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Push to Protect Payments for Personal Care Assistants

Bipartisan group of legislators works to set minimum hourly rate as insurance company announces plan to cut what it pays for home care services

Home care

New Jersey lawmakers are once again pushing to protect payment rates for home care assistance to seniors and disabled residents after an insurance company announced recently that it plans to cut back on the rate it pays for these services.

A bipartisan group of state Senators reiterated the need for the legislation, which would set a minimum hourly rate insurance companies would be required to pay agencies that dispatch personal care assistants to help patients covered by Medicaid managed care. They said efforts to reduce these payments are part of a troubling trend that will harm an already unstable industry and endanger the vulnerable patients it serves.

Amerigroup, which represents roughly 15 percent of these patients, informed state officials earlier this year that it would reduce its payment rate for personal care assistants in July. In its April 1 letter, the company said the cut was the result of increased costs for this type of care and ongoing calls for “medical efficiencies” within managed care; the company said the change would not necessarily impact patient care or the industry’s future and pledged to work with the agencies involved to minimize disruptions. (The company has declined to offer specifics on the proposal, since it is negotiating contracts with the agencies involved.)

According to state figures, personal care assistants help some 30,000 Garden State residents with daily needs like bathing, dressing, cooking, cleaning and certain non-invasive health-related tasks; many take home around $10 an hour, experts said. These individuals work for agencies that are paid generally between $13 and $16 an hour, based on negotiated rates, by Medicaid managed care providers; these five insurers then receive a set amount from the state to fund all care for the Medicaid patients they cover.

‘Administrative efficiencies’

The legislation, (S-1018), would require managed care companies to pay these providers the same rate at which the state reimburses agencies that supply personal care assistants outside the managed care program — currently around $18 an hour. The current draft does not specify that this increase is passed on to the workers themselves. (In its letter, Amerigroup suggests its proposed cut could be absorbed by “greater administrative efficiencies,” offsetting an impact on the wages of frontline workers.)

But the proposal has worried Victor Muniz, a Kearney resident who ended up in a wheelchair after a spinal injury he suffered nearly a decade ago and credits the care he’s received at home with bolstering his recovery. “What they make now they can’t even live on,” he said. “They have families themselves.”

The legislation is the latest in a series of efforts to bolster the personal care profession, an industry that has played a growing and important role as the baby-boom generation ages and more disabled residents are supported in living independently — something the state Department of Human Services has embraced through its use of federal Medicaid waivers.

The bill passed the Assembly last week and is scheduled for a vote Thursday in the Senate Budget Committee, thanks in part to pressure from key Senate sponsors, Sen. Loretta Weinberg (D-Bergen), Sen. Diane Allen (R-Burlington), and Sen. Nellie Pou (D-Passaic.) The group held a press conference late last week — along with Chrissy Buteas, president and CEO of the Home Care & Hospice Association of NJ, Muniz, and others — to push for its passage.

“There has been a trend towards reducing the rates for personal care assistant services. It is essentially a race to the bottom to see who can pay the lowest reimbursement rates and get the biggest bang for their buck,” Weinberg said. Cutting payments makes it harder for agencies to maintain a qualified workforce, she added, and reduction “threatens both the quality and availability of care for those who need it.”

Cost of care has increased significantly

The notice from Amerigroup actually reflected a previous reform, adopted two years ago, that required insurance providers to tell the state when they planned to revise payment rates for this work. News in 2012 that the state’s largest Medicaid managed care provider planned to cut payments by nearly 10 percent, and another company intended to follow suit, prompted concerns from lawmakers, including Weinberg. The Legislature adopted a plan to require state approval for any rate drop, but a conditional veto outlined by Gov. Chris Christie made it so insurance companies only had to notify the state of their plans.

Insurance experts said that while personal care assistants earn low hourly wages, the overall cost of providing this care has grown significantly in recent years. And while home care providers stress the instability of the industry, others note it has actually grown significantly in recent years; there are now more than 300 home care agencies operating in New Jersey. This includes 91 new agencies that have opened up since 2013, Amerigroup noted, and the industry is expected to continue growing.

“Amerigroup has a long-standing commitment to provide members with access to trusted, caring healthcare services and have included personal care services in New Jersey for years as part of that commitment. Both the usage of personal care services and the overall cost associated with these services has grown significantly,” said company spokesman James Freeman. “In order to continue providing our members with the innovative and trustworthy services they are accustomed to receiving, we are seeking a slight reduction in the hourly payments to personal care agencies that will bring our rates in line with the market.”

But the rate-cut trend will undermine any gains and put additional stress on a healthcare system buffeted by potential funding cuts and massive policy shifts, sponsors of the bill said.

“Additional reimbursement cuts for in-home care will put some of New Jersey’s most vulnerable residents at risk,” Allen noted. “Those who provide this critical care should be paid a reasonable rate, which will continue to make it possible for nursing home eligible patients to remain in their own homes.”

Muniz, the Hudson County client, agreed that personal care assistants and other home care providers have had a huge impact on his life. For years, they were the first people he saw in the morning and the reason he was able to complete college and secure a job. (He also credits his wife, whom he married in March, for his success.) “They helped me so much,” Muniz said, “they helped me get to this level.”

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