Letter to Governor-Medicaid Reimbursement Lag Hurts Home Care Service Delivery in Missouri
Dear Governor Michael L. Parson:
I am writing you about my concerns regarding the Medicaid reimbursement lag in the area of home care assistance and how it is affecting the availability of these services to Medicaid recipients.
I am going to specifically address the traditional home care agency model, where a non-relative is providing care for a recipient. I am not addressing the Consumer Directed Services (CDS) model, where a relative provides care to a family member.
The lag in Medicaid reimbursement causes the wages offered to caregivers providing services to Medicaid clients to NOT be competitive to other wages (both, in the industry and outside of the industry.) The employment market was very competitive BEFORE pandemic, so this is not based on the pandemic alone.
If wages are not competitive, then availability of quality and reliable caregivers to Medicaid recipients is greatly decreased.
I am the owner and President of StaffLink, a provider that has been servicing Medicaid recipients and non-Medicaid clients for over 34 years. We are based in the St. Louis region. I own an office building in unincorporated St. Louis County (in the Creve Coeur area.) And my clients and employees live throughout St. Louis City, County and in Jefferson and St. Charles counties.
It may surprise you that I have very little concern about the rise of the minimum wage. I said little, I did not say none.
Why do I have little concern? Because caregiving should not be a minimum wage job. If we want to have reliable and well-trained caregivers, in a competitive marketplace, our wages must compete outside of our industry. Our competition of workers is Target, Walmart, Quik Trip and Amazon, to name a few. The minimum wage at these places range between $13-$16 hourly.
Inside of our industry, the Medicaid reimbursement rate lags behind what agencies like mine are billing other reimbursement sources for similar services. We are currently being reimbursed by the state of Missouri for basic in-home services at $18.36 per hour and $16.36 for respite hours, which make up a large portion of the service hours allocated.
We are being reimbursed by the Veterans Administration for similar services at $22.00 hourly. Our reimbursement rate with the Veteran’s Administration has been the same for four (4) years. There is a 20% different between our state reimbursement and the Veteran’s Administration reimbursement.
Agencies across St. Louis are currently being reimbursed $24-$28 per hour by long-term care insurance and private pay clients. Those clients have reliable caregivers.
Genworth, a long-term care insurance, annual “Cost of Care” confirmed the “private” cost care (for a home health aide or caregiver) in the state of Missouri to be $23 per hour. (I have attached a link.) Pre-pandemic 2020, that would have been accurate. Now that hourly rate is low. State-wide that rate has definitely increased by $2-4 per hour over the past year. Cost of Long Term Care by State | Cost of Care Report | Genworth
Using the average Genworth numbers from 2020 for Missouri of $23.00, and the Medicaid reimbursement rate of $18.36 (not taking into account the lower hourly reimbursement rate for respite), Medicaid lags behind private pay and insurance reimbursement at a minimum of twenty-five (25) percent.
Most agencies that service the private pay and LTC insurance companies are currrently be reimbursed $25 to $28 per hour for home care aide services. The lag between private pay reimbursement and Medicaid reimbursement is 45%-48%.
I understand the Missouri Council for Home Care has asked for an 18% increase.
Eighteen (18) percent would increase the hourly rate for Medicaid reimbursement to $21.66, close to the current Veteran’s Administration reimbursement rate of $22.00.
That would be a positive step.
Without an increase of 18%-25%, the Medicaid reimbursement lag will continue. Without an increase in that range, caregiver pay rates will lag. Service providers like myself will continue to experience issues with recruitment, retention and reliability.
I have only addressed the Medicaid reimbursement for home health aide services. I am sure you are aware there is a Medicaid skilled (LPNs & RNs) private duty nurses (PDN) service for pediatric recipients offered via the state and reimbursed by Medicaid, that is severely under fund. My agency is authorized to provide services via that program, but we currently do not have any clients in that program. At least twice a month we receive calls from families dissatisfied with their services and seeking to move to another agency. We turn them down and tell them we cannot help them. The problem is not the other agencies, it is the Medicaid reimbursement rate. I have attached a link regarding the state of Missouri being sued by families frustrated with the service and care offered via this program. https://www.stltoday.com/lifestyles/health-med-fit/health/lawsuit-missouri-fails-severely-disabled-kids/article_a3576d6f-d763-58ad-88eb-f6d26df4baba.html
The Medicaid reimburse lag is a country-wide problem and has been documented by numerous news and media outlets. Several providers across the country and in Missouri have left the Medicaid market. Addus, a national provider of home assistance to Medicaid recipients closed their Nevada operations. There is an article attached about this closure. They recently closed some Missouri offices and stopped accepting Missouri Medicaid clients is some regions. I have attached several links and stories regarding this issue. Please note several of these stories are pre-pandemic. The Medicaid reimbursement lag and issues existed prior to the pandemic. The problem has only increased since the pandemic.
I am requesting that we be given the eighteen (18) percent increase that has been requested by the Missouri Home Care Council so that Medicaid recipients receive improved services in the area of home care assistance.
Thank you for reading my letter and for considering my concerns.
I am available if you would like to chat at 314-997-8833.
Sincerely,
Gretchen Curry, MSPH
President of StaffLink
Coronavirus strains home health care, putting vulnerable at risk (usatoday.com)
‘Home Care Is Coming to a Crisis’: Medicaid Cuts to Push Addus Out of Nevada – Home Health Care News
Home Health Care Agencies Threatened as Wages Rise, Reimbursements Lag – Home Health Care News
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