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Now that the Medicaid access rule is finalized, home care business leaders have had time to digest it and consider what it means for the future of the field.
While some recognize the good reform efforts of the Centers for Medicare & Medicaid Services (CMS), others face the grim reality associated with the 80-20 provision.
Home Health Care News recently caught up with these leaders to get their detailed thoughts on the Medicaid Access Rule. Here’s what six of them had to say.
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Finalizing the Medicaid Access Rule poses significant challenges for family-owned and operated home care agencies like ours. The rule provides a six-year implementation window and requires that 80% of Medicaid payments be used for caregiver compensation. This limits our ability to cover essential operational costs because CMS excludes costs such as training, travel and personal protective equipment for direct care workers. Also excluded are all other costs associated with operating a home care agency.
For a small agency with a single location, these provisions are unsustainable. The lack of capacity to absorb these costs like larger agencies could pose a risk to our ability to continue to provide care to this vulnerable population.
Additionally, the current fee-for-service model does not allow us to adopt innovative approaches, such as value-based care, that could benefit our customers and be consistent with the services of our home health partners. This outdated system does not take into account the potential savings and quality improvements achievable through alternative care models.
While the Medicaid Access Rule aims to improve the quality of care, I believe it misses its mark by leaving smaller home care agencies like ours struggling to survive. We urge policymakers to consider more flexible and sustainable approaches so that we can continue to serve this community and contribute to its well-being.
— Bob Roth, managing partner at Cypress HomeCare Solutions
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It’s hard to imagine anything more strict than the 80-20 rule. It’s as if no math was taken into account when considering what 80% of the incredibly low reimbursement rates actually look like. When you think about the states and regions where the minimum wage is the prevailing wage, where should small agencies source the additional funding to maintain compliance from a wage rate perspective?
The simple answer to this question is to immediately stop providing Medicaid-funded services and either A) pivot to a private payments-focused strategy or B) exit the industry through dissolution or desperate acquisition activity. It is difficult to understand how any of these scenarios result in a net positive return for the workforce or for the home care network as a whole.
The only silver lining I can possibly see is that the residential market will see a flood of new or refocused home care agencies competing for the “middle class” dollar. As a result, a larger number of players in this space could potentially create a competitive scenario where billing rates and prices are reduced, at least temporarily, to gain market share.
—Kevin Smith, CEO of Best of Care
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As providers of home care services, we support HHS’s stated goal of expanding access to services like ours for Medicaid beneficiaries while maintaining a stable workforce. We were disappointed that HHS chose to maintain the 80% payment threshold despite receiving over 2,000 comments from our industry and trade groups to HHS last year highlighting the significant challenges of implementing such a provision would bring. We believe that a statewide one-size-fits-all minimum threshold is inconsistent with the goal of ensuring access to Medicaid services, given the wide variation in state waiver programs, which directly impacts administrative burdens across states.
It is very difficult to predict what impact, if any, this requirement would have on our business, even more so as the implementation date has been pushed back by a further two years. We will continually evaluate the states in which we provide care to determine our ability to continue operations. These ratings are based on many factors, including reimbursement rate, business volume and program requirements, and the cost of meeting those requirements. All of these factors are likely to change over the course of six years. We will also monitor legislative actions and legal challenges, each of which could block implementation of the provision.
— Darby Anderson, executive vice president and chief government relations officer at Addus HomeCare Corp. (Nasdaq: ADUS)
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I believe the Medicaid Access Rule is a step in the right direction for many of our beneficiaries, particularly here in Michigan where waiting lists for Home and Community Based Services (HCBS) can be long at times. With 13% of Michigan residents living at or below the poverty level and Detroit facing a staggering 30% poverty rate and a 43% child poverty rate, the need for accessible HCBS programs for people with disabilities and the elderly is paramount.
However, I have concerns about the 80-20 rule because it makes no direct concessions for much-needed increases in Medicaid reimbursements. Most home care services operate with 60-75% payroll overhead, making it difficult to sustainably provide services within current Medicaid rates. At AAHC, we plan to diversify into higher margin service areas, such as hospice, palliative and supplemental care, to offset the impact of this ruling.
Despite these challenges, I strongly support our workforce and recognize the reality of the nursing shortage. Ensuring that our home health aides and CNAs earn a livable wage is not only a moral imperative, but also essential to attracting and retaining talented caregivers to meet the growing demand for HCBS in Michigan and the Detroit region.
While the Medicaid access rule may not be perfect, it is a positive development for beneficiaries. It is my hope that continued advocacy will result in further policy changes and Medicaid rate adjustments that better support HCBS providers and their dedicated staff.
As a board member of the Michigan Home Care and Hospice Association (MHHA), I know this is one of our top priorities and concerns. By working with the states and CMS, I hope we can ensure that vulnerable populations in Michigan and across the country have access to the quality home care services they need and deserve.
– Cleamon Moorer Jr., President of American Advantage Home Care
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Care Advantage shares CMS’s concern for the health of the HCBS workforce and, in particular, the need for more sustainable approaches to DCW reimbursement, particularly given the current inflationary environment and inadequate rates in many state Medicaid programs. Nonetheless, we believe that the 80 percent mandate of the Medicaid Access Rule is likely to result in a number of unintended consequences, all of which will reduce access to care and the quality of care for Medicaid beneficiaries, particularly among smaller providers and rural communities . Disciplined resource allocation and ROI considerations must be an even more important part of an operator’s weekly calculations.
We will continue to significantly grow our business, partner with the payer community through innovative value-based care programs, and advocate for increased reimbursement for HCBS. Care Advantage is committed to this public-private partnership to improve health outcomes and maximize the value of the HCBS model for the communities we serve.
— Tim Hanold, CEO of Care Advantage Inc.
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Help at Home specifically recognizes CMS’s efforts to professionalize Medicaid-funded home and community-based care, particularly services that provide home care for the elderly and physically disabled, as well as recognition of states’ historic investments in home care. We particularly welcome the granting of more time for states to prepare for proper data collection and the granting of compassionate use exemptions due to the impact on providers. In addition, changes to the threshold definitions were important to reflect the fact that good, quality home care includes additional direct support to staff such as training and clinical supervision, as well as travel reimbursement to ensure access to clients, particularly in non-urban settings facilitate.
While we recognize that this is just the beginning of a complex effort to reform the HCBS, we are encouraged by many of the changes made to the rule based on stakeholder input. Like CMS, we remain true to our belief that home care workers must be treated like professionals, receive appropriate compensation, and receive care support that adds value to the client-caregiver relationship and helps coordinate care and health care with home care connect to. We will continue to advocate for higher quality, higher accountability and better support for clients and caregivers who provide essential home services to our Medicaid beneficiaries.