Payment Rates for Medicaid Home- and Community-Based Services: States’ Responses to Workforce Challenges

Lengthy-standing body of workers demanding situations in Medicaid home- and community-based services and products (HCBS) have been exacerbated by means of the pandemic and addressing them is the highest precedence for many state HCBS systems. New flexibilities mixed with investment supplied in the course of the American Rescue Plan Act helped states enact new insurance policies to handle the ones problems all the way through the pandemic, however a lot of the ones policies are ending and federal investment will expire. This factor temporary describes states’ ongoing efforts to answer the body of workers crunch and the way they pay HCBS staff, that are central demanding situations in making sure that HCBS services and products are out there to the 4 million Medicaid enrollees who use them. The knowledge come from the 21^st KFF survey of officers administering Medicaid HCBS systems in all 50 states and the District of Columbia, which states finished between Would possibly and August 2023. The survey was once despatched to every state respectable answerable for overseeing the management of HCBS advantages (together with domestic well being, non-public care, and waiver services and products for explicit populations comparable to folks with bodily disabilities). All states with the exception of Florida spoke back to the 2023 survey, however reaction charges for sure questions have been decrease. Key takeaways come with:

• All responding states (which contains the District of Columbia) reported taking movements to handle body of workers shortages, together with elevating fee charges in maximum states (Determine 1).
• All states reported shortages of HCBS staff, maximum incessantly amongst direct improve pros, non-public care attendants, nursing group of workers, and residential well being aides.
• Maximum (43) states reported everlasting closures of HCBS suppliers inside the remaining 12 months.
• Some of the 34 states that reported time-based fee charges for private care suppliers, maximum pay lower than $20 in line with hour.

What are Medicaid HCBS and the way are they supplied and paid for?

HCBS are one form of long-term services and products and helps (LTSS), which surround a extensive vary of paid and unpaid clinical and private care services and products. LTSS lend a hand with actions of day by day dwelling (comparable to consuming, bathing, and dressing) and instrumental actions of day by day dwelling (comparable to getting ready foods, managing drugs, and housework). They’re supplied to those who want such services and products as a result of growing old, persistent sickness, or incapacity and is also supplied in institutional settings comparable to nursing amenities or in folks’s houses and the network. Products and services supplied in non-institutional settings are most often known as HCBS and come with quite a lot of services and products comparable to grownup daycare, domestic well being, non-public care, transportation, and supported employment. All kinds of staff supply HCBS, and maximum positions require minimum coaching and training (see Field 1). In 2020, Medicaid was once the principle payer for LTSS, protecting over half of all spending in within the U.S.

All HCBS are not obligatory with the exception of for the required domestic well being get advantages, and maximum advantages—together with non-public care—first become to be had thru not obligatory Medicaid “waiver” systems. If services and products are supplied thru a state plan, they will have to be presented to all eligible folks. Against this, services and products supplied below waivers, comparable to 1115s or 1915(c)s, is also limited to precise teams in line with geographic area, source of revenue, or form of incapacity. Waivers might also come with a much wider vary of provider sorts than will also be supplied below state plans. As a result of all HCBS but even so domestic well being have been first to be had thru waivers, services and products have been most often adapted to sure sorts of Medicaid enrollees comparable to the ones with highbrow disabilities or the ones with bodily disabilities, and get advantages applications have been additionally explicit to these teams’ wishes. Many HCBS are actually to be had thru Medicaid state plans and to be had to all enrollees within the state. KFF estimates that over 4 million Medicaid enrollees use HCBS, and that the numbers of folks the use of HCBS in the course of the state plan are very similar to the numbers the use of HCBS thru waivers.

In KFF’s 2023 survey of state HCBS systems, all states reported providing non-public care and different not obligatory HCBS, maximum recurrently thru 1915(c) waivers (Determine 2, Appendix Desk 2). States are required to supply domestic well being thru their Medicaid state plan and 34 states additionally be offering non-public care in the course of the state plan. All states additionally be offering HCBS waivers—both an 1115 waiver (14 states with one waiver in every state) and/or a 1915(c) waiver (47 states and 258 waivers general). Maximum 1915(c) waivers serve explicit populations, with 47 states having waivers for folks with highbrow or developmental disabilities and 42 states having waivers for people who find themselves ages 65 and older or have bodily disabilities. Ohio was once the one state to document a brand new 1915(c) waiver in 2023, serving folks below age 21 who’ve advanced behavioral well being wishes that will require an inpatient stage of psychiatric care.

Over part of states use managed care to offer no less than some HCBS, in particular for advantages supplied in the course of the state plan or 1115 waivers. In controlled care, states pay controlled care plans a suite commission—continuously known as a capitation fee—for every user enrolled and the controlled care plans are answerable for offering all services and products to enrollees. Use of controlled care to offer HCBS has been growing over time, with states the use of controlled care to make their Medicaid spending extra predictable and to lend a hand coordinate the services and products enrollees use. Some of the 14 states with 1115 waivers, 10 use controlled care plans to offer no less than one of the HCBS and over part of states use controlled care plans to offer no less than some domestic well being and private care. Controlled care was once a lot much less commonplace below the 1915(c) waivers, in particular for waivers serving folks with highbrow or developmental disabilities—of the 47 states with such waivers, best 6 supplied any of the advantages thru controlled care.

How are states addressing the body of workers demanding situations in HCBS?

All responding states reported body of workers shortages in 2023, with the commonest shortages being amongst direct improve pros (50 states), non-public care attendants (49 states), and nursing group of workers (49 states) (Determine 3, Appendix Desk 3). States have been requested if that they had shortages of every form of supplier however weren’t supplied with a definition of scarcity. Maximum states additionally reported shortages in domestic well being aides (47 states), case managers (45 states), community-based psychological well being suppliers (38 states), and occupational, bodily, and speech remedy suppliers (35 states). In some circumstances, states would possibly not have reported a scarcity of a selected form of supplier as a result of that form of provider isn’t presented in the course of the HCBS program.

All states however one (Nebraska) reported shortages for a couple of form of supplier and 48 states reported shortages amongst 5 or extra supplier sorts. Such shortages would possibly mirror ongoing results from the pandemic, but additionally low ranges of repayment coupled with expanding necessities of suppliers. In the summertime of 2021, HCBS suppliers in focus groups reported that their jobs had top bodily calls for and psychological calls for that have been continuously “overwhelming.” The teams described their wages as low, in particular given the calls for in their jobs; and the way staffing shortages made their jobs tougher as a result of they would possibly not know if they’d have the ability to go away paintings on the finish in their shift. In a similar way, within the 2023 survey, California reported “tricky discovering certified suppliers because of low Medi-Cal repayment charges, shedding suppliers because of Digital Talk over with Verification (EVV) necessities, and discovering certified homemaker and attendant care suppliers post-COVID.” (Electronic visit verification calls for suppliers to file electronically the services and products supplied, the recipient, the supplier, and the time, date, and placement of services and products. The federal requirement took impact in January 2020 for private care and in January 2023 for domestic well being services and products.)

Inside the remaining 12 months, 43 states skilled everlasting closures of HCBS suppliers, which have been maximum commonplace amongst grownup day well being systems (32 states), team houses (29 states), and assisted dwelling amenities (27 states) (Determine 4, Appendix Desk 4). States have been requested if there have been any everlasting closures of suppliers inside every form of environment that gives HCBS. Between 10 and 20 states reported closures of supported employment suppliers (19 states), suppliers running in enrollees’ houses (18 states), network psychological well being suppliers (14 states), and residential well being businesses (11 states). Arizona and Tennessee reported that closures have been unknown to the state.

Maximum states reported closures amongst a couple of form of supplier: 37 states reported closures amongst two or extra supplier sorts, 23 states reported closures amongst 4 or extra supplier sorts, and 1 state (Maine) reported closures amongst all 8 supplier sorts. Some closures mirror supplier shortages: Minnesota reported that “suppliers have downsized to coordinate places because of staffing shortages.” Alternatively, some closures mirror the truth that many corporations struggled during the pandemic and feature no longer recovered: Louisiana reported that day services and products weren’t a possible trade fashion all the way through the pandemic as a result of “restricted to no attendance.” (Day services and products, sometimes called day care, are supplied to folks in facilities somewhat than in folks’s houses. The services and products are meant to improve independence and socialization whilst additionally offering circle of relatives caregivers with a spoil all the way through the day.)

All responding states reported taking movements to handle supplier shortages, with 48 states expanding fee charges, 42 states creating or increasing employee training and coaching systems, and 41 states providing incentive bills to recruit or retain staff (Determine 1, Appendix Desk 1). Much less commonplace projects integrated setting up or elevating the state minimal salary (20 states) and providing paid in poor health go away for employees (19 states). States additionally reported a number of different sorts of projects to fortify the body of workers, together with developing platforms or improve programs to attach task seekers with employers and positions, launching a social media marketing campaign, and offering outreach to potential workers.

Some states have everlasting fee price will increase in position for suppliers, however 13 states reported that fee price will increase for no less than one of the staff have been transient. Simplest 14 states have fee formulation that mechanically building up with the prices of dwelling, however the ones formulation don’t practice throughout all sorts of staff.

How a lot do states pay for Medicaid HCBS?

KFF requested states to document their moderate greenback price in line with go to paid to 2 sorts of HCBS supplier businesses (non-public care businesses and residential well being businesses) and 3 sorts of explicit HCBS suppliers (non-public care suppliers, domestic well being aides, and registered nurses), however many states have been not able to document all charges (Determine 5, Appendix Desk 5). The selection of states that didn’t supply fee charges or reported that fee charges have been unknown was once 8 for private care businesses and 24 for domestic well being businesses. Much more states didn’t supply fee charges for explicit supplier sorts: For every explicit form of supplier, just about part of states didn’t supply fee price knowledge or reported that fee charges have been unknown.

If provisions of a proposed Biden Management rule are finalized, states can be required to document such detailed fee charges (see Field 2). If that rule is finalized as proposed, states can be required to document fee charges for sure HCBS and to reveal that no less than 80% of the bills went to repayment for suppliers, additionally described as “direct care staff.” Assembly that requirement will require states to understand each company and supplier fee charges. Some of the states that have been in a position to document fee charges, best 15 may just document fee charges for private care businesses, domestic well being businesses, non-public care suppliers, and residential well being aides, all of which might be required below the guideline. The ones 15 states come with states that reported a mixture of time-based and visit-based charges, which makes comparisons between supplier and company charges extra sophisticated. Given the demanding situations for states in gathering such knowledge, federal steerage could be required to succeed in constant reporting throughout states.

States reported many the explanation why it was once tricky to document fee charges, together with the next.

• Some states reported that services and products have been bundled in combination in more than a few techniques and due to this fact, the fee charges weren’t distinguishable. As an example, New Hampshire wrote: “as non-public care isn’t a definite provider, this information can’t be made up our minds.”
• Amongst states with controlled care, some states spoke back that they didn’t know the fee charges for businesses for the reason that services and products have been paid for by means of controlled care plans and they didn’t have get admission to to these fee charges.
• Different states spoke back that they knew the fee charges for businesses however no longer what the businesses paid their direct care staff. A couple of states reported that they don’t “dictate” what businesses pay to suppliers or that specific suppliers negotiate their very own fee charges with the businesses.
• Nonetheless different states reported that fee charges have been too numerous throughout suppliers and folks. As an example, Indiana reported that fee charges numerous from $400 to $6,000 per thirty days: That variation mirrored the truth that there are over 400 non-public care businesses, and every user has other ranges of wishes which range week to week. Hawaii reported that visits range in the case of what is equipped and that the 5 controlled care plans offering HCBS use other methodologies for gathering knowledge, making it not possible to offer “a correct greenback moderate.”

Along with having problem reporting fee charges, many states reported other fee charges for private care throughout other waivers and the waiver fee charges continuously range from the fee charges for private care supplied in the course of the state plan. When states reported more than one fee charges for private care, KFF used the median of the ones fee charges within the research.

Despite the fact that KFF requested states to document the common greenback price in line with go to, states numerous of their reporting of fee charges, with maximum states reporting fee charges by means of time (both quarter-hour or one hour), and a smaller selection of states reporting charges that have been in line with go to or in line with day. Maximum states reported fee charges by means of time and amongst the ones states, bills for private care staff are most often underneath $20 in line with hour. Charges for domestic well being aides are relatively upper, reflecting the extra coaching necessities for such staff. Some of the states with fee charges within the very best class, some reported that the charges have been in line with go to or in line with day. Others didn’t point out whether or not their charges have been in line with time or some other foundation, however it’s most likely that the majority fee charges within the very best class are in line with go to or in line with day.

Cost charges to domestic well being businesses are most often greater than the ones to private care businesses, however there may be really extensive variation in each (Determine 6). Around the states, the median hourly fee charges to domestic well being businesses vary from $27 to $149 amongst maximum states while the ones for private care businesses vary from $10 to $36.

The fee charges to HCBS suppliers additionally display really extensive variation and are relatively upper than the ones reported by means of different organizations because of variations in reporting and supplier categorization (Determine 6). KFF’s survey estimates that median fee charges to suppliers are $19 in line with hour for private care suppliers, $28 for domestic well being aides, and $43 for registered nurses. It’s tricky to check the ones numbers to these of different organizations for the next causes.

• Different organizations team categories of suppliers in combination in a different way. PHI recently reported that during 2022, domestic care staff made a median of $14.50 in line with hour and home care aides made $15.39 in line with hour. The Bureau of Labor Statistics reviews $14.51 in line with hour for domestic well being and private care aides in 2022.
• Different organizations come with fee charges for employees irrespective of the supply of fee while KFF charges best mirror the Medicaid charges and Medicaid continuously covers extra extensive non-public care services and products than different payers.

Amongst states that ship HCBS thru controlled care, 20 states reported that the fee-for-service fee price is the minimal quantity MCOs may just pay suppliers. Out of the 36 states that use controlled care to offer no less than some HCBS, not one of the states reported that fee-for-service charges have been the utmost quantity that controlled care plans may just pay suppliers. There have been 20 states that reported fee-for-service charges have been the minimal fee charges, 12 states that reported there was once no dating between the fee-for-service and controlled care charges, and four states that reported the solution was once unknown or didn’t reply to the query. Even amongst states that do indirectly tie fee-for-service charges to controlled care charges, the fee-for-service charges would possibly impact negotiations between well being plans and HCBS suppliers, thereby, affecting the controlled care charges. As an example, Texas reported that “the Medicaid commission agenda serves as a number one negotiating software for each MCOs [managed care plans] and suppliers in Texas. Many MCO/supplier repayment contracts are without delay tied to the Medicaid FFS [fee-for-service] commission agenda thru established percentages (e.g., 100%, 102%, 95%, and many others.). Moreover, it is not uncommon for supplier repayment contracts which can be without delay tied to the Medicaid commission agenda (i.e., set at a % of Medicaid) to mechanically regulate when the Medicaid commission agenda adjustments.”

What would possibly occur to the Medicaid HCBS body of workers in the following couple of years?

How does the body of workers scarcity for Medicaid HCBS are compatible in with the wider staffing demanding situations for long-term services and products and helps (LTSS)? Contemporary research at the Peterson-KFF Health System Tracker presentations that, as of June 2023, the selection of staff in LTSS settings was once measurably less than in early 2020. Shortages and top turnover amongst LTSS staff mirror challenging working conditions and reasonably low wages. The Biden Management has launched a proposed rule that will building up nursing facility staffing ranges. KFF analysis presentations that fewer than 1 in 5 nursing amenities would these days meet the degrees of staffing which have been advisable, and considerations had been raised that there aren’t sufficient staff for nursing amenities to rent. Immigrants may just lend a hand fill a few of the ones positions, however a backlog of inexperienced card petitions brought about the State Division to cutoff eligibility for someone who implemented after June 1, 2022. There are considerations that the freeze on inexperienced card petitions will additional exacerbate nursing shortages throughout each well being and long-term care sectors. Those demanding situations will best develop because the inhabitants ages: Arizona estimates that it’s going to wish to building up the body of workers by means of over 35,000 positions to fulfill the calls for of a rising inhabitants of older adults. Such elements spotlight that the body of workers disaster in Medicaid HCBS is a part of an total disaster within the LTSS sector.

How will states proceed to handle body of workers demanding situations in Medicaid HCBS as pandemic-era flexibilities and investment come to an finish? Most of the fee price will increase and bonuses for retention and recruitment have been funded by means of further federal investment to be had in the course of the American Rescue Plan Act, however as that investment expires, states should in finding selection investment resources in the event that they need to deal with spending ranges. The state of New York reported: “Staff problems are paramount and the State is making primary investments to fortify the body of workers thru APRA [American Rescue Plan Act] projects.” States extensively utilized pandemic-era authorities to enlarge get admission to to HCBS, particularly, by means of permitting circle of relatives caregivers to be paid suppliers and lengthening fee charges. The ones government will all finish by means of November 11, 2023, and it’s unknown whether or not the expiration of the ones government will building up demanding situations in having access to Medicaid HCBS.

How will proposed necessities for reporting LTSS fee charges impact states’ bills for Medicaid LTSS? Present proposed laws intention to handle body of workers shortages within the nursing facility and HCBS sectors by means of requiring states to document extra details about Medicaid fee charges and the proportion of states’ bills that pass in opposition to employee repayment. It’s unknown how necessities within the ultimate laws will evaluate with the proposed laws (together with the timeline for states to fulfill the brand new necessities), and whether or not reporting necessities will impact the techniques wherein states pay for LTSS. Each new laws are more likely to put upward power on fee charges and spending on LTSS however there’s no new federal investment for Medicaid’s prices, that are shared between the federal and state governments, so it’s unknown the place the brand new investment would possibly come from. Additionally unknown is whether or not the wish to document fee charges may just deter states from pursuing selection fee approaches comparable to value-based care or bundled bills, which intention to advertise advanced well being and well-being for folks however continuously difficult to understand fee charges for explicit services and products or suppliers.