Marion County, Indiana v. Talevski, last year’s 7-2 Supreme Court decision that, in my opinion, fabricated out of whole cloth a right to sue publicly-owned nursing homes,” he said. “When courts, even conservative courts, are allowed to make policy, the consequences could be chaotic and unpredictable.”

Williams added that he was nervous that the conservative majority appears ready to institute an older precedent that was effective in the New Deal’s regulatory-building heyday.

“These days, with an utterly inert Congress, the complex task of governance could unravel if those with lifetime appointments, unaccountable in any way to the public, can second-guess agency scientific analyses,” he added. “Though it perhaps seems improbable, the day may come when an agency interprets an ambiguous statute in a ‘reasonable’ way beneficial to nursing homes, and those hostile to the sector challenge that rule before a judge who is also hostile to the sector. …That judge no longer must offer any deference to that agency.  So it cuts both ways.”

Decisions in the two cases are expected before the court adjourns in June.

“Long-term care in America is broken. It’s marked by nursing home bias, too little home care, dubious access and quality, inadequate caregiver shortages, stressed out unpaid family caregivers and growing complaints of structural racism,” said Stephen Moses, president of the Center for Long-Term Care Reform and author of “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

The center promotes universal access to quality long-term care by encouraging private financing as an alternative to Medicaid for most Americans.

“Everyone bewails these problems, but few ask or explain their cause. Most jump to solutions that involve more government money and regulation, but arguably government money and regulation cause these problems,” Moses said. 

The lure of “social insurance,” he said, has prevented policymakers from thinking clearly about potential market-based options.

According to Moses, Medicaid created a “moral hazard” that discourages consumers from using their private savings to pay for their long-term healthcare needs, and it places the burden on taxpayers to pay for such expenses.

“Keeping Medicaid long-term care easy to get while preserving exempt wealth but with later estate recovery as an incentive to plan did not work,” Moses previously told the McKnight’s Business Daily.

The solution, he added is for Medicaid to be used only as a “safety net” for lower-income and indigent individuals. 

“To achieve that objective, we propose to end all Medicaid rules that enable people with substantial income and assets to qualify,” Moses said Tuesday. 

Richard W. Johnson, senior fellow and director of the Program on Retirement Policy at the Urban Institute, noted that “about half the population will never use paid long-term care.” But for those who do need professional care, he said, the risks are not spread evenly across the population.

“Women are more likely to need care than men. People of color are somewhat more likely to need care than non-Hispanic white adults and, importantly, less-educated and lower-income adults are more likely to need care than those with more education and more financial resources,” Johnson said. 

“One thing I would emphasize is the heterogeneity among the older population, and in particular, that there’s a lot of people who are going to be just fine, but there’s a small group who are going to develop serious long-term care needs, and many of them simply do not have the funds to prepare themselves for that eventuality,” he added.

Mark J. Warshawsky, senior fellow at the American Enterprise Institute and former deputy commissioner for retirement and disability policy at the Social Security Administration, said that he largely agreed with Moses’ assessment of the public funding challenge.

“I think he has accurately identified the Dr. Jekyll / Mr. Hyde aspect of Medicaid for long-term care benefits,” Warshawsky said. 

“Although on the one hand, it is marketed and it’s understood in the public mind and among policymakers as a program for the poor, when it comes to long-term care, the reality is that it’s a program for not just the poor, but for the middle class, the upper middle class, and even the wealthy,” he added. “You just look on the internet and type in Medicaid planning, and you’ll get literally hundreds of lawyers that will tell you how to do it. But even without hiring a lawyer, there are some very simple ways of becoming eligible for Medicaid with significant income and assets.”

Although flaws in the Medicaid program may need to be addressed, Johnson said that he doesn’t think that doing so will completely solve long-term care financing issues.

K. John McConnell, PhD, from Oregon Health & Science University in Portland, and colleagues assessed the association of the transition to integrated managed care in Washington Medicaid with health services use, quality, health-related outcomes and measures associated with social determinants of health. Analysis included about 1.45 million Medicaid enrollees in Washington state between 2014 and 2019.

The researchers found that financial integration was not associated with changes in claims-based measures of utilization and quality. While enrollees with mild or moderate mental illness experienced a slight decrease in cardiac events (−0.8%), most claims-based measures of outcomes were also unchanged. Enrollees with serious mental illness experienced small decreases in employment (−1.2%) and small increases in arrests (0.5%). Financial integration was perceived by key informants as an administrative change and did not have substantial implications for how practices delivered care. Behavioral health agencies reported lacking guidance on how to integrate care in behavioral health settings and struggled with new contracts and regulatory policies that may have inhibited the ability to provide integrated care.

“There was a hope that this would be a significant catalyst,” McConnell said in a statement. “The idea was that integrating care within managed care organizations would drive positive changes at the clinical level, and that didn’t really happen — at least not yet.”

One author disclosed personal fees from Omada Health.

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Assisted living operators that provide home- and community-based services to residents who are Medicaid beneficiaries could be affected as states continue to come into compliance with the provisions of the HCBS settings final rule, suggests the results of a KFF survey of state Medicaid HCBS programs.

One expert said that even providers that don’t provide HCBS would benefit from becoming familiar with its provisions.

The HCBS settings final rule in part is meant to protect beneficiaries’ autonomy in making choices and controlling decisions that affect their lives. Senior living industry advocates, however, had warned that the regulation could lead assisted living communities to stop accepting Medicaid as a payment source, causing some residents to need to move to nursing homes or other settings.

In 2023, 47 states provided HCBS through a combination of 1915(c) waivers — used by assisted living operators to provide such services — and 1115 waivers. Currently, 18% of assisted living residents rely on Medicaid to pay for daily services, and 61% of all assisted living communities are Medicaid-certified, according to the National Center for Assisted Living.

In their analysis, the KFF researchers included challenges for states and anticipated effects on those served, and they referenced a white paper released by LeadingAge that was issued this summer and recommended a two-year enforcement moratorium on the rule.

Alice Burns, associate director of the KFF Program on Medicaid and the Uninsured, told McKnight’s Senior Living that the assisted living communities that would be helped the most by the KFF report are those located in states that have not finished implementing the Medicaid HCBS settings final rule.

But even settings that aren’t affected by the final rule might want to become familiar with its provisions, as they could be a preview of what might be coming with an update to Section 504 of the Rehabilitation Act, which Burns calls a “what to watch” rule.

That update could have implications for assisted living providers, she said, because it addresses discrimination and would apply to any provider that takes federal money. So even providers that aren’t paid through a Medicaid waiver could be affected if they provide home health or personal care services. 

The comment period on Section 504 is now closed, but Burns said that the Section 504 rule is so broad that it could affect most assisted living communities. 

“It’s one of those things that if facilities are already in compliance with the HCBS settings rule, the 504 rule probably is not going to add a whole lot more challenges,” Burns said. “But for those who don’t take money from a waiver, or they’re in a state that is not yet in compliance, this rehabilitation rule could be a bigger deal.”

Profile of LTSS users

Another KFF report Burns said would be of interest to both assisted living communities and nursing homes looked at the age distribution of people using long-term services and supports. According to KFF, 6 million people receive Medicaid LTSS.

People aged fewer than 65 years tend not to live in assisted living and are served in their homes or in the greater community. But for adults aged more than 65 years — the assisted living target population — healthcare care plays a much bigger role in long-term care needs fulfillment, Burns said. 

The researchers found that 56% of Medicaid LTSS users are aged fewer than 65 years and are using HCBS, whereas most older adults who use LTSS services are in institutional settings such as nursing homes. Most (62%) of Medicaid enrollees who use LTSS also are enrolled in the Medicare program or are dually eligible for both Medicare and Medicaid. The data, the authors concluded, suggest a consistent unmet need for services, contributing to the risk of unnecessary institutionalization for people with disabilities.

“It points to the fact that one of the barriers to moving more older people into HCBS is that it’s harder to have Medicaid coverage when you’re in assisted living,” Burns said. “You talk about demographics and this interesting age pattern emerges.”

Julie Robison, PhD, from the UConn Health Center on Aging in Farmington, and colleagues compared hospice use and hospice length of stay (LOS) by race and ethnicity among Medicaid-only individuals and those with dual eligibility for Medicare and Medicaid (duals). The analysis included 2,407 individuals and 23,857 duals enrolled in the Connecticut Medicaid program who died.

The researchers found that race and ethnicity were significantly associated with hospice use and LOS in both populations. Non-Hispanic Black and Hispanic decedents had lower odds of using hospice compared with non-Hispanic white decedents. Hispanic decedents also had higher odds of a short LOS. In both populations, hospice use was associated with older age and female sex. Older age was associated with lower odds of short LOS in duals. For decedents with nursing facility stays, Medicaid-only decedents had higher odds of using hospice (odds ratio, 1.49), while duals had lower odds (odds ratio, 0.60) compared with those without nursing facility stays. 

“These findings raise concerns about equity and timing of access to hospice for both Medicaid populations, particularly for Hispanic and non-Hispanic Black decedents, and suggest further analysis of the role of nursing facility stays,” the authors write.

The authors disclosed that the data for much of the work came from the Connecticut Department of Social Services, and the results have implications for the Department of Social Services policy, which could be perceived as influencing the study.

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Spending for services provided at freestanding nursing homes and continuing care retirement communities, which represented 4% of overall spending, increased by 5.6% in 2022, to $191.3 billion, after reporting a 7.8% dip in spending in 2021.

“Nursing homes consist of a lot of Medicare and Medicaid spending, and we saw a decline in Medicare spending in 2021,” CMS Economist Ann Martin, a co-author of the report, said Wednesday during a press briefing held in conjunction with the release of the analysis. “Also, what’s really driving that dip in 2021 overall is the decline in other third-party payers and programs.”

The Medicaid program, out-of-pocket payments and Medicare reimbursements accounted for more than three-fourths of total payments to nursing homes and CCRCs and, in 2022, spending for those payers had strong growth following low growth or reduced spending in 2021.

Martin noted that nursing homes also received much pandemic relief in 2020 supplemental federal funding, which declined from $22 billion in 2020 to approximately $3 billion in 2021.

Most of the decline in nursing homes spending stems from that loss, she said.

Spending for services provided by freestanding home healthcare agencies increased 6% in 2022 to $132.9 billion, accelerating from growth of 0.3% in 2021, according to CMS. Private health insurance, out-of-pocket, and Medicaid home health spending contributed to the faster growth, whereas Medicare spending growth for home healthcare services slowed. Home healthcare-related spending represented 3% of overall spending.

Overall spending growth similar to pre-pandemic levels

“The [overall] 4.1% growth in 2022 was similar to the pre-pandemic average annual growth of 4.4% over the 2016 to 2019 period,” Micah Hartman, chief statistician at the CMS Office of the Actuary and lead author of the report, said during the press briefing. “The share of the economy devoted to health was 17.3%, lower for the second year in a row and down from the peak of 19.5% in 2020.”

He added that the 17.3% figure 2022 was more in line with the average from 2016 to 2019 of 17.5%.

Medicaid and private health insurance spending influenced the overall  growth in healthcare spending in 2022. 

“Medicaid spending increased 9.6% in 2022 after growth of 9.4% in 2021 and 9.3% in 2020,” the authors noted.

In 2022, total spending for private health insurance reached $1.3 trillion, which was approximately $71 billion, or 5.9% more than the amount spent in 2021, according to Martin.

“Private health insurance enrollment grew 1.5% in 2022, and this was the fastest growth in enrollment since 2015 and reflected increased enrollment in both marketplace plans and employer-sponsored insurance,” Martin said. “On a per-enrollee basis, spending for private health insurance increased 4.3% which was slower than the growth of 5.9% in 2021.”

She said the slower growth was due primarily to slower growth in per-enrollee spending for employer-sponsored private health insurance. 

According to Martin, Medicaid spending reached $805.7 billion in 2022, an increase of 9.6%. 

“This was approximately the same rate of growth as experienced in 2020 and 2021, and the third consecutive year of growth above 9%,” she added.

He was one of the experts who during a webinar shared predictions of trends that will shape aging services providers in the coming year.

The decline in the number of long-term care deals is “most likely due to the Fed policy of having raised rates continuously since March of 2022 in an effort to curb inflation, though a slower recovery in occupancy, increased operating costs and challenging labor markets have added to seniors becoming a less desirable commodity,” Branin said.

Higher capitalization rates are partly to blame as well, he added.

“As capital becomes constrained, the potential to invest resources, whether they be financial or human, into turnarounds becomes limited,” Branin said.

It might be a good time to divest of assets that have been a drain on resources and have had a negative effect on a provider’s bottom line, according to Branin.

“Regional team alignment can provide growth opportunities as well as ensuring that you have the right person in the right seat,” he said.

Funds move away from nursing homes

Another trend affecting aging services providers is “the transformation of Medicaid funding for home- and community-based services,” HDG CEO and Principal Erin Shvetzoff Hennessey said. 

The shift of Medicaid funding from institutional settings such as nursing homes to HCBS settings such as the home and assisted living communities is not new, according to John Capasso, executive adviser of senior care at HDG. 

“I think it’s important to note that this has been a trend over the past 20 years or so … [and] has continued to escalate” since the pandemic, he said. Additionally, he said, there has been an increase in Medicaid funding directed toward HCBS.

“The convergence of factors resulting in increased home- and community-based services has … decreased the occupancies of nursing homes,” Capasso said. “There are a lot of factors that could contribute to declines in occupancy, but the transition to patients being cared for in their homes rather than in institutions is an important factor and related to this Medicaid funding that’s occurring.”

He also noted that many states used American Rescue Plan Act of 2021 funds to transition care from institutions such as nursing homes to HCBS settings.

Older adults, particularly the baby boomers — those born between 1946 and 1964 — prefer to age in place in their own homes until it is medically necessary to move to a care setting, Hennessey stated. They tend to wait until they have chronic health issues or difficulty with activities of daily living, she added.

“What we have seen from that is assisted living really shifting from a safe apartment with some meals and minor assistance to a really comprehensive care environment that’s taking care of the whole person,” Hennessey said.

Half of assisted living residents have three or more chronic conditions, and more than 40% have Alzheimer’s disease or dementia, she said.

‘We really recommend watching’ active adult

Hennessey noted that 2022 was a turning point for the relatively new active adult segment. That’s when the National Investment Center for Seniors Housing & Care developed a definition for the community type. And the trend is not going away, she said.

“This is an area that we really recommend watching in the year ahead. While we’re seeing increased acuity in other settings, this is really a place for younger seniors to age and enjoy life,” Hennessey said. “This is also a great option as you’re balancing out how to provide care with much less staffing. So this setting really lends itself to a younger, healthier group of seniors.”

Among other long-term care industry trends discussed by the panelists were the changing aging services employment landscape in light of CMS’ proposed minimum staffing rule for nursing homes, growth in Programs of All-Inclusive Care for the Elderly, skilled nursing facilities challenges and the evolution of hospitals’ post-acute strategies.

For more coverage of the webinar, see McKnight’s Senior Living and McKnight’s Long-Term Care News.

Expanding access to home- and community-based services is the recommendation from a new report from the Schwartz Center for Economic Policy Analysis on unmet care needs among the nation’s older adults.

Using data from the 2020 Health and Retirement Study, the policy note released Tuesday reported that nearly 20% of adults 55 and older — some 20 million people — had difficulty with one or more activities of daily living (ADLs) or instrumental activities of daily living (IADLs). Roughly 8.3 million of those individuals do not receive the help they need. 

Only 23% of adults 55 and older who had difficulty with ADLs or IADLs receive care from a paid professional, including assisted living, home care or skilled nursing facility care. But the report noted that professional care is “prohibitively expensive” for many. The average cost of assisted living in 2016 ranged from about $3,600 to $6,800 monthly, depending on accommodations, while hourly rates of home-based care were roughly $20 per hour. 

The nation’s long-term care system, the report authors noted, puts these individuals at greater risk of injuries and harm.

“Seniors who do not get the care they need are more prone to accidents and have more negative health outcomes, such as more emergency department visits and increased risk of mortality,” the report read. “Research shows that unmet long-term care needs of older adults are associated with higher disability levels.”

Stuck in the middle

The report also found that access to care is not entirely based on wealth. Significant shares of people in all wealth quartiles don’t receive the care they need. Lower-income adults qualify for public assistance through Medicare, Medicaid or other insurance, while wealthier adults can afford professional care — including private pay assisted living, home care or skilled nursing facility care — through private funds. That leaves the middle class most unable to access care. 

Between 42% and 48% of people across all wealth quartiles do not receive any care despite having difficulties with ADLs or IADLs. The authors noted this lack of a wealth gradient was explained in part by different family structures and caregiving behavior across communities. 

Many lower- and middle-income families, for example, provide unpaid family care to older loved ones, while higher income households either pay for professional care, reduce their work hours or quit their jobs to care for older loved ones.

“The gaps in care across the wealth distribution underscore the necessity of universal care for all elderly people,” according to the authors. 

State variances complicate matters

The SCEPA report recommended expanding access to Community Medicaid to help older adults access the care they need while relieving the burden on unpaid family caregivers. Community Medicaid provides financial subsidies to Medicaid beneficiaries through two programs — home- and community-based services waivers, and Aged, Blind and Disabled Medicaid.

But the authors noted that access to these programs varies significantly across states. Even meeting eligibility requirements does not ensure access to Community Medicaid due to additional enrollment caps and years-long waiting lists in some states. Thirty-eight states have HCBS waiting lists, with a combined nearly 700,000 people waiting for services, according to a recent KFF analysis of state Medicaid HCBS programs. 

Expanding access and raising enrollment caps in all states, but especially in states with long waiting lists or low-income and asset-eligibility caps, can help remove the disproportionate burden from family caregivers to ensure access to care for everyone, the authors concluded.

“We are specifically focused on adults ages 55 and older, because we are interested in individuals who are facing disabilities and difficulties due to conditions related to aging,” Forden said. “We use 55 and older instead of a higher cutoff like 65+ as some other analyses do, because the higher age cutoff ignores an important group of adults who also have difficulties but are not likely to qualify for Medicare or assistance through Medicaid.” 

Forden added that if the needs of this population go unmet, then there is a potential need for greater services as they age. Although those adults may not need nursing home or other care of that nature, they may need some form of day-to-day assistance.

“We wanted to make sure that we were capturing these gaps in addition to folks who might need a more intense level of long-term care as well,” she said.

Single people have a harder time accessing the care they need. According to SCEPA, 60% of adults aged 55 or more years who have a spouse or children receive some form of care, compared with only 42% of those without a spouse or children. 

“Now, this is because eldercare in the US is just so heavily dependent on the often unpaid labor of family caregivers,” Forden said. “In fact, family care is the most common source of eldercare, and in our report, you’ll see that in 2020, over half of adults who needed care got it from an adult child or grandchild, and 44% received care from a spouse. That’s compared to only 23% of adults receiving care from a paid professional.” 

Additionally, the data show that health demographics affect the level of care for those 55+. 

“When we look at professional care specifically, a wealth pattern is very apparent,” Forden said.

The least wealthy and the wealthiest among us are most likely to get taken care of, she said, as higher-income adults are more able to afford professional care, and those with the least means are most likely to qualify for public programs that will subsidize the cost of or outright pay for care.

“And what this means is that policies like Medicaid, community Medicaid, miss those in the middle class who likely still can’t afford the increasingly expensive professional care options on the private market and will otherwise have to depend on family care if they have folks who can provide that care,” Forden observed.

For additional coverage of the SCEPA report, visit McKnight’s Senior Living.