For the first time, the U.S. will reward nursing homes for controlling the spread of infectious disease

WASHINGTON - More than 9,000 nursing homes have been able to show progress in controlling the novel coronavirus infection, according to the Department of Health and Human Services, and will share $523 million in incentive payments as a reward, starting Wednesday.

The emergency spending plan marks a departure for Medicare and Medicaid, which pay for the majority of nursing home residents, in tying financial incentives to infection control measures for the first time.

Over the years, the nursing home business has been shaped by extra fees for services performed - such as therapy, dialysis or care for diabetes - but with none for defending against infectious disease. Nursing home operators emphasized those services, often gaming the system to maximize income, while typically squeezing expenses devoted to standard nursing care. A Washington Post analysis last month found that this practice had left nursing homes acutely vulnerable to covid-19.

About 100,000 residents and employees of long-term care facilities have died of the illness, as nursing homes were caught without the resources and in many cases the staff training to stop its spread.

"These performance payments are an important stimulus for nursing homes fighting to improve their performance in a dire situation," Terry Fulmer, president of the John A. Hartford Foundation and a member of a commission on coronavirus safety in nursing homes, said in a prepared statement. "What is equally important is that we learn from facilities where infection rates were well controlled as well as learn from those facilities where infection control was unsuccessful."

The 9,248 nursing homes account for about 69% of the total nationwide. HHS made a first-round disbursement of $331 million in emergency funds earlier this fall, targeting facilities that, according to a formula, had lower infection rates in September than would be expected given the positivity rate in the counties in which they were located. This second round spotlights those nursing homes that were then able to show a drop in infections and deaths between September and October.

"As we approach the rollout of safe and effective vaccines for our most vulnerable, we continue the innovative program we created this year to incentivize and assist nursing homes in battling COVID-19 and applying the right infection control practices," said HHS Secretary Alex Azar. "This half a billion dollars in incentive payments will reward nursing homes that have shown results in their tireless work to keep their residents safe from the virus."

But the factors for selection are drawn from a monthly snapshot that may not provide a full picture.

"We can anticipate that there will be reviews that examine what it means to successfully meet these criteria," Fulmer said.

For instance, nursing homes in Wisconsin, with less than 2% of the nation's population, are receiving more than 4% of the emergency funds. October saw the state's positivity rate begin to soar, making it easier for nursing homes to look good in comparison as they lagged behind in infections. November's figures will shed more light on whether the good results logged by nursing homes there were temporary or more lasting.

The state taking in the most money -- $41 million total, for 400 nursing homes -- is neighboring Illinois, which has followed somewhat the same trajectory as Wisconsin. With about 4% of the U.S. population, it accounts for nearly 8% of the disbursements.

Nebraska, similarly, is getting a larger share per capita than the average state. There, too, infections in communities spiked sharply beginning only in October.

Nonetheless, said Fulmer, "these 9,200 nursing homes are desperate for additional financing and this comes just in time during this second surge. Protection of residents and health care workers is paramount in this difficult era and these funds provide the resources needed to ensure that there is adequate staffing, PPE, infection control specialists, and frequent testing."

The emergency funds are "a testament to the perseverance and commitment of nursing homes to ensuring residents' well-being under tremendously challenging circumstances," said Katie Smith Sloan, president and CEO of LeadingAge, the association of nonprofit providers of aging services, including nursing homes. "With these much-needed supports, HHS is acknowledging that additional resources are needed to do battle."

Sloan was also on the nursing home commission, which met this summer and recommended the new incentive program.

The American Health Care Association, which represents more than 14,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities, also applauded the program.

“Our health care heroes are doing everything they can to prevent COVID-19 from spreading further, but the level of COVID nationwide in communities puts serious strain on our workforce, supplies, and testing capacity,” an association statement said. “These incentive payments give our providers a fighting chance to contain and defeat this horrible virus, and further incentivizes nursing homes to take appropriate action.”