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A New Year and We Will “Ring In” Even Lower PCS Reimbursement Rates: Time for Litigation?

Merry Christmas, everyone!!! And Happy New Year!!

I hope everyone had a wonderful holiday! Personally, Christmas was wonderful for my family.  I actually took some days off.  And our 9-year-old girl received way too many presents.  Plus, I learned that we should be spending way less on her!! We bought her a new saddle, bridle and breast-strap for her horse, but, when asked what she received for Christmas, she tells everyone about the $2 marshmallow gun she received, not the saddle. Regardless, we were able to spend quality time together with my mom and dad and 2 sisters.  My husband Scott, however, got the flu and he has been in bed for the last few days…yuck! But he was healthy on Christmas.

We have been truly blessed this year, and I want to thank you all for reading my blog.

I received an email today from an owner of a home care agency that reminded me that, especially during the holidays, many people are struggling.  This home care agency owner, “we will call him Al,” informed me that he potentially will be closing his agency, which would put approximately 130 employees out of work. Al told me that his agency has been struggling over the past few years with the decrease in personal care services (PCS) reimbursement rate.

Al is not the only home care agency owner who has contacted me in the last few months bemoaning about the low PCS reimbursement rates.  The PCS reimbursement rates are set by legislature, most of the time in the budget bills.  For example, the General Assembly passed the budget this past year, which will decrease the PCS reimbursement rates by another 3% beginning January 1, 2015. (Happy New Years).

See below, which is from another blog post: “PCS Medicaid Reimbursement Rates Are TOO LOW to Maintain Adequate Quality of Care, in Violation of the Code of Federal Regulations!

“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.”

What can be done regarding these low PCS reimbursement rates in NC???

In order to change legislation, one of two avenues exist: (1) lobbying; or (2) litigation.

Over the past few years, while the PCS reimbursement rates have continued to decrease, the associations involved with home care organizations and long term care facilities (companies that provide PCS) have emphasized the lobbying aspect.  No litigation has been filed demanding a reasonable PCS reimbursement rate.

Obviously, the lobbying aspect has yielded less than desirable results.  Instead of increasing the PCS reimbursement rate, the General Assembly has continually decreased the rate.

When one line of attack does not work, you try another.

Maybe it is time for litigation.

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:

PCS across country 1

PCS country 2

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?

Conclusion

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 (Recent) History of PCS Rates and Why There Is Parity of Rates Between Home Health and Long Term Care Facilities

Think of this blog as a history lesson…

As I was preparing my Power Point for speaking at the NC Association of Long Term Care Facilities (NCALTCF), I ran across a number of interesting issues on which I could blog. If you are attending the annual NCALTCF conference September 8-10, this will be a prelude to a portion of my presentation. I will be speaking on September 8th.

I am reviewing the history of personal care services (PCS) rates, and I realize that a few years ago, the parity of PCS rates for home health care providers and long-term care facilities (LTCF) occurred. The issue? Why the parity? I am curious. I remember vividly the parity change in 2012. But, I wonder, why did it occur?

Home health care companies provide PCS to people within their own homes (obviously a much-needed and growing service). Long term care facilities (LTCF) provide PCS within a facility.

But LTCFs have higher overhead due to mortgage/rent, 24-hour staff, monthly bills, more regulatory compliance issues, a cafeteria or kitchen, etc. Whereas, a home health care company does not incur these expenses. Why NOT pay LTCF a higher PCS reimbursement rate?

The answer is…we did, in North Carolina. And the federal government found that we violated the Americans with Disabilities Act (ADA).

Here is the percentage breakdown of people receiving home health, assisted living, nursing homes, hospice, and day service centers, on a national basis in 2013, according to the Centers for Disease Control (CDC).

LTCF pie chart

 

Notice the green, home health section. Home health has grown at a very rapid rate since 2000. But assisted living (blue) is still predominant.

Back before 2010 and in an attempt to help adult care homes that provide assistance with dementia patients, the General Assembly provided an enhanced Medicaid rate for those facilities.

For decades, the Centers for Medicare and Medicaid (CMS) warned us that the ADA requires that Medicaid reimbursements apply equally to all, including those living in institutional facilities and those who live with family. CMS informed us that we were in violation of Olmstead v. L.C., a Supreme Court decision decided in 1999. In Olmstead, the Supreme Court decided mental illness is a form of disability and that institutional isolation of a person with a disability is a form of discrimination under Title II of the ADA. See Olmstead v. L.C., 527 U.S. 581 (1999) (Remember the Prince song?)

In 2010, Disability Rights filed a complaint with the federal government complaining about NC’s disparate PCS rates between LTCF and home health. In 2011, the US Department of Justice investigated and agreed with Disability Rights. NC was violating Olmstead by providing two different reimbursement rates.

The General Assembly (GA) tackled the issue in 2012. The GA decreased the LTCF’s enhanced PCS rate to the home health’s rate in order to comply with federal law. Although there was a limit as to the number of hours of PCS per month, the GA wrote in an extra 50 hours per month for people suffering from dementia.

Disability Rights originally made the 2010 complaint to the federal government with honest, well-meaning intentions. Disability Rights wanted better care for the mentally ill. And Olmstead had wonderful results for the mentally ill. Now people suffering from mental illness can remain in their homes, if desired (although sometimes a legal battle is required).

But the unknown, unintentional consequence of Olmstead for the owners of LTCFs is that the PCS rate became paired with the home health PCS rate, which keeps declining. For example, prior to October 1, 2013, the PCS rate was $15.52 (now it is $13.88).

The federal minimal wage is $7.25. People who are paid minimum wage, generally, are not licensed professionals.

Most members of a LTCF staff are licensed. Many are certified nurse assistants (CNAs). Most are required to attend yearly continuing education classes. Should these CNAs and licensed professionals make only $6.00 more than minimum wage? Are not professional licensees worth more?

Not to mention…let’s talk about what LTCF staff actually does on a day-to-day basis. My Grandma Carson resides in a LTCF. Thankfully, she still lives in her own independent living house on the LTCF grounds because she can maintain her independent living, but many residents of LTCF cannot. LTCF staff assists in activities of daily living (ADLs), such as toileting, eating, ambulating, and grooming. When my great-grandmother could no longer feed herself, the wonderful staff at Glenaire in Cary, NC fed her. Should a person feeding an elderly person (and bathing and helping go to the bathroom) NOT be paid well-over minimum wage?

Well…the reimbursement rate may be $13.88 (a tad over $6.00 above minimum wage), but a PCS worker for a home health agency AND a LTCF does not earn $13.88/hour, they earn less. Companies are created to earn a profit. There is nothing wrong with earning a profit.

In fact, starting January 1, 2014, PCS workers in home health are now eligible for minimum wage. “ARE NOW ELIGIBLE.” As in, last year, PCS workers could have earned LESS than minimal wage.

In the future, I hope that health care providers who provide PCS services are paid more; I also hope that, in the future, the PCS rate increases. Someday, I will be the recipient of a PCS worker.