Reduced Federal Share May Force State Medicaid Programs to Cut Services, HCBS Expert Says

McKnight’s Home Care | By Adam Healy

Though a recent period of Medicaid “unwinding” has slashed the number of enrollees, federal actions have continued to put pressure on states and could result in program cuts in the coming years, one home- and community-based services expert said. 

The Congressional Budget Office this month released its “Budget and Economic Outlook” report for the coming decade. In its report, CBO predicted a roughly $58 billion drop in federal Medicaid outlays for 2024 compared to 2023 — a 9% decrease in federal Medicaid spending, due in part to fewer beneficiaries on states’ Medicaid rolls. 

Reduced Medicaid outlays, in addition to the phasing out of the Federal Medical Assistance Percentage (FMAP), which provided enhanced federal Medicaid funding for states during the pandemic, has placed an even greater strain on states to pay for these Medicaid programs, according to Damon Terzaghi, director of Medicaid HCBS for the National Association for Home Care & Hospice.

“The reduction in the federal outlays is essentially going to result in one of two things — increased state spending to offset the reduced federal share, or a cut to Medicaid [services or staff] to make up the difference,” he told McKnight’s Home Care Daily Pulse. “I think it will likely end up being a combination of the two.”

State budgets this year will likely focus more on maintaining current spending levels, rather than increasing them, Terzaghi said. And the states that are unable to manage the increased burden may have to cut Medicaid staff or services. Perhaps as one example, New York, Gov. Kathy Hochul (D) floated $1.2 billion worth of Medicaid cuts in a recent budget proposal, including a $400 million reduction for long-term care services and a $200 million cut to the state’s consumer-directed personal assistance program.

“There are obviously a lot of dynamics at play so we can’t solely blame the expiration of the … FMAP bump for any of these proposals,” Terzaghi said. “I certainly don’t think it will give states more money to play with though.”

In recent months, the so-called Medicaid unwinding, a result of states redetermining beneficiaries’ eligibility following a period of continuous enrollment during the COVID-19 pandemic, has resulted in more than 16 million Medicaid terminations — or about 17% of overall enrollment, according to KFF. States still have more than 45 million enrollees to reassess, and the number of terminations is expected to continue growing.

 

Nurses for Medically Fragile Kids are Underpaid and Hard to Find. Parents Want the State to Step In.

The Colorado Sun | By Jennifer Brown

Nurses willing to care for medically fragile children and adults — including patients who use feeding tubes, can’t walk or speak, and rarely leave their homes — are hard to find in Colorado. 

Amid a statewide nursing shortage so dire that even state mental institutions offer $14,000 signing bonuses, the lowest-paying nursing positions are going unfilled. That means many parents who have relied on “private duty nurses” for in-home care for their children and adult children are getting no help. 

Colorado’s Medicaid program reimburses the agencies that employ these in-home nurses at some of the lowest rates in the nation, according to the Home Care and Hospice Association of Colorado. The rate for registered nurses in Colorado is $7.05 per hour below the national median, while the rate for licensed practical nurses is $9.04 below the median, according to the association’s analysis. 

This puts Colorado in the bottom third of states and it’s why parents of children with extreme health issues are asking lawmakers for a $15 million boost in state funding. The money would raise Medicaid rates that pay nurses’ salaries...

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Employee Retention Credit – Voluntary Disclosure Program

IRS

If you claimed and received the Employee Retention Credit (ERC), but you are ineligible and need to repay the ERC, this page will help you figure out if you can apply for the Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) and how to do that. 

The ERC-VDP is open through March 22, 2024. The program requires you to: 

  • Voluntarily pay back the ERC, minus 20%,
  • Cooperate with any requests from the IRS for more information, and
  • Sign a closing agreement. 

If you need help checking your eligibility for the credit itself, use the Employee Retention Credit Eligibility Checklist and see the Frequently asked questions (FAQ) about the ERC

For additional information see the Frequently asked questions focused on ERC-VDP.

Work with a trusted tax professional if you need help or advice on this process or on the ERC.

For more information, see:

 

Proposed HCBS Rule Could Diminish Service Access, Hamper Provider Retention Efforts, 11 Senators Tell CMS

McKnight’s Senior Living | By Lois Bowers
 
A proposed federal rule that would require providers of home- and community-based services to spend at least 80% of the Medicaid payments they receive for personal care, homemaker and home health aide services on compensation for direct care workers could diminish older adult access to services and hamper providers’ workforce retention efforts, 11 Republican senators told the administrator of the Centers for Medicare & Medicaid Services on Thursday.
 
“We have significant concerns that the proposal could and will likely harm access for seniors and people with disabilities, particularly in rural regions of the country, as well as harm workforce retention and provider networks,” the senators wrote CMS Administrator Chiquita Brooks-LaSure in a letter.
 
The missive was signed by Sens. Marsha Blackburn of Tennessee, Ted Budd of North Carolina, Shelley Moore Capito of West Virginia, Steve Daines of Montana, James Lankford of Oklahoma, Markwayne Mullin of Oklahoma, Tim Scott of South Carolina, Dan Sullivan of Alaska, John Thune of South Dakota, Thom Tillis of North Carolina and Roger Wicker of Mississippi.
 
CMS proposed the “Medicaid Program; Ensuring Access to Medicaid Services” rule in April. The proposal, which also would mandate quality measures and make other changes to the HCBS program, was sent to the White House Office of Management and Budget in January, and CMS has indicated that it plans to issue a final rule by April.
 
The 11 lawmakers recommended that CMS assess Medicaid data through collaborations with states and other stakeholders, as well as federal resources such as the Medicaid and CHIP Payment and Access Commission, and then work with MACPAC “to create a stakeholder and interagency evaluation of the impacts on payment, data and other outcomes of defining the direct care workforce.”…

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The Bottom Line: Top Billing, Financial Mistakes Responsible for Home Health Agency Struggles

Home Health Care News | By Joyce Famakinwa
 
Home health providers often make mistakes that leave money on the table at best, and at 
worst, lead to financial ruin. 
 
However, providers that learn to avoid these stumbling blocks will be better positioned to achieve longevity and financial stability. 
 
In general, the home health consulting firm SimiTree has noticed an increase in the amount of providers that have been struggling with things like unbilled claims, inaccurate primary payer selection and more, according to Lynn Labarta, vice president of post-acute revenue cycle management at SimiTree. 
 
In fact, Labarta recently wrote about this very topic for SimiTree. 
 
“SimiTree has thousands of customers in the home health and hospice space all over the country, and we have been seeing an uptick in these issues and agencies struggling or feeling that they may not survive,” she told Home Health Care News. 
 
Labarta believes that not staying on top of unbilled claims is the No. 1 issue that providers are currently struggling with. It’s an issue that pops up at companies of all sizes.
 
“We see this unbilled claims issue with all sorts of agencies — all the way from startups to mid-size agencies, even some of the largest agencies in the country struggle with this for different reasons,” she said.
 
Broadly, most providers’ EMR has a section in the software where all of the unbilled claims are housed. These are claims that can’t be billed because there is some type of hold on them. Typically it’s a clinical hold, or regulatory issue that prevents the claim from being billed. 
For many providers, this is where most of the revenue lives. 
 
“We’ve seen agencies that have thousands of claims sitting in the unbilled claims list,” Labarta said. “When you translate the thousands of claims sitting in that bucket, depending on the size of the agency, you’re talking about hundreds of thousands of dollars. Of course, if you’re dealing with a smaller agency it could be smaller dollars, but it still impacts cash flow. This makes agencies feel like they’re seeing patients and working very hard, but not seeing the money coming through the door.”…

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