Home Care Groups: Industry Needs More Time To Review ‘One Of The Most Impactful Proposed Rules’ In Medicaid HCBS History

Three major home-based care groups are asking the U.S. Centers for Medicare & Medicaid Services (CMS) for more time to review the agency’s recent Medicaid proposal, which features a handful of provisions that could prove challenging for operators.

Among those provisions mandate thresholds on reimbursement, in which CMS would require that at least 80% of Medicaid dollars go toward worker compensation. Other provisions focus on strengthening access to home- and community-based services (HCBS) and increasing transparency across the Medicaid landscape.

The normal 60-day public comment period on the Medicaid proposed rule is set to close July 3.

But in a joint letter sent to CMS Administrator Chiquita Brooks-LaSure, the Home Care Association of America (HCAOA), the National Association for Home Care & Hospice (NAHC) and the Partnership for Medicaid Home-Based Care (PMHC) argue the industry needs more time to analyze the potential impacts.

“Our organizations have been working to thoroughly understand the implications of the proposed rule and gather data and information to adequately provide meaningful feedback to CMS of impact to the provider system,” the joint letter reads. “It will take our organizations immense time and effort to collect the data to inform CMS’s final decisions in a comprehensive, thoughtful manner.”

HCAOA, NAHC and PMHC aren’t the only health care advocacy groups to ask for more time.

Five other groups – ADvancing States, the National Association of Medicaid Directors, the National Association of State Head Injury Administrators, the National Association of State Mental Health Program Directors and the National Association of State Directors of Developmental Disabilities Services – sent a similar letter on May 17.

“The specific policies CMS proposes to achieve these goals are complex, far-ranging and touch a diverse array of programmatic areas,” the five organizations wrote. “The scope and complexity of CMS’s policy ideas would require significant time to analyze and respond to in normal times. We do not find ourselves in normal times.”

Despite its scope and significance, the CMS proposed rule currently only has garnered 45 public comments to date. That relatively small number may suggest others are continuing to review the material.

The task of reviewing the proposal is further complicated by the end of the COVID-19 public health emergency (PHE).

“Simultaneously, our provider members are just weeks into working with states on impacts from the end of the [PHE] and are dealing with significant work that is in progress around redeterminations and other waiver changes and impacts,” HCAOA, NAHC and PMHC continued in their letter.

Too important to rush

The recently proposed rule would require states to conduct “secret shopper” surveys of Medicaid managed care plans. It would also push states to report more details about HCBS waiting lists, which have historically been difficult to accurately measure.

These and other aspects of the proposal could help paint a clearer picture around Medicaid rates for HCBS and “the significant costs that providers bear,” according to Darby Anderson, an executive at the in-home care provider Addus HomeCare Corporation (Nasdaq: ADUS) and the PMHC’s public policy committee chair.

But the one-size-fits-all provider mandate around wages is impossible to ignore, he explained, noting that such a requirement is “unprecedented” in Medicaid.

“Generally, providers have been very receptive to the vast majority of the Medicaid Access rule and feel that it is a positive proposed rule,” he told Home Health Care News in an email. “That is in stark difference to the specific 80/20 threshold provision, which has created a valid sense of concern across a spectrum of home care providers, large and small, urban and rural.”

A lack of data from CMS to support the proposal is another hurdle in reviewing the wage mandate, according to the industry groups.

Consequently, HCAOA, NAHC and PMHC are working with individual states and their Medicaid programs while independently hunting for data wherever they can find it, they indicated.

On its end, NAHC is looking to survey its members to understand the factors that drive key Medicaid-related expenditures and the resulting proportion of funds spent in various cost-centers, Damon Terzaghi, director of Medicaid HCBS at NAHC, told HHCN in an email.

“[There] are no national data available regarding the portion of reimbursements currently spent on direct care worker compensation, nor is there any compilation of the cost-buildup approaches used to establish Medicaid payment rates,” Terzaghi said. “CMS did not have access to such information when crafting the proposal, and NAHC also did not have any information to inform our response when the rule was released.”

Combined, the federal government and the states together spent a total of $116 billion on Medicaid HCBS in FY 2020, according to Kaiser Family Foundation data.

Annual HCBS funding has gone up over the years, but not nearly in line with the demand for services. Medicaid rates for HCBS have been stagnant in many states, even with skyrocketing demand.

“The lack of available data to truly comprehend its impact is tremendously worrying given that CMS is essentially trying to resculpt a significant portion of the care economy and establish an unprecedented federal mandate on the use and allocation of Medicaid reimbursements,” Terzaghi said.

If CMS moves forward with its wage mandate, it would require a significant influx of additional state funds to help pay for it, advocates maintain.

Additionally, CMS couldn’t move forward without “an evisceration” of administrative activities, such as those that focus on health, safety and quality improvement, according to Terzaghi.

“The 80-20 proposal … is one of the most significant Medicaid-related issues for home care providers in the past decade,” Terzaghi continued. “The rule would create an extremely challenging dynamic whereby providers would be expected to adhere to all of the various state and federal quality, supervision, reporting, health and safety, and other requirements while subjecting them to a challenging limit on the ability to pay for such administrative expenses.”

Anderson echoed those sentiments.

“For PMHC, this is one of the most potentially impactful proposed rules we have seen as an organization,” said Anderson, who encouraged HCBS operators to file comments of their own.

Federal agencies do grant requests for public-review extensions on a fairly regular basis, though not always.

CMS doing so here is critical, industry advocates caution, so the fragile and already strained HCBS ecosystem isn’t disrupted further.

“We are in a time where each day’s immediate priority is ever-changing, and we are working to address them as they come while maintaining high-quality home care services,” Anderson said. “As we note, this rulemaking is too important to rush, so we are hopeful that CMS recognizes the value of our input as stakeholders and provides additional time.”