caregiver with resident
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A proposal that the Centers for Medicare & Medicaid Services says is meant to “support and stabilize the direct care workforce” in home- and community-based settings, if it becomes final, ultimately could lead to fewer jobs, stagnant pay for caregivers and a reduction in older adult access to home- and community-based services — the exact opposite of what the government intends, according to senior living industry advocates.

The American Seniors Housing Association, Argentum, LeadingAge and the National Center for Assisted Living were among the more than 2,000 groups and individuals submitting comments to CMS on a rule it had proposed in April titled “Medicaid Program; Ensuring Access to Medicaid Services.” Monday was the deadline for comment submissions.

The proposed rule — with an overall goal of increasing access to HCBS — in part would require that providers spend at least 80% of Medicaid payments for personal care, homemaker and home health aide services on compensation for direct care workers as opposed to administrative overhead or profit.

Although the advocacy groups said they generally support the intentions behind the proposed rule and its provisions, as well as a living wage for direct care workers, a common theme among their comments was disagreement with the spending-related requirement.

“The math does not work” without additional federal funding, LeadingAge Director of Medicaid Policy Georgia Goodman said in her July 3 submission.

“While we are supportive of the intent, this threshold is not tenable for LeadingAge members, and we fear unintended consequences including erosion of service quality, inadequate clinical support for direct care staff causing unnecessary stress on front line staff, and access issues – the antithesis of the goal of the Access Rule,” she said, saying that LeadingAge was “very concerned” about the provision.

Rather than increase pay to comply with the rule, Goodman said, providers most likely would “cut back on other administrative functions that support quality.”

“If this provision is enacted as proposed, we will see more people go without care and not see the growth in wages that CMS is seeking,” she added. “CMS needs to go back to the drawing board.”

NCAL said it was “highly concerned” that the spending-related provision, as written, only applies to payments made for personal care, homemaker and home health aide services.

“By not including all provider types, we are concerned that the workforce will resign from one provider type and move to another provider type because they are paid higher wages related to the 80% proposal,” wrote Pamela Truscott, director of quality improvement, and Jill Schewe, director of policy and regulatory affairs for the organization. “If this shift in workforce occurs, it would have devastating results on resident care and services provided,” they added.

Argentum President and CEO James Balda said that the spending requirement “is not the right approach” to address workforce shortages or increase Medicaid beneficiary access to services. But clarification is needed for assisted living providers to be certain that the proposal would apply to them, he added.

Between 18% and 20% of all assisted living residents receive Medicaid services under state HCBS programs and waivers, Balda said, but “CMS’s proposal is ambiguous, making it unclear whether and to what extent this policy would apply to assisted living or similar residential facilities providing HCBS under state Medicaid programs.”

For instance, he said, CMS “states that it is proposing to require a minimum percentage requirement for homemaker, home health aide, and personal care services because these services ‘would most commonly be conducted in individuals’ homes and generally community settings’ but then separately states that it is soliciting comment on ‘facility-based residential services and other facility-based round-the-clock services….’ ”

CMS should provide clarification and define personal care, homemaker and home health aide services, Balda recommended, noting that state definitions can vary.

But even if the proposal applies to assisted living, he said, without increased reimbursement, if providers are able to use only 20% of payments “to address all other expenses” except caregiver pay, then they will “either reduce HCBS services they are currently providing or cease participation in the Medicaid program altogether, which ultimately would have a negative impact on direct care workforce participation and Medicaid beneficiary access to care.”

And with fewer options in assisted living, Balda said, older adults might be forced to live in skilled nursing facilities, which would be “substantially more” expensive for state and federal governments as well as more restrictive for residents.

ASHA President and CEO David Schless pointed out in his letter that “[a]ssisted living is an important part of the HCBS settings continuum but often unrecognized as such.” Demand for the setting “is growing, the benefits are many, and the average national costs are among the lowest of Long-Term Care Services (LTSS) options and therefore beneficial to taxpayers,” he said, noting recreation and socialization opportunities for assisted living residents. 

The spending provision of the rule, however, may create “unintended consequences that may result in fewer providers able to participate in the program, especially in rural or tertiary markets,” Schless said.

Also, he said, “the timing of such a policy change presents even greater challenges” due to the fact that providers still are emerging from the effects of the pandemic. “Imposing policy changes now without an accompanying payment increase for providers may result in driving providers out of the program, leaving fewer affordable options for older adults in need of this care,” Schless said.

Overall, however, ASHA members “support taking steps to encourage more participation by assisted living providers” to increase overall access for Medicaid beneficiaries, he said. “The community living environment in assisted living combats prolonged social isolation, lack of engagement and loneliness that can contribute to functional and cognitive decline, as well as depression and anxiety in older adults. These benefits should factor heavily as efforts to improve access and choice are considered. This setting meets the intended purpose of HCBS by offering person centered care, a home like environment, and quality care.”

The associations said that more data are needed before the rule is implemented and called on CMS to withdraw the proposed rule and work with the industry to accomplish its goals.

“There is not sufficient data to tell us what this type of proposal could look like without substantially more data collection particularly on rates, rate setting, and provider infrastructure,” LeadingAge’s Goodman said. “CMS presents no data to show why a threshold of 80% was chosen for this proposal.”

“We ask that CMS suspend consideration of this proposal, and instead work with stakeholders to identify other approaches to remedying this issue, particularly by addressing the inadequacy of state Medicaid reimbursement rates for assisted living and similar residential communities participating in HCBS programs,” Argentum’s Balda said.

“NCAL recommends a study to collect data to ensure that there are no unintended consequences from initiating an 80% proposed rule,” Truscott and Schewe said. “More specifically, NCAL recommends data collection and analyses across all provider types including the impact on the operations and resident access to services occur before determining the percentage of the rate that should be applied to support wage adequacy.”

See the associations’ complete comments at the links below.

American Seniors Housing Association comments

Argentum comments

LeadingAge comments

National Center for Assisted Living comments

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