Addus HomeCare Corporation (Nasdaq: ADUS) has decided to close up shop in Nevada due to recent cuts to Medicaid reimbursement rates in the state.
Frisco, Texas-based Addus provides a mix of personal care, hospice and home health care services. Prior to shutting down operations in Nevada, the company provided those services to about 43,000 individuals across 25 states.
Compared to some of the other states Addus operates in, the company has a relatively small footprint in Nevada. Currently, the company operates primarily in Clark County and Pahrump.
Addus is slated to end its operations in Nevada in 60 days. In the process, up to 300 of its workers could be laid off, according to reports from local outlet 8NewsNow, citing union information.
Effective Aug. 15, long-term care providers like Addus saw a 6% cut to their Medicaid reimbursement rates. The cut eliminated a prior 3% increase implemented in January; prior to that increase, rates had not been increased in over a decade.
The latest cuts to Medicaid reimbursement rates made operating in Nevada difficult for a number of reasons, according to Darby Anderson, executive vice president and chief strategy officer at Addus.
“With increases in cost, including minimum wage and mandatory sick time, the rate structure in Nevada no longer provides for the ability to pay workers a living wage, cover rising benefit costs and provide for the management oversight of service delivery to meet industry standards of practice,” Anderson told Home Health Care News in an email.
The latest cuts to Medicaid reimbursement rates means that it will be more difficult for Nevada residents to receive home care services, Brian Shepherd, chief of staff at Service Employees International Union (SEIU) Local 1107 said in a Monday press release.
“We’ve heard over and over again from consumers and their families that they prefer in-home care over going to a nursing home,” Shepherd said. “With nursing homes stretched to the limit and a major source of concern due to COVID outbreaks, why would the state make it even harder for consumers to get the home care they need and workers to stay in this industry? In a budget and public health crisis, pushing people into high cost nursing homes makes no sense.”
SEIU Local 1107 is the Nevada arm of SEIU, which represents 2 million workers in health care, the public sector and property services across the country.
Aside from limiting the amount of available care, the cuts to Medicaid reimbursement rates will negatively impact the state’s caregiver workforce.
“Caregivers are looking for other kinds of work because they can’t afford to live on $10 or $11 an hour,” Melissa Morales, an SEIU 1107 member, said in the release. “More people need home care but the Nevada Medicaid rate is not enough to hire trained workers to do it. Home care is coming to a crisis point in this state. We need our elected officials to step up and deal with this crisis soon.”
Looking ahead, Addus’ plan is to operate in states where the company has the ability to provide coverage and meet its strategic goals, according to Anderson.
“Addus’ strategy for the past four years has been to focus on states where we can provide statewide coverage for personal care as well as the additional clinical services of home health and hospice,” he said. “We have struggled to meet this goal in Nevada.”