The Ensuring Access to Medicaid Services rule has been finalized.
Most importantly, the challenged “80-20” provision was implemented as proposed, meaning providers will ultimately be forced to pass 80% of Home and Community Based Services (HCBS) reimbursement onto caregiver wages.
The goal of the rule, first proposed by the U.S. Centers for Medicare & Medicaid Services (CMS) in April 2023, is to increase access to HCBS for Medicaid beneficiaries. CMS believes providing 80% of wage reimbursement would help ensure greater access by increasing wages for direct care workers.
“The Ensuring Access to Medicaid Services final rule adopted today will help increase access to home care services and improve the quality of the care workforce through new home care regulations,” the White House wrote Monday in an explanation. “Specifically, the rule will ensure fair compensation for home care workers by requiring that at least 80% of Medicaid payments for home care services go toward workers’ wages.”
During the public comment period and beyond, vendors vehemently opposed the 80-20 provision.
A blanket rule that didn’t take into account the various factors affecting HCBS in different markets across the country, while well-intentioned, was a bad move, according to some of the country’s top home care executives.
Organizations like the National Association for Home Care & Hospice (NAHC) and LeadingAge immediately condemned Monday’s ruling.
“We all agree that more needs to be done to support direct care staff; However, this policy will make matters worse, not better,” NAHC President William A. Dombi said in a statement. “NAHC remains committed to overturning this devastating policy and instead advocating for more practical and rational measures that address the root causes of low workers’ compensation.”
Before Monday, providers and advocates argued that small providers would be hit the most, but the White House maintains that CMS will find ways around that.
“This policy would also allow states to consider the unique experiences faced by small home care providers and providers in rural areas, while ensuring their staff receive an equitable share of Medicaid payments and ongoing training and the provision of high-quality received care,” he said, according to a statement from the White House.
Aside from the differences in Medicaid HCBS markets across states, providers also believe the rule does not take into account the other investments they are making in the workforce, such as training programs and assistive technology, among others.
“We know that CMS has good intentions and a desire to improve the lives of workers, but this policy is unwise and will have serious negative impacts on providers and their customers across the country,” said NAHC Co-Chair Jennifer Sheets The Medicaid Advisory Council (MAC) also said this in a statement.
Addus Homecare Corporation (Nasdaq: ADUS) – one of the largest providers of HCBS in the country – had previously suggested that the 80-20 provision, if implemented as proposed, would force the company to exit certain markets.
NAHC echoed those sentiments Monday, calling the 80-20 rule a “misguided policy that will lead to agency closures.” The policy will also “force providers to withdraw from the Medicaid program” and “ultimately worsen access problems across the country,” NAHC warned.
HCBS providers have been preparing for the worst-case scenario since the rule was proposed last year, but were hoping for a percentage adjustment or a more holistic approach to the issue of caregiver salaries.
“Access to health care is a shared goal, as is increasing compensation for our caregivers,” Tim Hanold, CEO of Care Advantage, told Home Health Care News earlier this month. “I think we can all agree on that. The CMS rule started with good intentions, but if it comes out as written, it will certainly have some unintended consequences. Rate adequacy remains the primary reason for providing fair wages, and I believe that is what the administration should focus on to improve access to health care.”
As of Monday afternoon, the final rule itself had not been released, but providers are expected to have four years to adapt to the new rule.
Katie Smith Sloan, president and CEO of LeadingAge, said the 80-20 rule is not only ill-advised in the best interests of providers, but may also not benefit caregivers.
“As it relates to the Medicaid Access Rule, the lack of infrastructure to collect and report accurate information, funding to address additional resource needs, and data to ensure funds are distributed as intended will impact access to health care,” she said . “Furthermore, given these deficiencies, there is no guarantee that this rule will increase workers’ compensation.”
The 80-20 rule is only one part of the Medicaid Access rule. There are additional provisions aimed at reducing HCBS waiting times for beneficiaries, providing additional transparency to these waiting lists, and improving the quality of reporting.
But for now these provisions have taken a back seat.
“It is unfortunate that the final rule included a mandatory pass-through requirement,” David Totaro, president and CEO of Bayada’s Hearts for Home Care and co-chair of NAHC MAC, said in a statement. “There are so many positive and necessary changes to the regulation, so it is disappointing that this one provision will undo all the good aspects of the regulation.”
This is a developing story. Please check back at homehealthcarenews.com later for more updates and information.