The home care battles currently taking place in New York are local in theory. But every provider in the industry should be paying attention.
The Fair Pay For Home Care Act has reached a Democratic majority in the state Senate, with additional support from the AARP and other advocacy organizations. The legislation, which would raise wages for New York’s home care employees, has also been a cause for significant enthusiasm among policymakers and workers alike.
Providers likely do not feel the same way, however.
“I think every provider in New York is concerned,” Darby Anderson, the chief strategy officer at Addus HomeCare Corporation (Nasdaq: ADUS), told Home Health Care News.
The Frisco, Texas-based Addus operates 207 locations in 22 states overall, delivering personal care, home health and hospice services to nearly 45,000 individuals. Six of those locations are in the state of New York.
Though operators are generally for higher wages for their workers, with no corresponding rate increases, the legislation amounts to what Al Cardillo – the president and CEO of the Home Care Association of New York State (HCA-NYS) – calls a “fundamental disconnect in policy.”
“We obviously advocate for the workforce, but we are also comprised of provider organizations,” Cardillo told HHCN. “Our concern, and this is where we really diverge, is that whenever there have been these wage laws and requirements, the funding system has never actually followed through and compensated commensurate with what those obligations are.”
Medicaid rates would have to be hiked to compensate providers enough to be able to dish out the required wages for in-home care workers. Furthermore, Medicare is not controlled by the states. So when states or cities create wage mandates, there’s the discrepancy between reimbursement rates and wage rates.
Instead, increased wages should be a part of an overall structural change, Cardillo argued. The structural change should be put in place, in the form of increased reimbursement rates, and then the system should work backwards to pay higher wages.
For years, HCA-NYS has been trying to advocate for legislation that would require the state to conduct a “competitive labor market analysis.” That analysis would determine appropriate price points for the labor market as well as the thresholds that need to be reached rate-wise to match those price points.
Addus has asked for the same, but neither organization has been successful in its efforts.
“When they introduce these kinds of bills, we always ask for a fiscal study on what it’s going to cost,” Anderson said. “Because they don’t factor in the Medicaid provider networks.”
National ramifications
Wage mandates and hikes are gaining steam across the country. Most notably, the Biden administration has its endorsement of the “Fight for $15” movement.
Blanket wage increase mandates, in addition to the targeted ones like the Fair Pay For Home Care Act, are becoming common. In New York’s case, Gov. Kathy Hochul has touted the idea that legislation can end the labor pressures facing the industry.
Other lawmakers believe the Fair Pay For Home Care Act would do just that. The legislation would ensure that home care workers, beginning Jan. 1, 2023, would be paid at least 150% the rate of the applicable minimum wage in a given area.
“It is imperative in New York State that we look after our community’s elderly and most vulnerable members. That is why I am proud to support the Fair Pay for Home Care Act,” New York State’s Assembly Majority Leader Crystal Peoples-Stokes said in a statement. “This legislation will help to address home care shortages and ensure that essential home care workers are paid fair wages.”
There are examples of these pressures hurting home-based care providers in other states. Albeit not under the exact same circumstances, Bayada Home Health Care recently confirmed that it is laying off 682 workers in Florida while closing four of its locations in the state.
The company cited “external forces” that caused its decision to close its Medicaid-based personal care locations.
While wages have been rising for many home- and community-based services providers, a lack of state investment in reimbursement structures has put providers in a precarious position.
At this point, the Fair Pay For Home Care Act is not in the executive budget proposal in New York, but could potentially be added.
“We don’t know if the legislature will propose it,” Emina Poricanin, managing attorney of the New York-based Poricanin Law, told HHCN in an email. “In New York, a proposed budget is put forth and then the legislature has an opportunity to introduce amendments to it. The final budget is a combination of these proposals and compromises. There are certainly groups pushing for it, and there are other efforts by the governor to reward health care workers generally in the proposal.”
Meanwhile, different legislation has been put forth in New York that aims to help home-based care providers. Drafted by HCA-NYS, the State Assembly introduced this week the “New York Home Care First Act.”
It would “reprioritize home care as a primary option for patients across the continuum of need, and conceptually aligns the state’s policies, rates and procedures with this principle,” according to a press release.
“Individuals across the continuum of need and at risk of institutionalization who could be appropriately and beneficially served by home care should inarguably have this option,” the press release read. “To make this option viable, HCA argued that the state’s policies, financing, supports and related health strategies must be firmly and consistently aligned to this goal.”
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