Using federal pandemic relief money, the Evers administration will initiate a minimum fee schedule that will increase payments to home and community-based long-term care providers serving patients covered by Medicaid. (Getty Images)
The state health department will increase payments for a group of long-term care providers starting in October in a strategy to increase wages and stabilize the caregiving workforce.
For the first time, Wisconsin will institute a minimum fee schedule for providers who care for people covered by Medicaid. The fee structure is supposed to enable providers to raise employees’ wages, cutting the loss of care workers who are leaving the field due to inadequate pay.
“The reality is we have a growing number of people who need care and a shrinking pool of available workers, period,” said Janet Zander, advocacy and public policy coordinator for the Greater Wisconsin Agency on Aging Resources. “These are some of the lowest wages, and some of the most challenging work for those low wages and little or no benefits.”
The policy announced Thursday by Gov. Tony Evers and the state Department of Health Services (DHS) applies to long-term care patients who are enrolled in Medicaid and who receive care at home or through community-based services.
It will be covered by $258 million from Wisconsin’s share of the American Rescue Plan Act (ARPA), the federal pandemic relief program enacted in March 2021.
Under Wisconsin programs that include Family Care, Family Care Partnership, and PACE (Program of All-Inclusive Care for the Elderly), people who need long-term care and who qualify for Medicaid can get care at home or other settings, such as at an assisted living home, instead of in a nursing home.
About 57,000 people are enrolled in those programs, according to DHS. Managed care organizations enroll the clients and then contract with health care providers to give the care that they need.
Evers’ directive Thursday sets a standard minimum fee schedule that managed care organizations must follow in contracting with health provider agencies.
The fee structure would raise payments by 15% for services provided in patients’ homes and up to 40.5% for services provided when patients live in assisted living or other group facilities.
Republican leaders of the Legislature’s Joint Finance Committee pulled a similar plan that Evers had proposed out of the 2023-25 state budget. And in April, they blocked a plan that DHS submitted to create the new fee schedule.
That plan was subject to the committee’s review under the late-2018 so-called “lame duck” law that Republican lawmakers and outgoing Gov. Scott Walker enacted just before Evers took office. The legislation requires the budget committee’s review for any Medicaid reimbursement changes exceeding $7.5 million — regardless of where the money comes from.
Thursday’s announcement from Evers’ office does not describe the ARPA-funded $258 million used to cover the new fee schedule as a change in Medicaid “reimbursement.”
The announcement emphasizes the ARPA money was “already designated for home and community-based services.” A DHS spokesperson reiterated Thursday that the money “is coming through ARPA dollars and not the budget.”
Nevertheless, in announcing the plan Evers said that “it’s going to be critical for these investments to continue in our next biennial budget so we can address chronic challenges and continue building a strong, stable healthcare industry for the future.”
The state calculated the fee schedule based on target wage rates and shared that information with provider groups, Bill Hanna, state Medicaid director, told the Wisconsin Examiner.
The increased payments don’t mandate certain wage levels, something DHS lacks the authority to do. But Hanna said the federal government allows states to tell managed care organizations how much they must pay the providers they contract with.
For workers employed by an agency who provide services in the client’s home, the new rate schedule assumes a wage of $15.75 an hour, Hanna said. DHS used federal wage data to calculate proposed wage rates and built required taxes and assumptions for the cost of health care and retirement benefits into the rate schedule.
“For home health and personal care aides, as of May 2022, the median [wage] was $14 an hour — meaning half of those folks were making less than $14 an hour,” Hanna said. “You can go anywhere in the state, you could work in fast food, or you could work at Kwik Trip and make $17 an hour.”
Providers have told DHS they need to be able to pay higher wages to recruit and retain qualified employees, Hanna said.
“We’ve heard from individual caregivers who’ve said, ‘I want to be in caregiving, but I can’t — I can’t support my family and make a living on $10 or $12 an hour,’” he said. “The way to solve that and get better care for Wisconsin residents is to increase pay for the direct care worker.”
According to Hanna, mounting difficulties providers have had hiring workers have escalated, creating a sense of urgency to adopt the new fee schedule.
“We had to do this now,” he said, “because we are hearing regularly from providers [about] the challenges they’re having with recruiting and the impact that has on them to maintain health and safety.”
Some have talked about the prospect of closing down entirely.
“There’s lots of downstream impacts to the residents, the current employees and the community,” Hanna said. “Bringing up the [wage] floor, we think, is critical to sustaining, really, this industry that cares for some of the most vulnerable people in our state.”
Advocates for the aging and people with disabilities have been wanting the state to institute a fee schedule that would allow for higher payments to providers and better wages for caregivers as a result, said Zander of the Greater Wisconsin Agency on Aging Resources.
She said she believes that the wage hikes supported by the fee schedule might need to be more robust. She is also concerned about the gap between the fee structure’s 15% boost for home care and up to 40% for care in assisted living.
“I don’t want this to pull more workers from the home and community-based side because they can’t compete with the residential side” on wages, Zander said.
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