A Plate with word Medicaid and a stethoscope.
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A proposed federal rule establishing mandatory quality measures for home- and community-based services and requiring providers to allocate 80% of HCBS payments to direct care worker pay now is under final review.

Senior living industry advocates previously raised concerns about the worker payment allocation and quality measure requirements contained in the so-called Medicaid Access Rule after it was proposed by the Centers for Medicare & Medicaid Services in April, saying that it potentially could lead to fewer jobs, stagnant pay for caregivers and reductions in older adult access to HCBS.

The proposed rule was sent to the White House Office of Management and Budget on Friday, and CMS has indicated that it plans to issue a final rule by April.

The proposed rule, in part, would require HCBS providers to spend at least 80% of Medicaid payments received for personal care, homemaker and home health aide services on compensation for direct care workers, not on administrative overhead or profit. It also mandates some HCBS quality measures.

The American Seniors Housing Association, Argentum, LeadingAge and the National Center for Assisted Living were among the more than 2,000 groups and individuals that submitted comments to CMS last year. Among the unintended consequences of the rule, they said, will be an erosion of service quality, inadequate clinical support for direct care staff members and access issues. But it also remains unclear whether and to what extent the rule would apply to assisted living or similar residential facilities providing HCBS under state Medicaid programs.

“NCAL applauds CMS’ efforts in the proposed rule as they relate to consistency, transparency and increasing access to healthcare services,” an NCAL spokeswoman told McKnight’s Senior Living. “At the same time, we are concerned that several of these reporting requirements and provisions are duplicative and will ultimately increase administrative burden on assisted living communities.”

The NCAL spokeswoman also said the organization supports efforts to address wage adequacy but that it believes that the direction outlined in the proposal inadvertently will increase workforce challenges and that the proposed rule fails to address the “critical importance for policymakers to properly fund Medicaid.”

In its original comments, NCAL raised the concern that by not including all provider types in the rule, workers would resign from one provider type and move to another due to higher wages related to the 80% payment proposal.

LeadingAge raised similar concerns about the proposed rule.

“While we broadly support the intent of the Medicaid Access Rule — to improve access to and quality of services to participants — we have concerns with states’ abilities to operationalize the objectives in the proposed timelines for numerous reasons, including limited available funds, time and state staff,” LeadingAge Vice President of Home Based and HCBS Policy Mollie Gurian told McKnight’s Senior Living on Tuesday. “The most problematic piece of the proposal would require 80% of Medicaid funds paid for homemaker, home health and personal care services — delivered under 1915 and 1115 authorities — to be directed to direct care staff compensation.”

CMS did not include adequate data to support its proposal, nor did the agency assess the effects on the provider community, Gurian said. LeadingAge also raised concerns that CMS at some point could look to implement a similar policy for members who provide assisted living, adult day and other Medicaid-funded HCBS services.

Industry advocates previously had recommended that CMS withdraw the proposal and address what they believe is the inadequacy of state Medicaid reimbursement rates for assisted living and similar residential communities participating in HCBS programs.

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