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DOH Outlines Process for Funding Home Care Minimum Wage for Medicaid Managed Care Providers

The Department of Health (DOH) held a webinar on Sept. 12th regarding the home care minimum wage. The webinar discussed the framework for providing home care minimum wage funding to providers through Medicaid managed care plans, specifically Partially Capitated Managed Long Term Care (MLTC) plans and Medicaid Advantage Plus (MAP) plans, whose rates DOH is in the process of adjusting. The Medicaid increase incorporates the new home care aide minimum wage enacted by this year’s State Budget. The provision increases the minimum wage for home care aides by $2 above the state’s regular minimum wage, effective Oct. 1st. The home care wage increases by another $1 effective Oct. 1, 2023. Agencies providing aide services, regardless of payor type, are all subject to the mandate. LeadingAge NY will provide slides of the full presentation when they become available.

The Department presented the prior and revised minimum wage schedules for downstate and the rest of the state. The upstate rates reflect the regularly scheduled increase to the overall upstate minimum wage, which is expected to increase to $13.90 in 2023, as well as the additional $2 home care-specific minimum wage increase effective Oct. 1, 2022.

The Department outlined the build-up of MLTC rates for downstate and the rest of the state to reflect the wage increases, which includes funding for wage-dependent fringe for providers. The inclusion of this additional funding was supported by provider groups, including LeadingAge NY. The New York City region reflects a cost of $27.90 per hour, while upstate regions reflect a personal care cost of $29.57. The slides provide an explanation of the rate build-up and provide examples of funding, which may vary plan to plan based on a plan's specific risk score and utilization.

The Department’s presentation was focused on Medicaid funding for home and personal care aide services and Consumer Directed Personal Assistance Services (CDPAS) delivered through MLTC contracts, which comprise 90 percent of the Medicaid home care delivered in the state. Home care minimum wage rates for services delivered through Medicaid fee-for-service (FFS), mainstream managed care, Health and Recovery Plans (HARPs), Programs of All-Inclusive Care for the Elderly (PACE programs), and Licensed Home Care Services Agencies (LHCSAs) serving Assisted Living Programs (ALPs) are currently being developed by the Department. Some of these efforts may include data collection before rates can be finalized. DOH indicated that FFS rates would be increased to reflect the increase, but with Oct. 1st approaching and Medicaid payments subject to a two-week lag, it appears likely that adjustments to FFS rates, as well as PACE and ALP rates, may be made after Oct. 1st.

While increases to Medicaid FFS rates should be straightforward, pass-through of the home care minimum wage rate by Medicaid managed care plans may not be. The Department has made it clear that negotiations between plans and providers may result in providers receiving varying adjustments based on these negotiations and contractual agreements. The published rate amounts are based on regional averages. While DOH is setting no floor, ceiling, or benchmark, providers should receive sufficient funding to meet their wage obligations. Providers and plans should already be negotiating their rates to address the wage mandate. If providers believe that they are receiving inadequate amounts from plans, they should reach out to DOH to demonstrate rate amounts and their insufficiency to the Department.

LeadingAge NY has asked if agencies already paying over the $2 home care minimum wage amount must pay aides an additional $2. The Department has stated that agencies are not obligated to pay above the $2 amount. Most of the Department's guidance and communications on the home care minimum wage rates have been with MLTC plans. LeadingAge NY is asking the Department to issue more definitive guidance directly to provider agencies, particularly to address how providers and plans may use the funds if they already pay the mandated wages.

Additional points on the home care minimum wage increase and MLTC rate build-up:

  • Reflects a $2 increase in home care minimum wage for personal and home care aides and CDPAS assistants effective Oct. 1, 2022
  • Is incorporated as an hourly amount built into the rate for each personal/home care/CDPAS assistant hour projected
  • Is based on regional averages that include some recognition of wage-dependent benefit costs and differ upstate versus downstate
  • DOH makes clear that this funding is not a directed payment, but rather a total subject to provider-plan contracts and negotiations
  • Is analogous to “regular” minimum wage increases since 2019, therefore subject to risk adjustment and not subject to reconciliation for MLTC plans

Members should feel free to reach out with questions on the wage mandate and/or communicate their progress with provider/plan negotiations.

Contact: Meg Everett, meverett@leadingageny.org, or Darius Kirstein, dkirstein@leadingageny.org. Both can be reached at 518-867-8383.