PCS Medicaid Reimbursement Rates Are TOO LOW to Maintain Adequate Quality of Care, in Violation of the Code of Federal Regulations!
I recently spoke at the Association for Hospice and Home Care (AHHC) and the NC Association for Long Term Care Facilities (NCLTCF) conferences. At issue at both conferences was the reimbursement rate for personal care services (PCS), which is extremely important to both home health agencies (HHAs) and long-term care facilities (LTCFs).
Both AHHC and NCLTCF, as associations, are vital to the HHAs and LTCFs across the state. Associations provide a network of peers, up-to-date information, and lobbying efforts. The old saying, “United we stand, divided we fall,” comes to mind.
The saying, “United we stand, divided we fall,” was originally coined by Aesop, one of my favorite storytellers of all time, in the story “The Four Oxen and the Lion,” which goes like this:
“A lion used to prowl about a field in which four oxen used to dwell. Many a time he tried to attack them; but whenever he came near they turned their tails to one another, so that whichever way he approached them he was met by the horns of one of them. At last, however, they fell a-quarrelling among themselves, and each went off to pasture alone in a separate corner of the field. Then the lion attacked them one by one and soon made an end of all four.”
“UNITED WE STAND, DIVIDED WE FALL.”
I think “The Four Oxen and the Lion” is indicative as to the importance of an association, generally. An association is truly essential when it comes to lobbying. There are two times during which we have a potential impact as to the wording of statutes: (1) During the forefront, by lobbying efforts; and (2) At the backend, through litigation. Obviously, if the forefront is successful, then there becomes no need for the backend.
Much to my chagrin, in my explanation above, I am the “backend.” Hmmmm.
Because I am a litigator and not a lobbyist, I am only called upon if the forefront fails.
In the last session, the General Assembly enacted Session Law 2014-100, which reduced the Medicaid reimbursement rates for all services by 3%.
“SECTION 12H.18.(b). During the 2013-2015 fiscal biennium, the Department of Health and Human Services shall withhold reduce by three percent (3%) of the payments … on or after January 1, 2014” (emphasis added).”
The PCS reimbursement rate became $13.88. Session Law 2014-100 was signed into law August 7, 2014; however, Session Law 2014-100 purports to be effective retroactively as of October 2013. (This brings into question these possible recoupments for services already rendered, which, in my opinion, would violate federal and state law, but such possible violations (or probable or currently occurring violations are a topic for another blog).
It is without question that the Medicaid reimbursement rate for PCS is too low. In NC, the PCS reimbursement rate is currently set at $13.88/hour (or $3.47/15 minutes). It is also without question that there is a direct correlation between reimbursement rates and quality of care.
Because Medicaid pays for approximately 67% of all nursing home residents and recipients of home health care in USA, the Medicaid reimbursement rates and methods are central to understanding the quality of care received by PCS services and the level of staffing criteria expected.
PCS for adults are not a required Medicaid service. As in, a state may opt to provide PCS services or not. As of 2012, 31 states/provinces provided PCS services for adults and 25 did not. Most notably, Florida, Virginia, and South Carolina did not provide PCS services for adults. See Kaiser Family Foundation website.
According to Kaiser Family Foundation, “For the personal care services state plan option, the average rate paid to provider agencies [across the nation] was $18.19 per hour in 2012, a slight increase from $17.91 per hour in 2011. In states where personal care services providers were paid directly by the state or where reimbursement rates were determined by the state, the average reimbursement rate was $16.31 per hour in 2012. Medicaid provider reimbursement rates are often set by state legislatures as part of the budget process.”
See the below chart for a state by state comparison:
Why should we care about the Medicaid PCS reimbursement rates?
1. Low reimbursement rates directly, and negatively, impact quality of care.
2. The aides who provide the PCS services, whether in someone’s home or at a LTCF, are often, him or herself on Medicaid.
3. It is in our best interest as a public for home health care agencies and LTCF to continue to accept Medicaid recipients.
4. It is in our best interest as a public for home health agencies and LTCF to stay in business.
#1: Low reimbursement rates directly, and negatively, impact quality of care.
42 U.S.C.A §1396a requires that a state provide Medicaid reimbursement rates at a level to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population…”
In an article entitled “Nurse Staffing Levels and Medicaid Reimbursement Rates in Nursing Facilities,” written by Charlene Harrington, James H Swan, and Helen Carrillo, the authors found that the Medicaid nursing home reimbursement rates were linked to quality of care, as to both RN hours and total nursing hours.
“Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.”
Numerous other articles have been published in the last few years that cite the direct correlation between reimbursement rates and quality of care.
The argument can be made that $13.88 is too low a reimbursement rate to ensure adequate quality of care. However, again, because this rate was not prevented at the forefront, it would entail a “backend” act of litigation to adjust the current reimbursement rate. (It is important to note that beginning next year, there will be an additional reduction of rate by another 1%).
#2: The aides who provide the PCS services, whether in someone’s home or at a LTCF, is often, him or herself on Medicaid.
According to the Paraprofessional Healthcare Institute, an advocacy group for home care workers, 1 in 4 home health workers has a household income below the federal poverty line and more than 1 in 3 do not have health insurance.
Think about this…home care workers provide PCS to the elderly, disabled, and needy, many of which are on Medicaid and Medicare. Home care workers work full-time changing diapers, assisting with ambulation, dressing, and grooming for the elderly, yet 1 in 4 home care workers are eligible for Medicaid themselves.
Currently, federal minimum wage is $7.25/hour. 18 states have minimum wage equal to the federal minimum wage, including North Carolina. 23 states set minimum wage higher than the federal level. Washington D.C. pays the highest minimum wage at $9.50/hour.
PCS reimbursement rates in NC are $3.47/15 minutes, or $13.88/hour. $13.88 is above the federal and NC minimum wage of $7.25. However, just because the PCS reimbursement rate is $13.88/hour does not mean that the PCS workers are receiving $13.88/hour. The owners of HHAs and LTCFs pay their workers much less than $13.88/hour; they have overhead, insurance, taxes, salaries, etc. to pay…not to mention a percentage of the $13.88/hour needs to be allocated to profit (albeit, however, small).
According to the Bureau of Labor Statistics, in 2013, the average PCS worker’s salary in NC is $19,392/year, or $1,660/month. Working 40 hours a week, a salary of $17,280 equates to approximately $10.10/hour. Obviously, $10.10 is well-above our $7.25 minimum wage, although difficult to make ends meet.
The average fast food worker’s hourly wage is $7.73.
In order for an increase of hourly pay, of any amount, for home health workers, the Medicaid PCS reimbursement rate would need to be increased.
With the current PCS rate at $13.88/hour, home health workers are getting paid between $8.00-11.00/hour. In order for PCS workers to receive $15.00/hour, the PCS rate would need to be increased by $2.00-5.00/hour.
#3: It is in our best interest as a public for HHAs and LTCFs to continue to accept Medicaid recipients.
What if HHA and LTCF refused to accept Medicaid recipients because the reimbursement rates are simply too low?
With the number of people dependent on Medicaid, if HHAs and LTCFs refused Medicaid recipients, our elderly and disabled would suffer.
Perhaps the average length of life would decrease. Perhaps we would implement legal euthanasia. Perhaps the suicide rate would increase. Perhaps the homelessness percentage would reach an all-time high. Is this the world in which you want to live?? Is this the world in which you want to age??
In my opinion, the way we treat our elderly, disabled and needy population is a direct reflection on the level of civilization or educated sophistication.
Here is an excerpt of an article published in 2013 when China passed its new Elderly Rights Law:
“Korea: Celebrating old age
Not only do Koreans respect the elderly, but they also celebrate them. For Koreans, the 60th and 70th birthdays are prominent life events, which are commemorated with large-scale family parties and feasts. As in Chinese culture, the universal expectation in Korea is that roles reverse once parents age, and that it is an adult child’s duty — and an honorable one at that — to care for his or her parents.
The U.S. and U.K.: Protestantism at play
Western cultures tend to be youth-centric, emphasizing attributes like individualism and independence. This relates back to the Protestant work ethic, which ties an individual’s value to his or her ability to work — something that diminishes in old age. Anthropologist Jared Diamond, who has studied the treatment of the elderly across cultures, has said the geriatric in countries like the U.K. and U.S. live “lonely lives separated from their children and lifelong friends.” As their health deteriorates, the elderly in these cultures often move to retirement communities, assisted living facilities, and nursing homes.”
#4: It is in our best interest as a public for HHAs and LTCFs to stay in business.
Or we can become more like the Koreans. At least, in this one respect, would emulating the Korean attitude be so bad?
Obviously, we cannot shift the American attitude toward the elderly, disabled and needy within one generation.
But we CAN increase the PCS reimbursement rate.
Here, the forefront was not as effective as needed. Maybe there is a need for a “backend” act of litigation…
The unknown. No one likes the unknown. Especially people, like me, who try so desperately to maintain control over our lives.
But the future of Medicaid in North Carolina is unknown. We have all heard Governor McCrory talk about expanding managed care to all Medicaid services, not just behavioral health care, but for all medical services. Here in NC, our experience with managed care organizations (MCOs) has not been all sunshine and roses. So, when we hear…let’s expand the MCO system to all Medicaid services, I am reminded of the feeling I had this past Saturday as I stood on the side of the Wells Fargo building, 30-stories up, facing background, with a harness and a helmet on, when the rappel guy said, “Ok…now lean back and let go…”
OK….so is anyone wondering how I managed rappelling down the 30-story Wells Fargo building downtown Raleigh this past Saturday in the name of Special Olympics North Carolina?
Answer: I DID NOT MANAGE WELL!!!
I do not kid you when I say that I thought that I would enjoy rappelling. I envisioned myself bouncing off the side of the building, laughing, and doing straddle jumps. I envisioned myself getting to the bottom with an adrenaline rush and an immediate need to sign-up for next year’s Over The Edge charity event.
So, what actually happened? Picture this:
I am standing on the edge of a 30-story building. I have 20 pounds of equipment attached all around my body. I am donning a helmet and gloves. I have never seen any of the equipment that is wrapped around my body. The pro-rappellers are saying things like “rigger,” “descenders,” and “carabiners.” They are obviously all hard-core, banging rapellers, which I, most certainly, am not.
In order to get on the ledge of the building, you have to climb up onto the ledge…as in, take your 2 arms and hoist your body up onto the ledge…sit down on your bum with your back to the 30-story view…and, then, completely stand up…. on a ledge… in order to lean back and jump off the building.
If you can envision preparing yourself for a jump off a 30-story building without your heart racing, then you are way cooler than I.
Ever heard the saying, “The first step is the hardest?” Whoever said that had, obviously, rappelled off the Wells Fargo building. Just prior to actually going over the edge, not only did my body have to battle the physical issues (shaking, breathing, and sweating), but my brain kicked into high gear. I wanted to cry. I cussed at the nice rappellers trying to comfort me. My brain told me to give up and descend as we are meant to…via elevators.
The rappeller-volunteer said, “Lean back and let go!”
I cussed. I screamed, “Get me off this building!!” to the nice rappeller-volunteers. But, eventually (and, definitely, NOT gracefully) I started the descent down the building. The entire way down, which, by the way, takes at least 15 minutes, I panicked; I hyperventilated; I prayed; I cussed; I tried to not spin; I made a very weak attempt of actually using the lever attached to my rope to make myself go down (No, I do not know the term for the apparatus); my muscles failed me….for 15 minutes.
Why?? Fear of the unknown. I was in a completely new situation, and one in which I had no control.
Similarly, the unknowns of the future of Medicaid terrify providers, recipients, and advocates alike. “Just lean back and let go!”
I am currently at the Association for Home and Hospice Care of North Carolina (AHHC) Leadership Convention in Wrightsville Beach. (Which, BTW, is a great association). The morning speaker, Scott Carbonara was fantastic. He spoke about engaging fully in life, work, and family.
During lunch, I ended up sitting next to another attorney (unbeknownst to me at the time of sitting), who works for the National Council on Medicaid.
Another person who wants to talk about Medicaid sitting next to me during lunch? I felt like I drew the lucky straw.
Then she said that she helps implement managed care throughout the country. She may as well have said that she teaches medical providers to refuse Medicaid and provide horrible services to Medicaid recipients.
You have to understand, if you have read my blogs, my opinion as to MCOs and mental health.
She must’ve read my horror on my face. She said…”Oh, I know. Most people do not have positive reactions when I explain my job.”
Me? I felt like I was standing on edge of the ledge with an unknown rappeller telling me to, “Lean back and let go!” Trust me…
We proceeded to have a rather lengthy conversation. I explained the effects of the MCOs on Medicaid recipients and behavioral health care providers here in NC.
I explained to her that some MCOs are denying medically necessary assertive community treatment team services (ACTT) (a highly intense, 24-hour/day service for the most severely mentally ill) even when the recipients meet the continued stay criteria and do not meet discharge criteria. I explained that the recipients who were undergoing discharge from ACTT were becoming hospitalized, incarcerated, homeless, and sometimes all of the above.
She was horrified.
“Why would the MCOs deny ACTT services if discharge criteria is not met?” She said. “It ends up costing more money, with the hospitalizations and incarcerations, than it would cost if the MCO actually authorized the mental health care needed.” In other words, providing medically necessary services saves money, if you look at the totality of circumstances.
“Where is CMS?”
You win a prize! Ding! Ding! Ding!
I explained that our management of Medicaid services is bifurcated. The MCOs are only in charge of behavioral health, not the total patient care. The monetary incentive for the MCOs in NC is to provide the least expensive services to the least amount of Medicaid recipients through the least amount of Medicaid providers.
She said, “Well, the providers can choose to deal with the MCOs, right?”
Not in NC. As the MCOs are jurisdictional, if the MCO in one county says that you cannot see your patients, another MCO in a different MCO may say otherwise.
She explained that her MCOs work completely differently. (Here I was on the edge of the Wells Fargo building again). We are just supposed to trust that other MCOs would act differently?
Then she told me why her MCOs would not act like our current MCOs.
In her MCO world, the MCOs manage ALL Medicaid services. If a recipient suffers high blood pressure, diabetes, and schizophrenia, the MCO handles all the recipients’ medical issues. That MCO is in charge of the totality of the recipient’s care. If the MCO denies ACTT services and the recipient is hospitalized, then the MCO has the burden of paying for that more expensive ER visit. If the MCO denies ACTT services and the recipient is incarcerated without the proper care and medication, then that MCO has the burden of paying for all crisis care for the recipient that may occur from not receiving necessary services. It costs less to provide proper care rather than let the recipient decompress and pay higher emergency costs.
She wanted to get a representative of one her MCOs to listen to my horror stories. She tried to convince me that the MCOs she has worked with would approve all necessary services. It’s just cheaper in the long run.
But, to me, there is fear of the unknown.
What if the MCOs she has worked with do NOT authorize services like she is describing??
How do we know that a new system would be better? I mean, we’ve all seen how great the new billing system NCTracks is…New is not always better. Change is unknown, and the unknown is scary.
I guess we all have to ask ourselves: Is the current NC MCO system bad enough to warrant a change to the unknown?
When you are standing on top the 30-story building, and are told to “Lean back and let go…”
Or do you take the elevators?