DOH Issues Supplemental Minimum Wage Information
Last Friday, the Department of Health (DOH) distributed an additional minimum wage Frequently Asked Questions (FAQ) document in response to continuing questions from plans and providers. LeadingAge NY and other groups representing MLTC plans have been urging DOH to provide clearer information on mid-year changes to minimum wage funding levels to both plans and providers since the changes may necessitate contract amendments between plans and personal care/home care providers. Although the funding change is effective April 1st, plans were informed of their minimum wage amounts at the end of May.
The concerns arise from a 20 percent decrease in minimum wage funding attributable to the last nine months of 2018 when compared to the funding for the first three months of 2018, the basis of many plan-provider contracts. Although managed care rates that include minimum wage funding are calculated on a State Fiscal Year (SFY) basis, plan-provider contracts are commonly based on the calendar year (CY). While DOH points out that the funding does increase on a SFY basis, given the increase in minimum wage coming at the end of CY 2018, plans and providers who do not reserve sufficient funding to cover that increase will face shortfalls at that time.
While the document acknowledges that "the funding allotted to each MCO is based on an average hourly minimum wage adjustment for the last 9 months of 2018 that is lower than the average hourly minimum wage adjustment for the first 3 months of 2018," DOH believes that the amounts for the final 9 months of CY 2018 are sufficient and that the change is driven by updates to various assumptions, including projected enrollment and program averages, that drive the calculation.
The document provides a breakdown of the individual CY amounts behind the SFY amounts, although it should be noted that the New York City (NYC) figures shown are higher than those incorporated in the rates. The NYC amounts shown are further blended with other Region 1 counties to yield a final Region 1 unit cost adjustment figure (which is also subject to risk adjustment).
Recent indications from DOH that the implementation of state budget provisions will further cut MLTC rates only exacerbate the need for potential contract amendments. LeadingAge NY and other plan and provider representatives are pursuing a meeting with DOH to address these overlapping funding concerns.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841