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As we reported earlier today to our clients, the New York Department of Health (“DOH”) has announced that it has postponed the deadline for LHCSAs and FIs to submit the wage parity certification information (e.g., LS 300 and LS301 forms) from the current deadline of June 1 to October 1, 2022. The compliance deadline for MCO’s and CHHA’s receipt and review of providers’ compliance attestations will also be extended from June 1 to October 1, 2022. A link to the DOH’s announcement is not yet available, but anyone wishing a copy of the same can contact us.

The DOH’s announcement also states that “The Departments of Health and Labor are currently reviewing forms LS-300 and LS-301 to determine if amendments are required and may be providing additional guidance on the forms and audit process required to complete the forms in the coming weeks.”

This announcement provides significant relief to providers who have been struggling to find accounting firms to conduct and certify the results of audits of providers’ wage parity compliance. As the provider community knows, the DOL’s and DOH’s contemplated process for the wage parity compliance certifications has faced significant pushback from the professional accounting and auditor community. These additional months should provide much-needed time to amend the forms and the process.

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The final NYS Budget was released over the weekend. In addition to bail reform, gas price relief, childcare and other measures, the Budget contains a lot of relevant information for the home care industry. As we have already reported on the CDPAP changes from the Budget, this alert will focus on the remaining aspects of the Budget. 

1. FAIR PAY FOR HOME CARE IS IN, SOMEWHAT 

A 150% increase to the base wages of home care workers was not passed, however, the Budget states that beginning October 1, 2022, the hourly minimum wage for home care workers (which includes personal assistants and NHTD/TBI workers) will increase by $2.00. Starting on October 1, 2023, the minimum wage will increase again by an additional $1.00.

It is not clear how these increases will be funded. The Budget does not expressly appropriate funding for this increase in wages. Home care advocacy groups are working on ensuring that the necessary reimbursement comes through, and we have heard from various sources that the Legislature intends to “pick up” this issue post-Budget. To ensure adequate and timely reimbursement, providers should not only speak to their plans (who are also in a position to demand additional reimbursement from New York State) but also advocate and lobby with their local elected officials.

The Wage Parity benefits increases that were proposed by the Assembly and Senate are not in the Budget.

2. BONUS PAY FOR HEALTHCARE WORKERS

Subject to federal participation and funding , the final Budget also includes a one-time bonus for “certain front line health care and mental hygiene practitioners…” According to the Budget bill, the bonus would apply to LHCSAs and FIs (among other healthcare providers) and is intended to “attract talented people into the profession at a time of significant strain…and reward them financially for their service.” However, the Budget defines eligible employees as “assistants” (presumably FI personal assistants) and “aides” (presumably LHCSA and CHHA aides) “that provide hands on health or care services to individuals…that received an annualized base salary of [$125,000] or less, to include [various healthcare professionals, as listed].” HHAs, PCAs, and PAs in CDPAP are not specifically listed as the types of personnel covered by the Budget bill. We have also heard this morning that the Office of Budget does not consider home care and fiscal intermediary direct care staff to be covered by this Budget bill. We are monitoring this issue and will update our readers as more information becomes available.

Per the Budget, worker bonuses would be commensurate with the number of hours worked during a vesting period, with the vesting periods being determined by a schedule published by the Commissioner of Health. The bonus program would provide for total payments not to exceed $3,000 per employee based upon the number of weekly hours worked in a vesting period.

The Commissioner of Health will develop forms and procedures to identify the number of hours of employees worked, and forms related to reimbursement to employers. Employers will track the number of hours worked by employees and submit claims for reimbursement of employee bonus payments. Employers will be responsible for determining if an employee is eligible under this law for the bonus.

Similar to the language in the Wage Parity Law, the Budget specifically states that “no portion of any dollars received from claims [for bonus reimbursement]…shall be returned to any person other than the employee to whom the bonus is due,” and, for wage parity providers, the Budget states that no portion of the bonus amounts can be used to reduce the “total compensation” required to be paid under the Wage Parity Law.

Compliance with the law will be monitored by the Office of the Medicaid Inspector General (“OMIG”). Inappropriate claims for bonus reimbursement will be treated as Medicaid overpayments and may be recovered as such. OMIG could also impose other penalties and exclude providers from Medicaid participation as punishment for any wrongdoing related to this bonus program.

3. LHCSA RFO HAS NOT BEEN REPEALED

Despite strong advocacy efforts, the LHCSA RFO has not been repealed. Under the law as it currently stands, the DOH is required to issue a LHCSA RFO. We do not know when that will happen, despite indications that the LHCSA RFO would be “implemented” on May 1, 2022. In view of the significant pushback that the CDPAP RFO has received, it is likely that the same advocacy and litigation will ensue once the LHCSA RFO results are announced.

4. MLTC RFO IS A NO-GO

The final Budget does not establish a MLTC RFO, as had been proposed by the Executive. Instead, the Budget commands the Department of Health to appoint an independent contractor to “generate a report that reviews and makes recommendations concerning the status of services offered by managed care organizations contracting with” the NYS Medicaid program. Thus, instead of a MLTC RFO, the State will conduct a study on and about managed care.

5. INDEPENDENT ASSESSOR IS ON TRACK FOR 5.1.22

The independent assessor provisions that are on track for May 1, 2022, have not been repealed through the Budget. However, the Budget contains a provision that sunsets the Independent Assessor (IA) selection no later than September 30, 2025. The Budget also significantly modifies the statute language that outlines the process by which an independent assessor is selected.

6. OTHER IMPORTANT HOME CARE RELATED ITEMS FROM THE BUDGET

A. The Medicaid Global Cap has been redefined. The methodology for calculating the cap has changed from a 10-year rolling average to a 5-year average and will now be based on the annual growth rate projections from the Centers for Medicare and Medicaid Services’ (CMS) actuary offices. The intention of the change is to provide a more accurate picture of Medicaid spending and growth of the Medicaid program.

B. As proposed by the one-house budget bills, the Budget includes enhanced rates for Private Duty Nursing in the medically fragile children program will now extend to care for those individuals after they reach age 23. Rates may be calculated by the Commissioner of Health from average 2020 Medicaid Managed Care payments.

C. The Budget includes a 1% rate increase for home care, hospice and other healthcare providers, as well as an elimination of the current 1.5% reduction to Medicaid rates.

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The final language of the New York State Budget has started to be released. We have not yet seen whether Fair Pay for Home Care has made it into the Budget. There were troubling last-minute reports that the home care worker base wage has been raised by $3.00/hour, presumably Statewide, with no concurrent increase in reimbursement. Thus, we are anxiously awaiting to see the final language on Fair Pay. However, there are major changes with respect to the CDPAP RFO in the Budget, and we discuss only that topic from the Budget in this alert.

Effective immediately, the law has been revised to state that any FI that was deemed qualified on February 11, 2021 by the DOH as a result of the CDPAP RFO, is eligible to enter into a contract with New York State to provide FI services, so long as:

1. The applicant was providing FI services for at least 200 consumers in a city with a population of more than 1 million at any time between1/1/2020 and 3/31/2020 OR
2. The applicant was providing FI services for at least 50 consumers in another area of New York State at any time between 1/1/2020 and 3/31/2020.

The consumer census for the above purposes can be measured on any date between 1/1/2020 and 3/31/2020. The law does not seem to require a consistent census of 200 or 50 consumers in this first quarter of 2020. However, it is not clear what it means to be “providing services.” Presumably, the consumer must have received at least 1 day of services from the FI in order to “count” as being a consumer of the FI, but that is not certain. Likely, consumers “in the pipeline” who have not yet begun to receive services will not count.

The State will require providers to certify to compliance with the foregoing requirements. An attestation form will be published by the DOH, and a response will be required within 60 days. Any late submission will disqualify an applicant from the RFO. The attestations will be audited by OMIG, and any false or inaccurate attestation will render the FI’s contract with New York State null and void. It appears that the attestations will only apply to those agencies that were not initially selected to be lead fiscal intermediaries. Thus, the originally selected lead FIs will seemingly not be required to complete these attestations.

Contracts awarded per these requirements will be limited to the service areas in the initial RFO application. Thus, for fiscal intermediaries that have operations in New York City and outside of New York City, it appears that so long as the fiscal intermediary qualifies under either the 50 or the 200 test, it can provide services in all the counties that it had selected on its RFO application.

Agencies previously approved through the RFO will keep their status as a lead fiscal intermediary. Thus, an agency previously approved for the CDPAP RFO that does not meet the 200 or 50-consumer threshold will continue to be eligible to contract with New York State for a RFO as a lead fiscal intermediary, even though it would not have meet the 200 or 50-consumer threshold.

If you have any questions about the CDPAP RFO, please contact us.

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The New York State Budget is late this year, but it is expected to be finalized on Thursday, April 7. The Budget will contain several bills relevant to home care, however, in this article we will focus on two potentially major home care changes coming out of the Budget: the CDPAP RFO and Fair Pay for Home Care. (The LHCSA RFO is unlikely to be repealed in the Budget, which is itself significant. However, to the extent CDPAP RFO repeal (or a mini-repeal) is effectuated in the Budget, then it is likely that the LHCSA RFO will face the same fate down the line).

Late last week, as the Legislators were attempting to finalize the Budget, we understand that the Executive initiated discussions about reforming the CDPAP RFO. Based on reports we received, the Executive is in support of some CDPAP RFO reform that would allow an unspecified number of fiscal intermediaries that had not “won” the RFO to continue operating. The SEIU1199 did not appear to oppose these efforts at reforming the CDPAP RFO. As we understand, the Governor’s office wishes to put the CDPAP RFO issue to rest so that the Governor can focus on other matters. We subsequently heard that the CDPAP RFO might be taken up after the Budget. With so many issues that erupted somewhat late in the Budget season (e.g., the Bills Stadium, bail reform), it would not be unusual for the State to push off an issue like the CDPAP RFO until after the Budget is finalized. However, there seemed to be a strong consensus building to do something to reform the RFO and several sources have reported that the final Budget will contain a RFO revision bill. With so much last-minute activity on a subject that had grown dormant, we are eager to see what the final Budget will actually say (if anything) on the CDPAP RFO.

The other issue that will be significant for home care providers and fiscal intermediaries is the Fair Pay for Home Care proposal, which calls for a significant increase in the base wages of home care workers. This is not the first time that Fair Pay for Home Care has been introduced in the Legislature. However, unlike prior efforts, there is likely to be some increase in workers’ base pay this time around. We heard last week that the Governor had agreed to raising wages of home care workers, however, there was disagreement with the Legislature about how much of an increase to impose. Thus, the final Budget is likely to contain a base wage increase for home care workers, but we do not know how much of an increase.

Of concern for providers is ensuring that reimbursement increases follow any base wage increases. We understand from various sources that a statutory minimum on reimbursement has been rejected and, thus, will not be in the Budget. As readers of our alert will recall, the one-house budget proposals had included a minimum reimbursement amount that plans and payors would have to guarantee to providers, and that reimbursement amount would have satisfied the proposed base wage increase under Fair Pay for Home Care. It is our understanding that the Executive rejected the idea of binding plans to a specific reimbursement amount, preferring instead to allow market forces to set the reimbursement rates.

There are of course other issues on the table in the Budget; the independent assessor, the MLTC RFO, proposals to increase wage parity total compensation amounts, among others. We should know more about all of these issues in the next few days as the Budget is published. In the meantime, if you have any questions about the Budget, please contact us.

Fair Pay for Home Care Workers is in, Along with Proposals to Set Reimbursement Rates and Pause the CDPAP RFO

Legislative “One House” budget proposals were released late Saturday night by the Assembly, and on Sunday night by the Senate. As relevant to our alert, the proposals aim to amend the existing Medicaid and healthcare laws in New York State and, in some cases, create new laws as part of the State’s overall budget planning. The Senate, Assembly, and the Executive Chamber will now begin three-way negotiations toward a final budget, which is due by the April 1 start of State Fiscal Year 2022-23. This is our assessment of the one-house proposals:

Proposal to Put on Hold and Potentially Repeal the CDPAP RFO
The Senate one-house budget includes a proposal to require the Commissioner of Health to “prepare a study of the” CDPAP to “assess the current need and costs associated with” the program, including but not limited to: total current and anticipated eligible Medicaid recipients; the appropriate number of fiscal intermediaries required to ensure continuity of care and program administration for all participants statewide; the need for procurement of fiscal intermediary services; all evidence-based criteria and scoring to be used during any procurement process, if required; and the need for any programmatic and changes to support the program.” The Commissioner has until December 31, 2023, to complete and submit the study to the temporary president of the Senate, the Speaker of the Assembly, and the chairs of the Senate and Assembly Health Committees. Until the Commissioner’s study and report are submitted, any changes to the CDPAP would be suspended and, “if necessary,” the RFO would be re-issued 180 days after the study’s release.

The mandate on the Commissioner and any “hold” on the CDPAP RFO would be in effect immediately if the budget were to pass.

Interestingly, contrary to the majority of proposals that impact home care and Medicaid, this Senate proposal was not mimicked in the Assembly’s one-house proposal. Further, the Senate proposal did not track the language proposed several weeks ago by New York Senator Mannion to repeal the CDPAP RFO.

Fair Pay for Home Care
Perhaps the biggest topic of the one-house budget proposals falls under the “Fair Pay for Home Care” umbrella because, as we interpret the various proposals collectively, the Fair Pay proposal is not backed up by sufficient funding for providers.

Both the Senate and the Assembly proposals seek to increase the base wage compensation for every “home care aide” (defined to including personal assistants in CDPAP, PCAs, HHAs, and NHTD/TBI aides Statewide) on October 1, 2022, so that the resulting base wage is equal to 150% of the higher of either (a) the applicable State minimum wage rate or (b) “any otherwise applicable wage rule.”

The increase in base pay does not appear to be a one-time increase to the aides’ wages. Rather, to the extent the State’s minimum wage increases, then the aides’ compensation would also have to be increased so that it is at least 150% higher than the State’s minimum wage rate.

Reimbursement Changes
Both the Senate and the Assembly’s one-house budgets propose establishing, or fixing, reimbursement rates. The Commissioner would establish a “regional minimum hourly base reimbursement rate” for all home care providers covered by the Fair Pay for Home Care requirement.

Per the proposals, the “regional minimum hourly base reimbursement rate” would be defined to “mean a reimbursement rate that reflects the average combined costs associated with the provision of direct service[s] inclusive of but not limited to overtime costs, all benefits, all payroll taxes, including but not limited to federal insurance contributions…federal unemployment tax…state unemployment insurance, disability insurance, workers’ compensation, and the metropolitan transportation authority tax, related increases tied to base wages such as compression, reasonable administrative costs defined by the [C]commissioner, allowances for capital costs; the development of profit or reserves as allowable by law or regulations of the [C]ommissioner, and any additional supplemental payments.” Thus, at first blush, this “regional minimum hourly base reimbursement rate” would encapsulate direct care costs and administrative costs.

New York City and Long Island/Westchester would be their own regions for purposes of the reimbursement rate, and the rest of New York State would be its own separate region. For PCA services, the “regional minimum” reimbursement rate would be $38.50/hour for New York City, Long Island and Westchester. For the rest of New York, the PCA “regional minimum” reimbursement rate would be $38.18/hour.

A special rate would be developed for NHTD and TBI providers.

For CDPAP, the above PCA rates could apply, but the Commissioner would have the authority to reduce the “regional reimbursement” rate by almost 13%. If such a reduction occurred, a PMPM increase reflective of actual administrative and general costs, adjusted to reflect regional differences, would be made to FIs.

Plans and local departments of services would be prohibited from reimbursing providers at rates lower than the above-proposed rates. The Senate proposal details the process by which the Commissioner would raise reimbursement rates each year. In addition, the Senate’s proposal details the establishment of a special fund, to be known as the “Fair Pay for Home Care Fund” that would be used to assist in paying for aides’ wages, but this would not be the sole source for funding the Fair Pay wage increases. As a miscellaneous item, we note that both houses’ budgets propose creating a billing code that would allow providers to report the “hourly cost of services at an overtime rate” for unauthorized work hours.

Wage Parity Changes
According to both proposals, beginning on January 1, 2023, the benefit portion of the “total compensation” requirement under the Wage Parity Law would be increased; for Long Island and Westchester providers, the $3.22 portion of the $18.22/hour total wage parity requirement would increase to $3.89/wage parity hour and for New York City providers, the $4.09 portion would be increased to $4.84/wage parity hour.

These benefits requirements appear to be applicable in addition to the Fair Pay for Home Care increases for downstate providers.

Changes to LHCSA Ownership Rules
The Senate’s one-house proposal amends Section 3611-a of the Public Health Law to require any transfer, assignment or other disposition of an interest, stock, or voting rights in a sole proprietorship, partnership, LLC, not-for-profit, or a corporation of a LHCSA or CHHA to be approved by PHHPC. In addition, with respect to LHCSAs, the Commissioner would be empowered to pass regulations requiring the forgoing changes to go through the public need analysis. The proposal also outlines notice provisions for individuals who are acquiring less than 10% of an interest in a LHCSA.

Medicaid Increase
Both the Assembly and the Senate proposals include a 1% across-the-board increase to Medicaid providers. In addition, the Assembly adds another 1.47% rate increase in the overall Medicaid lump sum.

Also, the Senate and the Assembly both propose repealing the Medicaid Global Cap, which the Healthcare Chairs have both long argued is an artificial number that no longer serves any benefit for New Yorkers.

Nurse Loan Repayment Program
Subject to sufficient funding, both the Assembly and Senate one-house budgets propose establishing a student loan repayment program for RNs and LPNs who are working in “underserved areas in New York State and who agree to work in such areas for a period of 3 consecutive years.” This would apply to nurses working in a “facility, physician’s office, nurse practitioner’s office, or physician assistant’s office.” There is no specific mention of this loan repayment program applying to nurses working for LHCSAs or CHHAs. 1/3 of the available funding would be allocated to nurses in New York City, and the rest to the rest of the State. Unless this proposal is amended or clarified to confirm that it applies to home care nurses, there is a risk of exacerbating the LHCSA and CHHA nursing shortages by passing a program like this in New York. This is because nurses with student loan obligations would have even more incentives to work for non-home care healthcare providers.

Healthcare Facility “Transformation” Program
Both the Senate and Assembly bills, subject to sufficient funding, include proposals to “transform, redesign, and strengthen quality healthcare services” by having the State distribute “grants” to various healthcare facilities (including “home care providers certified or licensed” under Article 36 of the PHL). Fiscal intermediaries do not appear to be covered by this proposal. As part of this program, the State Commissioner of Health would have $450 million to distribute to eligible providers and, according to the Assembly proposal, “at least $100 million of total awards” would be made to community-based healthcare providers, which are defined to include CHHAs and LHCSAs. Under the Senate proposal, “at least twenty five percent” of the total funding would go towards community-based providers.

Private Duty Nursing
Both houses propose to increase reimbursement rates for private duty nursing services for “medically fragile adults” no later than 60 days after the budget is adopted. The Commissioner of Health would also increase FFS reimbursement rates for PDN services provided to medically fragile adults, and, in setting the rates, the Commissioner would be authorized to use the average 2020 Medicaid managed care pay reimbursement rates for PDN as a benchmark.

Also, a directory of PDN providers serving medically fragile adults would be created (modifying a directory that was established solely for medically fragile children receiving PDN).

Summary
As stated at the outset, these proposals are simply proposals at this time. Now, the representatives of the Legislature and the Governor will negotiate the final budget language. As in years’ past, the budget, once issued, will be the final compromise of this negotiation process. We do not know what will be in the final budget. Some or all of these proposals might make their way into the final budget. Other proposals will be dropped. And then there are opportunities for proposals that are not in the one-house budgets to be included in the final budget bill at the last minute. We will keep you updated as this process evolves over the next few weeks. In the meantime, clients who have any questions about the budget proposals as they currently stand, should not hesitate to contact us.

We have been informed that CMS has approved New York’s plan for distribution of the Enhanced Federal Medical Assistance Percentage monies (“FMAP”) to the State’s licensed home care services agencies. DOH will now make payments to Managed Long Term Care (MLTC) and Medicaid Advantage Plans (MAPs) in their March 31 payment (cycle 2325). Plans will then have 30 days to distribute the funds to LHCSAs that had previously been notified by the DOH of their eligibility for these funds.

DOH will notify eligible LHCSAs of their award amounts. In addition, compliance attestations will be provided to every agency. Plans will be notified of agencies in their network that have been approved for FMAP funds, and what activities were funded for each LHCSA.

As we had previously reported, agencies receiving FMAP funds will have until March 31, 2023, to spend the funds on initiatives and programs they had committed to funding. In total, approximately $354 million is being made available under this FMAP distribution to eligible agencies. Additional programs are in development that could benefit other providers in New York.

On March 1, Governor Hochul signed Executive Order 4.6 which extended various regulatory waivers for home care providers. Of importance, the EO allows LHCSAs and CHHAs to conduct in-home supervision of aides as soon as practicable after the initial service visit or to conduct such supervision through indirect means, including telephone and video communication. The EO is scheduled to expire March 31. Although the EO could be extended, given the State’s attempts to “return to normal,” providers should prepare for the possibility that the EO will not be extended when it expires on March 31.