Medicaid Crisis Brewing Over Home Care Wage Rule

Several state Medicaid programs are unprepared to pay home health workers overtime, minimum wage or traveling expenses under new regulations—though some states, like Kansas, have been more vocal about the issue than others.

A U.S. Department of Labor rule that extends overtime and minimum wage protections to about 2 million home health workers took effect Oct. 13. This was after the Supreme Court denied an emergency request from three home care industry trade groups that alleged the rules threaten home care agencies.

Still, the DOL is not scheduled to actively enforce the rule until Nov. 12, with full enforcement starting Jan. 1.


The home health care industry had argued against the rule, claiming it would render home health care unaffordable for patients. States — which spent through Medicaid over $56 billion in state and federal dollars for those services last year — had largely stayed out of the discussion, according to Modern Healthcare.

Matt Salo, executive director of the National Association of Medicaid Directors, told Modern Healthcare that the new DOL rule overlooks the complexity of how Medicaid administers, pays for and delivers long-term supports and services.

“This is a completely new concept for Medicaid systems around the country,” James Toews, a senior adviser with the U.S. Department of Health and Human Services’ Administration for Community Living, told Modern Healthcare.


Additionally, managed care plans that oversee home health Medicaid benefits might not know they will be responsible for the additional costs, Toews said.

The approval process has many plans concerned, since it is not possible for new rates to be approved and funds to flow prior to the implementation deadline, Leslie Moran, a senior vice president with the New York Health Plan Association, added.

The New York State Department of Health is surveying Medicaid plans to determine how many hours home health providers currently work, so they can figure out how much the rule change will cost the state, Moran said. Texas and Louisiana reportedly are conducting similar surveys.

Still, not all states are ill-prepared. An additional $270 million was put in California’s general fund to cover the costs of the new rule.

About 350,000 California residents currently work providing personal care services to beneficiaries of Medicaid.

Written by Mary Kate Nelson

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