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On August 1, Montana will institute across-the-board cuts to Medicaid reimbursement rates, jeopardizing the care of thousands of seniors and people with disabilities.

Home care agencies, hospitals, mental health centers, group homes for people with disabilities and other health care providers face cuts of 2 percent — rolling back the increase they received in 2009.

Assisted-living facilities, however, will have their reimbursement rates slashed by 10 percent, reversing a 10 percent increase the state enacted two years ago as an incentive for these facilities to accept people with Medicaid coverage, reports the Billings Gazette.

The Medicaid-rate cuts will be enacted as part of legislation setting Montana’s budget for the 2012 and 2013 fiscal years, which was signed by Gov. Brian Schweitzer (D) in May.

Thousands Affected

Overall, more than 2,300 Montanans use the Medicaid waiver program to receive long-term services and supports in the “least restrictive setting” possible.

Rose Hughes, executive director of the Montana Health Care Association, which represents assisted living facilities and nursing homes in Montana, said that her organization is “very concerned that the assisted living cuts will affect access to these services for elderly Medicaid waiver clients.”

An estimated 800 Montanans covered by Medicaid live in assisted-living facilities.

Evictions Likely

Operators of assisted-living facilities say the 10 percent cut is unacceptable.

They are already losing money on Medicaid residents, they say. The cut will likely force them to evict Medicaid residents in favor of private-pay clients.

Mike White, who operates several assisted-living facilities in Montana, told NBC Montana that it is “completely unreasonable to expect facilities to stay in business when their costs are increasing and you’re cutting their revenue by 10 percent.

“How many businesses can deal with that?” White added.

Damage to Transition Program

Hughes notes that the cuts will do great damage to Montana’s “very successful” nursing home transition program, in which the state works with nursing homes to identify individuals who can successfully transition to assisted-living facilities and other home- and community-based services.

“These transitions won’t happen if assisted-living facilities are financially unable to accept these residents,” Hughes said.

Since Medicaid rates are higher for nursing homes than for assisted-living facilities, Montana will incur greater costs if the transition program is weakened.

Amendment Affects Direct-Care Workers

Meanwhile, the budget legislation included an amendment appropriating funding for pay increases and bonuses for direct-care workers employed by Medicaid-funded nursing homes and community-based services.

The appropriation, however, will be $500,000 less than in the previous biennium.

“We are obviously pleased that the Montana Legislature chose to renew the appropriation for direct care wages that was set to expire,” even at a lower rate than in previous years, said Mike Hanshew, director of policy for Consumer Direct Personal Care, a for-profit home care company with locations in Montana and seven other states.

However, because of the cuts to Medicaid reimbursement rates, direct-care workers will likely see no direct benefit from that appropriation, he added.

Medicaid-funded in-home service agencies such as Consumer Direct Personal Care will have difficulty doing “anything more than maintain our current levels of services and direct-care worker compensation,” Hanshew said.

– by Matthew Ozga

Montana state capitol building

The Montana Senate passed a House budget bill (HB 2) on March 30, after adding over 160 amendments, including one that appropriates funding for a time-limited pay increase or lump sum bonus for direct-care workers employed by Medicaid-funded nursing homes and community-based services.

If the measure is signed into law, the two-year wage appropriation would become effective on July 1.

Medicaid-funded long-term care providers who want to receive higher reimbursement rates to enhance their direct-care employees’ wages would be required to apply, and include a distribution plan for the increased payments. Providers who receive the increased rate will also have to complete an end-of-the year report to demonstrate that the enhanced payment was distributed to their direct-care workers as intended by the legislature.

Legislators Recognize Importance of the Workforce

“Legislators in Montana hear the drum beat of an aging population and know that they need to invest in the direct-care workforce,” said Mike Hanshew, who is the director of policy for Consumer Direct Personal Care, a privately owned, for-profit home care company, and advocated for the amendment.

“The providers will be glad to have the rate increase. Most likely they will give their direct-care workers lump sum bonuses instead of a time-limited wage increase because a quarter more per hour is not much when you only work 20 to 30 hours a week,” Hanshew said.

The average hourly wage rate for direct-care workers in Montana is about $10 to $11, according to Rose Hughes, executive director of the Montana Health Care Association, a non-profit, long-term care facilities professional association, which has been a key proponent of the amendment.

Providers from 93 nursing homes and about 50 community-based agencies would be eligible to apply for the enhanced rate increase which could potentially affect 6,000 direct-care workers in the state.

“The wage increase is well-deserved; the direct-care workers appreciate it and need it,” Hanshew said. “For many workers, wages have been frozen for two years. The legislators recognize the deserving nature of this workforce and the need.”

“We are fortunate in Montana that our legislators recognize the importance of the workers who care for our elderly and disabled in nursing homes and community settings,” Hughes agreed.

Funding Critical for Providers and Workers

“This funding is critical to the ability of providers to recruit and retain staff and for our workers who need this money to make ends meet. We feel strongly that we must continue to value these dedicated workers who are so committed to providing excellent care to those who need their help, and this funding is part of doing that,” Hughes continued.

The amendment, introduced by State Senator Rowlie Hutton (R), added about $5 million in state special revenue and $10 million in federal funds to the budget.

The budget bill passed the Senate in a 34-16 vote and will be taken up next by the Conference Committee.

“The wage amendment will make a huge difference,” Hanshew said. “While everyone is hoping for better economic times in the future, they will be grateful for the payment increase despite the one-time nature of the funding.”

Legislative History of Addressing Direct-Care Workers’ Needs

Montana has a long legislative history of addressing the needs of the direct-care workforce, Hanshew explained. The state legislature voted to provide enhanced Medicaid reimbursement for health coverage to providers who deliver in-home personal assistance and private-duty nursing services to the elderly and people with disabilities beginning in 2009.

More information on this legislative initiative is available in the PHI Health Care for Health Care Workers Case Study: Health Care for Montanans Who Provide Healthcare (pdf).

– by Deane Beebe

Official seal of ARRA

As states struggle to balance their budgets in the face of a deep recession, there has been little good news for long-term care.

At least three states, however — North Dakota, Montana, and Oregon — are using funds from the American Recovery and Reinvestment Act (ARRA) to stabilize and enhance their direct-care workforces. Read the full story

Are rising gas prices making it harder for you to deliver or receive care? Add your comments at the end of this post. 

We all feel the pinch from high gas prices, but for home care workers it’s more of a punch. As PHI President Steven Dawson puts it: “The doubling of gas prices over the past few years has been like a pay cut for many home care workers — particularly those serving clients in rural areas.

“Policy makers like to believe that home care is cheaper than nursing homes, but that’s only true because home care workers are paid less than nursing home workers, often without health benefits,” adds Dawson. “There’s not much good to say about higher gas prices, except perhaps that they will now force policy makers to look more closely at the real costs of shifting toward home-based care, and in response create realistic reimbursement policies that will offer home care workers a true livable wage and benefits.”

When PHI’s Michigan State Director Hollis Turnham wrote about the home care gas crisis in our blog in June, talking about the problems she was already hearing about, anticipating others, and asking what other people were experiencing, the response was swift and impassioned. An employer called rising gas prices “the 500 lb gorilla in the room for home care agencies.” A home care worker talked about seeing turnover increase and “looking for something closer to home myself.” The head of a home care and hospice aide recruitment agency said he planned to do “something very tangible to address this issue,” though he wasn’t ready yet to say just what. 

Read the full story

If you’re a direct-care worker or you work with direct-care workers, you may want to help spread the word about the earned income tax credit (EITC). Direct-care workers who file a federal tax return this season could be eligible for thousands of dollars in state and federal credits and refunds, mainly through the federal EITC, which will return up to $4,716 per person to eligible low-income taxpayers. But as much as a quarter of all EITC funds go unclaimed each year because so many people don’t know they’re entitled to them.

Direct-care workers who file a federal return may also be eligible for an EITC from their state or for one of the economic stimulus payments being made this year by the federal government. The economic stimulus payments will generally range from $300 to $600 for individuals and from $600 to $1,200 for joint filers, plus $300 for each qualifying child.

The Center on Budget and Policy Priorities website has a useful section on the national EITC. Its online toolkit includes a calculator to estimate how much of a return to expect and tips on how to get taxes prepared free of charge, how to file electronically to get your money back fast, and more.

Another useful website is I-CAN, an online tax filing system that helps low-income taxpayers file their federal forms free of charge and includes information about the EITC. Taxpayers in California, Michigan, Montana, New York, and Pennsylvania can also file their state taxes free through I-CAN.

June 6, 2007 – Montana has approved a new way of providing health care coverage for health care workers. As of January 2009, the state will increase its Medicaid payments to agencies that deliver in-home care so they can purchase health insurance for a significant number of their direct-care employees.

“We applaud Montana’s ground-breaking legislation,” says Carol Regan, director of PHI’s Health Care for Health Care Workers (HCHCW) initiative. “This is part of a growing national trend that will benefit everyone who needs long-term care services — and the family members who care for them.”

The direct-care workforce in long-term care (nursing assistants, home health aides, personal care attendants, etc.) is one of the fastest-growing in the American economy. Key to keeping up with increased demand is lowering the profession’s alarmingly high turnover rates, and studies show that health insurance helps keep workers in their jobs. Yet approximately two out of every five direct-care workers lack health care coverage.

The Montana effort, called Healthcare for Montanans Who Provide Healthcare, allows employers to offer health insurance to personal care attendants and private duty nurses. The state’s budget for the coming biennium includes an additional $2.6 million to raise payments to employers who participate in Medicaid in-home care. Federal matching funds will bring the total to about $5 million a year. To receive the extra money, employers must agree in writing to spend it on health insurance for their direct-care employees, which must meet a set of quality criteria established by the state. The plan is expect to cover 1,000 currently uninsured workers. The bill was signed into law on June 1.

A separate piece of legislation also passed this year. Senate Bill 206 requires Montana’s Medicaid agencies to look into funding insurance in a similar fashion for nursing homes, developmental disability community service agencies, and other long-term care organizations.

“To me what we are doing here is a great example of how private business and government can and should work closely together to get something done and make a positive difference in people’s lives,” says Bill Woody, president of Consumer Direct Personal Care and Nightingale Nursing. “I am thrilled that the Montana Legislature has recognized the dedication of our employees, the valuable work done by in-home caregivers and the critical role that the ability to offer affordable health insurance plays in enabling businesses such as ours to recruit, hire and retain qualified workers.” Woody’s in-home care agency developed the concept paper that gave birth to the Montana insurance initiative and spearheaded the effort to secure funding from the legislature.

“Montana has taken a significant step towards ensuring the availability of a high-quality long-term care workforce now and in the future,” Woody says. “At the same time, we will all clearly reap positive social and economic benefits because more of our fellow citizens have health insurance.”

Woody, who also owns and operates in-home care agencies in Arizona, Alaska, Nevada, and New Mexico, believes other states should consider replicating or adapting Montana’s approach. “The issues that make this initiative important — the emerging crisis in the long-term care workforce and general lack of affordable health insurance — are not unique to us,” he says. “It seems to me we are all grappling with the same problems and challenges. Why not learn from each other?”

HCHCW is already working with several other states and employers who are finding new ways to cover direct-care workers. For example:

• In Maine, HCHCW is supporting LD 1687, which would make it easier for direct-care workers and their employers to enroll in state-subsidized health insurance.
• In Pennsylvania, HCHCW is supporting Prescription for Pennsylvania, a comprehensive bill that would expand health coverage to low-income families and workers – including many in direct-care – employed by small businesses.
• In Michigan, HCHCW is working with a large nursing home company to make health insurance affordable and accessible for direct-care staff.

“We’re excited about the progress being made in Montana and elsewhere,” says Regan. “We look forward to working with more states as they expand health coverage to the uninsured or restructure their long-term care systems.”