The U.S. Centers for Medicare & Medicaid Services (CMS) recently published two proposed rules that have major implications for home-based care providers.
The provision that has created the greatest waves among providers and industry stakeholders is the potential requirement that at least 80% of Medicaid payments for personal care, homemaker and home health aide services be earmarked for caregiver wages.
“This is certainly one of the biggest provisions, and it’s safe to say, the most controversial provision,” Matt Wolfe, office managing shareholder at law firm Baker, Donelson, Bearman, Caldwell & Berkowitz P.C., said during a Home Care Association of America webinar on Thursday.
While this is the first time this sort of threshold has been seen on a national level, similar versions have been implemented in a few states – to varying degrees of success.
Regarding this provision, there are a variety of factors that would make implementing it difficult, according to Wolfe.
“There are a whole host of definitional questions about what is included in compensation,” he said. “Does it include things like federal and state taxes? Obviously, depending on what kind of state you’re in, it’s going to affect how much tax burden is or isn’t there on the state and local level. Then you also have questions about whether workers’ compensation is included, if training is included.”
The provision may also lead to providers dropping Medicaid services.
“As you handcuff providers and tell them how they have to compensate, it may affect their desire or willingness to continue to provide Medicaid services,” Wolfe said. “If this provision becomes cost-prohibitive, there will be a pivot away from Medicaid services and into other other markets like private pay, VA, Medicare, and long-term care insurance.”
Wolfe believes that even providers that don’t work under Medicaid could see the impact of this provision.
“This 80% provision could have a significant impact, because it will change the way in which you go out and hire and compensate and retain your direct care workers, even if you are not providing any Medicaid services,” Wolfe said.
Other proposed medicaid provisions
Aside from the 80% provision, there is a proposed requirement that states must demonstrate that at least 90% of the individuals who are continuously enrolled in its HCBS programs – for more than a year – are annually reassessed for functional needs.
States would also be required to establish a grievance system for HCBS fee-for-service programs. Managed care programs are exempt from this provision.
“This is on top of any grievance programs that may already exist in your state,” Wolfe said. “This is different from the fair hearings process for Medicaid denials, terminations or reductions in services. This is really to allow a beneficiary to be able to complain about the quality of care that they’re receiving, or to be able to address particular concerns they have with how the services are being provided.”
CMS will also potentially require states to publish the average hourly rate paid to direct care workers.
Additionally, states would need to establish an advisory group for interested parties to advise and consult on provider payment rates and pay for direct care workers.
That’s on top of states having to report out information on their HCBS waiting lists.
“Those are all very significant in terms of increasing the database for how the services are provided, how quickly they’re provided, and what level of quality the services are providing,” Wolfe said. “There’s also a lot of provisions that deal with transparency in order to encourage more people to have better information when they’re deciding which agency to use.”
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