worker speaking with older adults
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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 several senior living industry advocacy groups.

Also, quality measures that are part of the proposed rule have the potential to burden assisted living providers financially and administratively, some of the groups said in comments to the federal agency.

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.” July 3 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.

United in disagreement

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, in comments dated June 28, 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.

Clarification sought

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’ 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.

Provision has unintended consequences

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 homelike environment, and quality care.”

More data needed

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.”

Funding requested for quality measures

Argentum and NCAL made a case for additional funding to implement the quality measures that are part of the proposed rule while also lobbying to keep as much related oversight as possible at the state level.

“Argentum understands the need for a uniform quality measure set for HCBS services. However, we ask that CMS work with states to ensure that this new requirement does not excessively burden HCBS providers, who are already experiencing financial difficulties due to low reimbursement rates and workforce shortage issues,” Balda said. Additional reporting requirements, he added, “will only serve to exacerbate the issue.”

Additionally, “adequate funding is needed for these efforts,” NCAL’s Truscott and Schewe wrote in their comments.

CMS released its first-ever quality measure set for HCBS in July 2022, saying at the time that although the measures were voluntary, they were expected to become mandatory in the future. At the time, the agency “strongly” encouraged states to use the standards to assess and improve quality and outcomes in their HCBS programs.

The introduction of the voluntary measures, assisted living provider groups told McKnight’s Senior Living then, came amid “longstanding, chronic underfunding” of HCBS that led to provider workforce shortages. The financial issue needed to be addressed, the groups said, noting, however, that they supported the quality improvement effort in general.

Duplicative of state requirements?

Some of the quality measures would become mandatory under the rule proposed in April, and the rule contains several other changes related to HCBS as well. “It is critical to ensure that the proposals made are not duplicative of state requirements,” Truscott and Schewe said.

NCAL said that it supports part of the proposed rule that would require states to report every other year on the HCBS quality measure set for their HCBS programs. “Additionally, we support giving states flexibility in identifying measures that are most appropriate for their population given the variations within each state,” Truscott and Schewe said. CMS said that the measure set would be updated “at least every other year” in consultation with states and other interested parties.

As part of the reporting requirements announced in April, states would be required to establish performance targets for each of the mandatory measures. NCAL said it supports this requirement but that “[i]f established, national performance targets should consider applicability and feasibility across the country.”

Also, Truscott and Schewe told CMS, “It is important to consider that the more data that is asked of providers increases the burden on providers, necessitating the need for adequate funding to support increased data reporting.”

NCAL recommended that CMS not set national performance targets, however, “as this deters from allowing states the flexibility to make informed determinations about the targets.”

Phased-in approach supported

CMS is proposing that the requirements be effective three years after the effective date of the final rule, although reporting for certain mandatory measures and reporting for certain populations of beneficiaries could be phased in over time due to the complexity required for state reporting. “Further, the requirements for states to report stratified data would be phased in over a seven-year period after the effective date of the final rule,” the federal agency said.

Truscott and Schewe said that NCAL supports a phased-in approach to quality measure stratification since the voluntary use of the quality measure set released in July 2022 is relatively new.

“However, measures that require the submission of electronic health records or paper records to be faxed or mailed add either additional administrative burdens or additional cost for assisted living providers,” they said. “Not all assisted living providers use an electronic health record, and implementing one would be costly. NCAL asks CMS to consider funding to support implementation of this proposal.”

As for quality measure reviewing and updating, NCAL said that it supports such efforts “provided that there is an adequate public comment period that includes the opportunity for stakeholders, including stakeholders from the long-term care community, to provide comments. However, it is also important to note that a one-size-fits-all approach is not what is best for individual states.

“State agencies have the primary role of oversight of assisted living. State agencies are in the most appropriate position to determine state-specific quality metrics,” they continued.

The final rule publication date is not known yet.

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