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DOH Minimum Wage Workgroup Meets for First Time

On June 7th, the Department of Health (DOH) held the first in a series of meetings with a workgroup of provider associations charged with advising DOH on how to adjust Medicaid rates for the increases in the state’s minimum wage that have been enacted into law. DOH officials indicated that they are also meeting with Medicaid managed care representatives and other state agencies that administer Medicaid funds to come up with an overall plan to adjust Medicaid payments. 

At the outset, DOH confirmed the following parameters for Medicaid payment:

·        The 2016-17 state budget included language that allows the Medicaid global spending cap to be further adjusted as needed to accommodate minimum wage payment adjustments.

·        With the requirements taking effect Jan. 1, 2017, the 2016-17 budget includes a $58M appropriation for Medicaid adjustments. The workgroup asked for a table, broken down by provider sector showing the federal and state funds allocated by year for these adjustments.

·        The minimum wage adjustment will cover only Medicaid and will not include other payers such as Medicare. Wage “compression” (i.e., the need for employers to raise wages for other wage tiers in their facilities/programs) will not be recognized in the Medicaid adjustments. 

·        The state intends to pay the Medicaid adjustments beginning Jan. 1, 2017, which will require regulation changes and Medicaid State Plan Amendment submission and approvals by the fall.

There was considerable discussion about how these Medicaid adjustments will be handled through managed care plans and, more specifically, in cases when rates are negotiated between plans and providers. Provider representatives, particularly those representing home care, expressed concerns about whether the rates agencies receive from plans will include enough funding to support the new minimum wage requirements.

Follow-up meetings are planned for July and Aug. DOH is planning to have representatives from the Division of the Budget discuss their fiscal estimates with the group and seek to reconcile them with provider estimates. Also during the July meeting, DOH intends to discuss data that can be used to quantify provider compliance costs, rate methodology issues for the various provider types, and strategies to obtain timely federal approvals. In the third meeting, DOH intends to ask the Office of the Medicaid Inspector General and the Department of Labor to discuss compliance requirements.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8383, ext. 128