Home Health & Hospice Week

At least the change would be 4 years off, if it’s adopted as proposed.

Home care providers soon will find out whether the feds will require states to spend 80 percent of their home and community-based services funding directly on workers’ compensation.

The federal Office of Management and Budget has received the Ensuring Access to Medicaid Services (CMS-2442) final rule for approval, it reported on Jan. 26. That’s the Centers for Medicare & Medicaid Services rule that would require “that at least 80 percent of Medicaid payments for personal care, homemaker, and home health aide services be spent on compensation for direct care workers (as opposed to administrative overhead or profit),” CMS noted in a release when the rule was proposed last spring.

The 80/20 rule would boost workers’ pay, CMS maintained. The agency proposed that the change would take place four years from the rule’s effective date (see HHHW by AAPC, Vol. XXXII, No. 16).

Industry members and representatives have lobbied against the change since its proposal. “Existing low reimbursement rates, coupled with the current adminis­trative requirements and the new pressures from the different parts of this rule will create an untenable situation for many providers,” the National Association for Home Care & Hospice and the Home Care Association of America said in a joint comment letter on the rule. “Instead of increasing access to Medicaid services, the sum of the rule’s components will put providers, including many rural providers and small businesses that serve ethnic and cultural minority populations, out of business, thus exacerbating access challenges,” NAHC and HCAOA insisted in the letter.

Home care providers and their reps aren’t the only ones who opposed the changes. “Twenty-five state agencies commented on this provision, eight of which explicitly opposed the implementation of an 80 percent threshold for direct care worker payments,” reports Medicaid consulting firm Sellers Dorsey in a summary of the rule’s public comments. “The remaining states urged CMS to consider the harmful unintended consequences of this provision if implemented as written,” the firm highlights.

“Rural and frontier states such as Alaska and Maine noted that non-direct costs are likely to be higher than other states. Consistently, states were concerned about their ability to implement this and the potential detriment to recipients of HCBS services,” Sellers Dorsey continues.

Overall, “most commenters … were either hesitant to support the 80 percent threshold for direct care worker payments or outright opposed the provision. Repeatedly, commenters asked CMS to consider the potentially harmful impacts of this requirement. Some suggested other ways to support the direct care workforce while others recommended that CMS spend more time analyzing the potential impact,” the consulting firm concludes.

Watch out: Despite extensive advocacy efforts, “we are unsure whether any changes were made within the text of the final rule,” NAHC notes in its member newsletter.

In other words, providers should be prepared for CMS to follow its recent usual route of making few to no changes to this proposal based on comments, both formal and informal, experts warn.

Both NAHC and HCAOA report that they’ve requested meetings with the OMB to discuss the rule’s negative impact on HCBS access. The OMB website projects an April release for the final rule, although that date is subject to change, NAHC notes. v

Note: The proposed rule is at www.govinfo.gov/content/ pkg/FR-2023-05-03/pdf/2023-08959.pdf. The Sellers Dorsey comment summary is at www.sellersdorsey.com/wp-content/ uploads/2023/05/CMS-PROPOSED-ACCESS-RULES-FINAL-EW.pdf.