April 21, 2023
FOR IMMEDIATE RELEASE
Contact: Kathy Febraio, President/CEO
518-463-1118 ext. 809
Paying Insurance Companies Big Money Doesn’t Help Pay for Workers
It’s a study in contrast. While nursing homes receive state funds directly from the state to pay their workers, state dollars for home care go to insurance companies that simply pocket the funds, leaving home care agencies to foot the bill for care that the state intended to pay for.
While nursing homes are beginning to see their first payouts from a $187 million funding pool that was included in last year’s state budget, home care agencies are seeing just pennies on the dollars allocated by the state to pay for home care worker wages. The contrast lies in how the state money is dispersed. Nursing homes are receiving this funding directly from the state. Home care dollars are sent first to insurance companies with no guarantee of reaching provider agencies.
“It’s a completely unsustainable model,” said Kathy Febraio, President and CEO of the New York State Association of Health Care Providers, a statewide trade association representing the full spectrum of home and community-based care providers. “Home care agencies have been underfunded for more than a decade, and unfunded minimum wage increases, while well-intentioned, have come at a very steep cost for employers.”
When the state passed minimum wage increases for homecare workers in that very same budget, the dollars were appropriated to the Managed Long Term Care insurance plans (MLTC) that manage the care of the state’s Medicaid beneficiaries. The law did not include language directing how the money would get from these plans to the agencies that employ, train, and oversee home care workers. As a result, home care agencies around the state have been footing the bill for wage increases without any equitable reimbursement from the MLTCs. While those plans posted $722 million in profit in 2021, a survey of home care provider agencies shows 43% of them are staying afloat on loans and credit.
An April 18 investigative report from WHEC in Rochester summed it up succinctly: NYS gave home care aides a raise but insurance companies kept most of it.
Home care agencies contract with MLTCs to get reimbursed for the care their workers provide to New Yorkers who want to age in their homes and communities but who need help to do so, like someone to help them bathe and prepare healthy meals. These skilled and compassionate workers are in short supply right now, as home care agencies struggle to provide competitive wages to attract and retain the workers they need. With these agencies borrowing money to make payroll and keep their doors open, industry sustainability is questionable.
“Home care agencies are already making tough decisions about which cases they can take and how many people they can hire, knowing they will lose money on every hour of home care they provide,” said Febraio. “Relief cannot come soon enough. Every day our members and the workers they employ provide high-quality care, but they cannot continue to do so when their costs are greater than what the insurance companies pay them.”
As lawmakers argue about raising wages and indexing them to inflation, they must first fix the funding mechanism to support the wage increase already in place in the home care sector. Champions in both the Senate and Assembly have embraced both Fair Pay for Home Care and the Fair Pay Accountability Act which will raise wages AND ensure that funds flow to home care agencies. Absent action by the legislature and Governor Hochul, taxpayer money intended to support elders and disabled people in their homes will instead continue to enrich insurance companies. These Fair Pay measures must be adopted in the state budget, providing the path forward by getting the money where it’s needed and adding accountability, predictability, and transparency to a home care system that is failing its agencies, its workers, and the consumers who rely on it.
About New York State Association of Health Care Providers
The New York State Association of Health Care Providers, Inc. (HCP) is a statewide trade association representing the full spectrum of home and community-based care providers through information, advocacy, and education. HCP represents licensed home care services agencies, certified home health agencies, hospices, fiscal intermediaries, and related health organizations. Through a strong network of regional chapters and an active State office in Albany, HCP is a primary authority of the home health care industry. For more information, please visit www.nyshcp.org.
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