A state official charged with overseeing Medicaid-funded services that help people with disabilities live in community-based settings rather than in nursing homes said Tuesday that coming changes in federal wage and hour rules are likely to increase costs, reduce access to care and give beneficiaries less say in deciding who will provide their care.
“We have great concerns about this,” said Kansas Department for Aging and Disability Services Secretary Kari Bruffett, testifying before a Statehouse meeting of the Robert G. Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.
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The changes, which were first announced by the U.S. Department of Labor in September 2013, are set to take effect the first of the year. They require states to pay attendant care workers overtime if they work more than 40 hours a week.
Bruffett said the changes are expected to have little effect on home health companies that already pay their employees an hourly wage and have long been subject to laws governing overtime.
KDADS letter to U.S. Department of Labor
But in Kansas, she said, most of the state’s Medicaid-funded in-home services are based on an assessment of each individual’s needs and a formula for calculating how much the state will pay to have those needs met.
Medicaid beneficiaries then are given the choice of letting a home health agency provide the needed services or making those decisions for themselves.
Typically, a home health agency won’t agree to provide the services if the agreed-upon rate doesn’t cover its overtime costs. But there’s nothing to stop an individual from hiring a caregiver – an adult son or daughter, for example – who’s willing to provide the care for what the state is willing to pay.
Bruffett said KDADS is now being told that after Jan. 1, so-called self-directed caregivers will have to be paid minimum wage as well as overtime.
If the agreed-upon rate falls short of the required wages, she said, the state will have to cut services or pay more for them.
The rule change likely will double the cost of providing thousands of beneficiaries with sleep cycle support services, she said. That refers to the practice of paying someone to be present while a beneficiary sleeps so they’re available when the person in their care needs help toileting, taking medication, being repositioned to prevent bedsores or getting out of bed in the morning.
Department of Labor fact sheet
Currently, the state pays about $35 for six to eight hours of sleep cycle support. After the minimum-wage requirement takes effect, it’s likely to cost roughly $60 per person per night.
Bruffett warned that without sleep cycle support, thousands of vulnerable Kansas – frail elders and people with disabilities, primarily – likely would need to move to a nursing home setting.
“Those would not be good choices,” she said.
Bruffett said KDADS has not yet calculated how much it expects the change to cost the state. Instead, she said, the department is planning to “push back pretty hard,” noting that she recently wrote a letter to U.S. Department of Labor Secretary Tom Perez, asking him to exempt Kansas’ self-directed programs or delay implementation of the new rule.
“I’m not here to cause alarm,” she said, “but we do want people to know that changes are going to be made. And we’d like them to join us in pushing back. We’d like for there to be some kind of Kansas-specific exemption.”
Bruffett said she was aware that Perez has denied similar requests from other states.
The committee did not hear from anyone representing the U.S. Department of Labor.
In a news release last year, Perez called the rule changes "an important step toward guaranteeing that these professionals (direct care workers) receive the wage protections they deserve while protecting the right of individuals to live at home."
Also, then-Department of Health and Human Services Secretary Kathleen Sebelius said the departments would "continue to engage with consumers, states, advocates and home care providers in the implementation of this rule to help people with disabilities, older adults and their families receive quality, person-centered services."
But Mike Oxford, executive director at the Topeka Independent Living Resource Center, said that didn't happen. Instead, states' independent living centers, Medicaid directors, proponents of self-directed care and front-line advocacy groups were "purposely excluded" from the departments' discussions, he said.
"I believe that these regulations are very shortsighted and will ultimately harm both workers and people with disabilities in Kansas and in many other places," Oxford said.
“And what’s really sad is that this is going to hijack a lot of other issues that we have going on, like restoring cuts in services and addressing waiting list for services,” he said. “And now, we’re looking at having to spend all this money on overtime, which, when it’s all said and done, is going to lead to fewer services.”
Oxford encouraged Medicaid beneficiaries to contact their legislators about the changes.
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