A female doctor of Asian descent is consulting a black senior male patient. The patient and doctor are sitting next to each other in a medical clinic examination room. The doctor is showing the patient test results on a clipboard.
(Credit: FatCamera / Getty Images)
A female doctor of Asian descent is consulting a black senior male patient. The patient and doctor are sitting next to each other in a medical clinic examination room. The doctor is showing the patient test results on a clipboard.
(Credit: FatCamera / Getty Images)

No guarantee exists that a final rule that the federal government promoted as increasing transparency in Medicaid payments and improving wages for direct care workers will accomplish either goal, senior living experts said Monday.

That’s the day the White House announced the impending release of the government’s final Ensuring Access to Medicaid Services Rule. A PDF of the 1,005-page rule became available late Monday afternoon and is scheduled to be published in the Federal Register May 10.

The final Centers for Medicare & Medicaid Services’ so-called Medicaid Access Rule, as had been proposed, puts in place a controversial provision that requires that at least 80% of Medicaid home- and community-based services payments be put toward wages for direct care workers, including payments for personal care, homemaker and home health aide services.

The rule also requires more transparency in how much states pay for home care services and how they set those rates, as well as the establishment of a home care rate-setting advisory group of beneficiaries, home care workers and other stakeholders to advise the government on provider payment rates and direct compensation for direct care workers.

Between 18% and 20% of all assisted living residents receive Medicaid services under state HCBS programs and waivers, according to Argentum. The American Seniors Housing Association predicts that the rule could lead to fewer assisted living providers participating in HCBS programs.

Doing more with less

Without an overall Medicaid rate increase, ASHA Vice President of Government Affairs Jeanne McGlynn Delgado told McKnight’s Senior Living, the rule amounts to CMS demanding that providers do more with less. It is reimbursement rates that dictate how much providers can spend on wages, she added.

“This will most likely lead to fewer assisted living communities participating in the HCBS waiver program at a time when reimbursement rates are often inadequate to cover the costs of care,” Delgado said. “ASHA believes that efforts should be made to attract more assisted living providers to participate in the HCBS programs, especially as our country faces an aging population that will have a greater need for programs such as the Medicaid waiver program.”

The senior living industry, she said, has greatly increased worker compensation levels to recruit and retain new workers since the COVID-19 pandemic. But operators continue to feel the effects of a workforce shortage, inflationary pressures and high interest rates, Delgado said.

“HCBS services should be made more available and accessible to older adults who qualify, and the final rule falls short of achieving this,” she said.

The National Center for Assisted Living said it appreciated CMS’ intent to increase access and improve quality in HCBS settings, but it is concerned that the final rule may inadvertently do the exact opposite.

“We ardently support increasing wages for direct care workers, but mandating that a certain percentage of Medicaid reimbursement be allocated to wages does not address the core problem — that Medicaid is woefully underfunded,” NCAL Executive Director LaShuan Bethea told McKnight’s Senior Living. “This policy may have unintended consequences, such as driving providers out of the Medicaid program or passing along increasing costs onto private pay residents, when we should be working on ways to make long-term care more affordable and accessible.”

Industry advocates previously raised concerns about the worker payment allocation and quality measure requirements contained in the rule after it was proposed by CMS in April 2023. The rule, they said, potentially could lead to fewer jobs, stagnant pay for caregivers and reductions in older adult access to HCBS.

According to the White House, more than 7 million older adults and people with disabilities rely on HCBS to provide long-term care needs in their homes and communities. The administration said that the final rule will “improve access to those services and improve the quality of caregiving jobs.”

“Higher wages will likely reduce turnover, leading to higher quality of care for older adults and people with disabilities across the nation,” the White House statement read in part. 

David Grabowski, PhD, professor of healthcare policy at Harvard Medical School, agreed that the policy — which he called “huge” news — should improve the supply and wages of home care workers. For senior living communities that serve Medicaid HCBS recipients, he told McKnight’s Senior Living, the hope is that improved wages will attract more staff members and reduce turnover.

“Currently, there is a long waiting list in most states for HCBS,” Grabowski said. “The hope is that this policy will translate to hiring more workers and paying existing workers higher wages. This should lead to shorter wait times and more comprehensive care for Medicaid recipients.”

Aspects of the policy that remain somewhat unclear, however, are how Medicaid HCBS providers currently are spending Medicaid dollars and how many providers fall below the required 80% threshold, he said, adding that another unknown is how well regulators can measure and track spending by HCBS providers. States, Grabowski said, will need to enforce this policy “when providers are not putting sufficient dollars into wages.”

“In theory, this policy has the potential to strengthen the workforce, but in practice there are a number of factors that might undermine the success of the policy,” he said.

Access could decrease

LeadingAge shared similar concerns, saying that the rule, despite its name, could decrease access to HCBS.

“The lack of infrastructure for collecting and reporting out accurate information, of financing to support added resource needs, and of data to ensure that the dollars are being distributed as intended, will decrease access to care,” LeadingAge President and CEO Katie Smith Sloan said in a statement. “What’s more, given these shortcomings, there is no guarantee that this rule will increase worker compensation.”

Sloan called for “bold, creative actions and serious solutions” that address funding and infrastructure needs.

In a member policy update call, held Monday afternoon before the release of the final rule document, LeadingAge Medicaid Director Georgia Goodman said that the association supported the requirements in the proposed rule to increase access and accountability in state Medicaid programs, the implementation of enhanced critical management systems for data reporting and collection, and rate transparency. But she added that she also was “cautiously optimistic” about the ability of states to make all of the changes in the given timeframes.

The rule does have its fans.

SEIU International called the Medicaid Access Rule and the nursing home minimum staffing rule, also announced on Monday, “major investments in an essential workforce that has been historically left behind.” The union’s international president, Mary Kay Henry, said that the rule “will contribute to the growth of a skilled, dedicated and diverse workforce equipped to meet the unique care needs of communities across the country.”

“It is time to put care workers, residents and consumers first and take meaningful action to repair a broken care system that hurts all of us,” Henry said in a statement. “The need to address the long-term care crisis is urgent — and when lawmakers prioritize care, everyone benefits.”

The Biden administration framed the release of the nursing home staffing mandate and the Medicaid Access Rule, along with the Medicaid and Children’s Health Insurance Program Managed Care Access, Finance and Quality rule, as building on the president’s care executive order announced in April 2023. A CMS release called the Medicaid Access Rule a “landmark final rule that will set minimum threshold standards for payments to the direct care workforce, create meaningful engagement with Medicaid consumers, and advance provider rate transparency.”

CMS Administrator Chiquita Brooks-LaSure said that the agency has implemented significant changes across programs to ensure access to the “critical lifeline” afforded by healthcare coverage.

“Now, CMS has set its sights on an equally ambitious goal: making sure that coverage connects people to consistently high quality care, regardless of where they live or receive care,” LaSure said in a statement. “That goal is ambitious, attainable and rooted in the Biden-Harris Administration’s priority to ensure millions of people have access to affordable, quality health coverage and can stay healthy and thrive.”

The standards in the rule are “historic,” CMS said.

Related Articles