Top Legislative Issues
Personal Care Living Wage Adjustment
Memo in Support
Bill Number: A. 1223 (Paulin)
Summary:
HCP strongly supports the personal care living wage adjustment legislation. This legislation would provide an immediate increase in Medicaid personal care reimbursement rates when counties or local governments, including New York City, enact "local living wage laws" that apply to personal care service workers.
Position:
HCP strongly supports the personal care living wage adjustment bill, which would provide for an immediate increase in Medicaid reimbursement when counties or other localities, including New York City, impose "living wage" mandates on home care providers participating in the Medicaid personal care program.
An increasing number of New York State counties, including Suffolk and Westchester Counties as well as New York City, are enacting local "living wage" laws, which require home care agencies that contract with localities to provide "minimum" wages and health benefits at a rate significantly higher than the Federal or New York minimum wage. These local laws are being enacted without addressing the fiscal implications such laws have on home care providers and they result in unfunded mandates that cannot be accommodated under the current Medicaid reimbursement methodology.
Background
The home care industry strongly supports its workers. The paraprofessionals in this industry are the backbone of the home and community-based service delivery system and providers would like to be able to increase wages and benefits. In fact, the industry has been trying to improve wages in the industry for many years. Any changes must, however, be done in a well-thought out manner with appropriate fiscal support. This bill seeks to address the critical fiscal issues that the counties and localities overlooked.
Unfortunately, providers involved in delivering services through the Medicaid programs-in particular the Personal Care Program-cannot accommodate significant increases in wages and benefit packages as other market-driven industries are able to do so. The Medicaid rates paid to providers set the standard for what can be paid, and in many ways set the standard for rates charged to the general public. Without such legislation, Medicaid rates cannot accommodate a "living wage" mandate.
Medicaid home care program rates are set through a cost-based reimbursement methodology, which sometimes reflects the cost of doing business in New York State but more often does not even come close. The reality is that, while New York offers comprehensive Medicaid home care programs to beneficiaries, agencies often struggle to deliver services within the current reimbursement and overly burdensome regulatory structures.
Additionally, the current Medicaid reimbursement structure has a built in time lag of two years. So, even if increased wages and benefits are captured on future cost reports, it would be a minimum of two years before an increase would be reflected in Medicaid rates. At that time, there is no guarantee that the State or county would be willing or able to cover the increases in providers' Personal Care rates.
A.1223 seeks to correct this imbalance for personal care providers in New York State to help support the significant increase in labor costs imposed by local living wage laws that would otherwise not be reflected in Medicaid reimbursement rates for two years.
This legislation would ensure that when personal care providers are required by a county to significantly increase wages to comply with a living wage mandate, the rate that they are reimbursed for such services would capture those additional costs immediately. Thus enabling providers to meet "living wage" requirements and stay in business.
HCP strongly supports A.1223 because it will ensure that appropriate reimbursement rates are paid to home care providers when localities require agencies to comply with unfunded "living wage" mandates and ensure that personal care providers can increase wages for workers without limiting access to care through reduced services or outright closures.
