Home HEALTH New federal rule to boost pay for home health workers

New federal rule to boost pay for home health workers


The Home Care Association of America has criticized the new rule, with CEO Jason R. Lee warning that it will have “swift and severe negative impacts on patient access nationally.”

In a letter to federal lawmakers, Lee stated, “The final rule dictates how agencies may use current Medicaid funding without addressing the underlying workforce problem: the inadequacy of the rates themselves. These rates are far too low, leaving providers no leeway to continually invest and innovate.”

State Rep. Donny Lambeth (R-Winston-Salem), co-chair of the Joint Legislative Oversight Committee on Medicaid, expressed similar concerns.

“Generally, Medicaid is a federal program primarily funded by the federal government and operated by the states,” Lambeth wrote in an email to NC Health News. “Federal mandates on Medicaid operations are common. Sometimes these directives improve care, but at other times they are more of an administrative hindrance and could cost more.”

Lambeth believes the new policy falls into the latter category, fearing it will lead to “providers losing money and ultimately closing.”

“The 80 percent rule seems positive on the surface, but it may actually cause some providers to go out of business or stop serving government patients,” he said. “I would have preferred a pilot program to evaluate if this accomplishes the intended goal before expanding it to all patients.”

His stance aligns with that of congressional Republicans, who criticized the policy during a legislative hearing on Tuesday.

“With the shortage of personnel, the goal seems reasonable, but it could easily negatively impact patients and providers,” Lambeth said.

Advocates React

The National Domestic Workers Alliance, advocating for the rights of low-income laborers, praised the policy.

“This measure not only improves the livelihoods of care workers but also enhances the quality of care for over seven million aging adults and people with disabilities, ensuring they receive the support they need in their communities,” stated Chanelle “C.C.” Croxton, director of state strategies and organizing for the alliance. “Furthermore, the rule introduces mechanisms for transparency and adequacy of payment rates, including data collection and the formation of an advisory group comprising direct care workers. These steps aim to bolster the home care services sector, stabilize the workforce, and ensure continuous, high-quality care for those in need.”

Erin Carson, director of the alliance’s North Carolina chapter, rejected the notion that the rule would cause providers to close or leave the Medicaid program. She argued that if a business can’t afford to pay its workers, it “can’t afford to be in business.”

“If there’s not enough money in the system for people to afford this 80/20 split, ensuring workers are paid fairly, that’s a larger issue of needing more investment in the industry overall,” Carson said in an interview. “We should all work together to ensure there is enough money in care, rather than fighting over a percentage split.”

Carson acknowledged that some home health companies value paying their employees a livable wage, but many do not.

“There are coalition partners that want to address workforce issues and support workers, ensuring they are paid well and have what they need,” she said. “But that is not the industry standard. Worker surveys and state health department data confirm this.”

“You don’t make laws for those doing their best; you make laws for those doing the bare minimum to ensure everyone meets some standards,” she added.

Anna Pardo, co-director of the Workers’ Rights Project at the North Carolina Justice Center, believes the potential negative effects of the rule have been exaggerated.

She recalled advocating for an increase in the state’s Medicaid reimbursement rate for home health services years ago. Industry leaders supported the increase, claiming it was necessary to properly compensate workers and reduce turnover.

The rate hike was approved, but low wages and high turnover persisted. If anything, Pardo said, the “home health crisis is probably worse now than it was before.”

“I find it deeply ironic that the same providers who claimed they would close without an increased Medicaid reimbursement rate are now saying they will close if required to prove they are providing benefits and wages to employees,” she said. “It just doesn’t add up.”