ANALYSIS: PHI Evaluates LTC Provisions in Cuomo’s Proposed NY Budget

The Executive Budget put forward by New York Governor Andrew Cuomo (D) includes several proposals (pdf) that will strengthen the home care workforce. Were it to pass, Cuomo’s proposal to increase the state minimum wage — bringing it to $11.50 in New York City and $10.50 in the rest of the state beginning in December 2016 — would raise the base hourly rate for home care workers in New York City and other parts of the state as well. 

In addition, implementation of the Basic Health Plan, which would cover New Yorkers with incomes between 138 and 200 percent of the poverty level, would help to provide health coverage for more aides, providing a significant increase in compensation.

The proposed budget also includes authorization for an Advanced Home Health Aide occupational title, which would create a pathway to advancement for home health aides. Increased compensation for home care aides and viable career paths are both long-time PHI goals. We applaud these proposals but have concerns about the financing of health care.

The Executive Budget, however, would make the Medicaid Global Cap permanent. We not only oppose this proposal, but find that rate and payment lags are already compromising job quality improvements that were a part of the original agreement that put the cap in place. To date, for example, employers have not been paid sufficient amounts to fully implement wage parity in New York City. Wage parity is essential to the successful implementation of New York’s Medicaid redesign.

Unfortunately, there is a backlog of rate packages and requests for approvals at the Centers for Medicare & Medicaid Services. These delays roll forward from one year to the next, forcing more initiatives to compete for payment under the global cap. There will not be sufficient funds to meet all these commitments. Moreover, managed care rates often receive “efficiency” adjustments or have a percentage taken to create funding pools for specific purposes (e.g., wage parity, quality incentives). The “squeeze” on plans and their providers (who are also employers) is causing cash flow problems as well as closures.

While the state desires consolidation, assuming it will lead to less competition and lower overhead costs as volume is spread across fewer providers, consolidation will not free up adequate funds to meet future needs. The rates paid to the managed care plans are averages based on historic cost data, making it extremely unlikely that there is sufficient margin to pay for innovation, infrastructure improvements, or expanded training of home care aides.

PHI has grave concerns that the payment issues are compromising the training and supports needed by the home care workforce and leave no surplus with which to expand the capabilities and participation of the workforce in care management, much less pay for additional wage increases and rewards for advancement.

— by Carol Rodat, PHI New York Policy Director