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Minnesota’s budget gap forced the state government to shut down on July 1.

Governor Mark Dayton (D) is at an impasse with the Republican-controlled legislature over its unwillingness to approve a budget that is adequate to cover state services, as well as its refusal to help close the funding gap by increasing the income tax rates for millionaires.

While state parks, rest stops, licensing, and other services are closed, thousands of low-income elders and people with disabilities with Medicaid — known in Minnesota as Medical Assistance — are still receiving care in nursing homes and veteran homes, the Wall Street Journal reports.

However, according to the Star Tribune, all Minnesotans who depend on long-term services and supports are beginning to feel the pinch.

Hiring on Hold

The state’s background check office is closed and not processing the more than 400 criminal checks that it usually handles each week for nursing homes and assisted living facilities that want to hire new employees.

The two nursing home associations in the state and Gov. Dayton are asking a “master” appointed by the court to reopen the background check office.

Additionally, state inspections and oversight of nursing homes and home care agencies, along with building repairs to state nursing facilities, are all on hold during the shutdown.

Unwilling to concede to Republican demands for no new taxes, Dayton told reporters, “I cannot accept a Minnesota where elderly widows are denied the at-home services that permit them to remain healthy and able to live in their own homes…so that millionaires do not have to pay one more dollar in taxes.”

Dayton refused to sign the $34 billion budget proposed by the legislature. State economists say that $39 billion is needed to maintain current state services, according to the Star Tribune.

– by Deane Beebe

NY Capitol Building in Albany

The New York State Budget for 2011-2012, passed on March 31, includes sweeping legislation that will dramatically alter the way New York pays for and delivers Medicaid services, particularly in home- and community-based settings.

Most of the recommendations of Governor Andrew Cuomo’s Medicaid Redesign Team (MRT), which was charged with identifying the best ways to reduce costs and improve the health delivery system, were incorporated.

PHI has been an active proponent for two key measures that were included in the budget:

• Wage parity for home health aides: Organizations providing Medicaid services in the downstate area — New York City and Westchester, Nassau, and Suffolk counties — are required to compensate their home health aides using the living wage of that geographic area, which will result in an hourly wage increase of $2. As a result, home health aides will earn the same wage as personal care aides.
• Care management models and the integration of services within capitated models of care: Beginning in April 2012, consumers who need more than 120 days of community-based long-term care will transition into care management models. And personal care will be incorporated into the Medicaid managed care benefit once the state gets approval from the federal government.

PHI and Independence Care System Provided Blueprint for Reform

PHI and its affiliated managed long-term care organization, Independence Care System, advocated for the wage improvements for home health aides as well as the greater use of care management models. Both of these provisions were in the blueprint (pdf) they presented to the MRT.

Once implemented, these provisions will increase efficiency and address a long-standing inequity in the pay for home health aides.

“Home health aides have always been underpaid for the difficult, sensitive, and important work they do,” says Assembly Member Richard N. Gottfried.

“At some home health agencies, the under-compensation has been shocking. The living wage provision in the state budget, together with other reforms, will bring more fairness to home health aides, reduce costly turnover that reduces quality, assure more appropriate services, and reasonably contain costs. However, it is important that these reforms be implemented carefully, to avoid disruption and unintended damage to good providers,” Gottfried said.

Living Wage Implementation

In New York City, parity with the personal care aides, who currently earn $10 an hour, would be implemented over a 3-year period. Home health aides will begin the transition to parity starting March 1, 2012.

Although Westchester, Nassau, and Suffolk counties have living wage laws in effect, the home health aides working in these counties will not receive an increase until March 1, 2013. However, aides in these counties may reach 115 percent of total compensation required under the New York City living wage law by March 2016.

Health care benefits and paid time off are determined by the collective bargaining agreement (CBA) in effect on January 1, 2011 or by the terms of the Living Wage law in the county in which care is delivered, if there is no union contract.

“This budget finally corrects an injustice that’s been in place for many years,” says PHI New York Policy Director Carol Rodat. “It’s not only good economic policy given the size of the home care aide workforce, but wage parity ensures continuity of care as it makes it possible for aides to remain with their clients when they transition to care management models.”

PHI Longtime Supporter of Wage Parity

PHI has been a strong advocate of improving jobs for home care workers as a means of reforming the Medicaid system. PHI has published several papers that detail the size, training, and health coverage of the home care workforce, including the inequities in the home health aide wages.

“The United Hospital Fund has long supported analytic work that focuses on the direct-care/home care workforce, beginning with the 1994 report, ‘Better Jobs, Better Care: Building the Home Care Work Force,’ and more recently through the support of three PHI reports on the aide workforce,” says UHF Senior Vice President for Program David Gould.

“We’re pleased that the state’s budget recognizes the importance of this workforce by providing a movement towards parity for the home health aides. This provision promises to encourage continuity of care while creating better jobs, and we applaud PHI for its work in this arena,” Gould added.

– by the PHI New York State Policy Team

Many governors are requesting a repeal of the Affordable Care Act‘s maintenance of effort (MOE) provisions, which prohibit states from making changes in Medicaid and State Children’s Health Insurance Program (CHIP) eligibility requirements until 2014 for adults and 2019 for children.

Consumer advocates across multiple constituencies, however, support the MOE provisions and are mobilizing to keep them in place and to counter other efforts to cut Medicaid services.

At The Consequences of Obamacare: Impact on Medicaid and State Health Care Reform, a hearing held by the House Energy and Commerce Committee on March 1, governors Haley Barbour (R-MS) and Gary Herbert (R-UT) requested that the federal government eliminate the MOE provisions.

In contrast, Governor Deval Patrick (D-MA) highlighted (pdf) the success of his state’s health care reform law, which is similar in many ways to the Affordable Care Act.

Mobilizing to Keep MOE Intact

Dozens of advocates, including PHI, voiced opposition to weakening the MOE provisions in a letter (pdf) to the U.S. House of Representatives.

During economic downturns like the current recession, Medicaid and CHIP play a critical role in maintaining access to health care and long-term services and supports for millions of children, elders, and people with disabilities, the advocates wrote. Although state budget problems are serious and warrant attention, advocates say that reducing access to critical services is the wrong response.

More information about why the MOE provisions are important to elders and people with disabilities has been provided by Families USA (pdf) and the Center for Budget and Policy Priorities (pdf).

Tackling Medicaid State Budget Cuts

Advocates are also working to scale back proposed state budget cuts to Medicaid services.

As many as 350 advocates from 48 states participated in the first of a series of webinars hosted by the Friday Morning Collaborative, a network of aging and disability advocates in which PHI participates, on February 25.

The webinar, State Budgets: Challenges and Opportunities for Home and Community Based Services (registration required), featured presentations by Judy Solomon, Center on Budget and Policy Priorities; Wendy Fox-Grage, AARP Public Policy Institute; Jerry Reilly, Eldercare Alliance–Washington State; and Diane Justice, National Academy for State Health Policy.

The Friday Morning Collaborative, which is led by the National Council on Aging and funded by The SCAN Foundation, just launched an online community to share resources (registration required). Medicaid cuts are a serious concern for aging and disability advocates and providers, especially as waiting lists for Medicaid home and community based long-term services and supports grow.

– by Gail MacInnes, PHI National Policy Analyst

Mayor Bloomberg speaking at the forum

New York City Mayor Michael Bloomberg was the guest speaker at a forum on the challenges facing the home care workforce and the opportunities for statewide system reform in the coming year.

The event was sponsored by PHI, 1199SEIU Training and Employment Funds, and 1199SEIU United Healthcare Workers East and held in New York City on December 6.

The Mayor and the forum panelists concurred that in light of the impending Medicaid cuts to home- and community-based services (HCBS), all of the stakeholders must work together to ensure that there are no broad across-the-board cuts, which has been the solution to the state’s budget woes in past years.

Budget Gap Is an Opportunity

Instead, all of the speakers — representatives from labor, government, consumer advocacy organizations, and a home care agency — view the anticipated cuts as an opportunity to reform the state’s HCBS system to become more:

• cost-effective
• simplified
• coordinated
• transparent
• accountable, and
• able to deliver services with a stable, well-trained direct-care workforce.

Bloomberg referred to the current management of the state’s HCBS system as “uneven at best.”

PHI President Steven Dawson

In referencing the state and city budget gap, he repeated the phrase made famous by President Obama’s former chief of staff, Rahm Emanuel, “a crisis is too important to waste.”

High Turnover Is Costly

The mayor addressed how the state’s home care industry was plagued by a 25 to 50 percent turnover rate, which “disrupts the continuity of care and raises administrative and overhead costs.”

“No one can run a railroad with that kind of turnover,” Bloomberg said. He added that “for the best well-trained workforce possible, the workers need to be compensated enough and feel like they are making a difference, to stay on the job a long time.”

Bloomberg’s Recommendations

Mayor Bloomberg said that the following elements are necessary for HCBS reform:

• capture better data
• develop and use a standardized client assessment tool
• mandate cost-effective incentives for subcontractors
• direct clients to programs that best meet their needs and are cost-effective
• reduce turnover by providing home care staff with better wages and benefits, training, and career ladder incentives

Investment in a Stable, Well-Trained Workforce

1199SEIU President George Gresham

“Across-the-board Medicaid cuts, without structural reform, would be the worst-case scenario for home care consumers, workers, and providers,” said PHI President Steven Dawson, a forum panelist whose presentation (PowerPoint file) is available for download.

“But true reform requires investment in a stable, well-trained workforce — and that will require new payment policies that reward ‘high road’ providers who demonstrate that they are creating decent jobs and providing quality care,” Dawson said.

In November, PHI and the Independence Care System issued a reform blueprint (pdf) for New York’s home- and community-based service system.

Forum Panel

Other panelists at the event included:

• George Gresham, president, 1199SEIU
• Aida Garcia, executive VP, 1199SEIU
• Kevin Finnegan, director, politics & legislation, 1199SEIU
• Dan Koken, director of business development, NYC Business Solutions, NYC Department of Small Business Services
• Judy Duhl, vice president for government affairs, Visiting Nurse Service of New York, and
• Jed Levine, executive vice president, Alzheimer’s Association, New York Chapter.

New York’s Home Care Workforce

At the forum, PHI released three reports that provide an in-depth look at New York State’s home care workforce, and an executive summary (pdf) with the challenges and recommendations outlined in these reports.

More information about home care in New York is available in the PHI Fact Sheet (pdf) on New York City’s Home Care Workforce.

– by Deane Beebe

A policy brief about proposals to close California’s $20 billion budget gap cautions that “all options for closing the budget gap are not equal.” Read the full story

In July PHI surveyed the spate of state budget troubles that was then wreaking havoc with human services spending around the nation. A month later, the situation has not improved. The Center on Budget and Policy Priorities updated its report on the state budget crisis on August 12, and ended the report’s first paragraph with this sobering declaration:

Most states have adopted budgets that closed the shortfalls they faced with a combination of federal stimulus dollars, service reductions, revenue increases, and funds from reserves. But these budgets are already falling out of balance as the economy has caused state revenues to decline even more than projected. States will continue to struggle to find the revenue needed to support critical public services for a number of years (“New Fiscal Year Brings No Relief from Unprecedented State Budget Problems“). Read the full story