The White House has finalized a policy mandating home care providers spend at least 80% of Medicaid payments on direct care workers.
The mandate is outlined in CMS' Ensuring Access to Medicaid Services Final Rule published April 22 — the same day CMS also finalized a minimum staffing rule for nursing homes.
"Minimum nursing home staffing rule will soak up lots of attention today but this new Medicaid rule 'requiring providers to allocate at least 80% of home- and community-based payments to direct care worker pay' is HUGE too," David Grabowski, PhD, a professor of healthcare policy at Boston-based Harvard Medical School, said in an April 22 post on X.
The rule will require providers to spend at least 80% of all Medicaid fee-for-service payments for homemaker services, home health aide services and personal care services on compensation for direct care workers. States will have six years to comply with this requirement — an extension from the four-year deadline proposed in CMS' draft rule.
"We agree that there may be state or local circumstances that impact the percent of Medicaid payments that is spent on compensation for direct care workers," CMS said in its final rule. "Where possible, we have built flexibilities into this requirement … to ensure that it addresses certain differences among HCBS programs and providers."
Flexibilities include allowing states to identify and set a separate minimum performance level for small providers. The Indian Health Service and Tribal health programs are also exempt from the mandate.
The National Association for Home Care & Hospice said it is "extremely disappointed" in CMS' decision to finalize the payment measure.
"This is a misguided policy that will result in agency closures, force providers to exit the Medicaid program, and will ultimately make access issues worse around the country," the association said in an April 22 statement.
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