State lawmakers passed a final state budget on Saturday for Fiscal Year (FY) 2022-23, and Governor Hochul signed and approved the bills later that afternoon. The $220 billion budget, which includes wage increases for home care aides, health care worker bonuses and other increases for health care funding, is $4 billion more than the Governor originally presented as part of the Executive Budget Proposal that was released in January. Governor. Hochul touted the budget agreement as a “bold and fiscally responsible plan [that] makes historic investments in communities across the State.”
Along with the new wage increases, bonuses and health care funding, the final budget agreement includes several new and expanded initiatives, including an increase in the state’s reserves to a record level of 15% of State Operating Funds spending by FY 2025. The final budget also addresses bail reform measures, the expansion of Kendra’s Law, $5 billion in spending for childcare and record-level housing, transportation and clean energy initiatives, among many others. Click here for an overview of the items included in the final budget agreement.
The final budget also includes some relief for record high fuel prices at the pump, providing a gas tax holiday, which pauses the state’s 16-cent per gallon gas tax from June 1, 2022 through December 31, 2022. The state would suspend both the 8-cent per gallon motor fuel tax and 8-cent per gallon sales tax on gasoline. According to the Governor, the tax break will cost the state $585 million in lost revenue for the year. HCA has repeatedly pressed the Executive and Legislature on the impact of the high fuel costs on home care workers, and more must be done to reduce costs and reflect the expenses in the state’s reimbursement methodologies.
Minimum Wage Increase for Home Care Aides
The final budget agreement includes a plan for over $7 billion in spending on a $3 per hour wage increase for home care workers over a two-year period. Beginning October 1, 2022, the hourly minimum wage for a home care aide will increase by $2; and beginning October 1, 2023, the minimum wage will increase by an additional dollar per hour. For periods on or after January 1, 2023, the wage parity benefit portions remain at $4.09 (New York City) and $3.22 (Long Island and Westchester). It is not self-evident in the language of the final budget bills whether or how the final budget provides reimbursement to the home care providers and managed care plans
The dollar amounts for home health wage increases included in the final budget are significantly less than the amounts proposed by both the Senate and the Assembly in their one-house budget proposals, which used standalone legislation known as Fair Pay for Home Care Workers and would have increased the minimum wage by 150% and provided reimbursement to providers.
The final home care wage provisions were negotiated and settled among the very final budget items and at the legislative “leaders” level, and thus very little additional detail is available at this time. HCA will be reaching out to key budget sources to finish putting the home care wage and funding picture together as quickly as possible.
Bonus Pay for Health and Mental Health Workers
The final budget also includes bonus pay for frontline health care staff working in health and mental health settings. According to the language, Medicaid providers that employ one employee and bills for services under the state plan or a home and community-based services waiver or have a provider agreement to bill for services provided or arranged through a managed care provider are eligible.
Worker bonuses are commensurate with the number of hours worked during the vesting period that will be determined by a vesting schedule issued by the Commissioner of Health. The schedule will provide for total payments not to exceed $3,000 per employee based upon the number of hours worked per week over the course of the vesting period. Specifically, the bonus pay will be distributed as follows:
- Employees who have worked an average of at least 20 but less than 30 hours per week over the course of a vesting period would receive a $500 bonus for the vesting period.
- Employees who have worked an average of at least 30 but less than 35 hours per week over the course of a vesting period would receive a $1,000 bonus for such vesting period.
- Employees who have worked an average of at least 35 hours per week over the course of a vesting period would receive a $1,500 bonus for such vesting period.
- Full-time employees who are exempt from overtime compensation as established in the labor commissioner’s minimum wage orders or otherwise provided by New York state law or regulation over the course of a vesting period would receive a $1,500 bonus for such vesting period.
An alternative number of vesting periods may be provided through regulation, provided that total payments do not exceed $3,000 per employee.
Employees will be eligible for bonuses for no more than two vesting periods per employer, in an amount equal to but not greater than $3,000 per employee across all employers.
Upon completion of a vesting period with an employer, an employee will be entitled to receive the bonus and the employer will be required to pay the bonus no later than the date specified under the law; however, that prior to such date the employee does not terminate, through action or inaction, the employment relationship with the employer.
Consumer Directed Provisions
The final budget also addresses the Consumer Directed Personal Assistance Program Fiscal Intermediary Request for Offers (CDPAP FI RFO). Under this provision, those not selected under the initial RFO process would now qualify if the FI served more than 200 in cities of more than one million (i.e., New York City), and at least 50 consumers in other areas of the state at any time between January 1, 2020 and March 31, 2020.
Other Budget Provisions
The final budget also includes the following provisions and allocations:
- 1% rate increase for home care, hospice and other health care providers and elimination of the current 1.5% reduction to Medicaid rates.
- Cost of Living Adjustment: 5.4% increase for human services providers and workers.
- Telehealth: Requires telehealth services to be reimbursed at the same rate as in-person services, though certain telehealth costs would not be eligible for reimbursement, such as facility fees.
- New Statewide Health Care Facility Transformation Funds: Up to $25 million for home care and hospice providers.
- Medically fragile adults and children: Increased rates for private duty nursing services provided to medically fragile adults.
Managed Care Procurement Rejected
Critically important, the final budget rejects a procurement process for managed care organizations that had been proposed and pressed by the Executive. HCA had strongly opposed the procurement process and fought for its rejection. The budget agreement does require a report by an independent contractor that reviews and makes recommendations about the status of services offered by managed care organizations.
Independent Assessor (IA) Extensions
Language is included that amends current IA provisions. Specifically, it permits the state Department of Health to extend (1) the existing Maximus contract to perform IA services until September 30, 2025, but thereafter requires a procurement; (2) the enrollment broker and conflict-free evaluation Maximus contracts until August 19, 2026; and (3) the contract for independent physician panel services through September 20, 2025. The final budget prohibits extensions beyond such dates.
HCA had led an effort beginning in January among five major associations with managed long term care members, urging the Governor and Legislature to fully repeal the IA and will resume efforts to persuade the Governor to rid the IA from state policy.
Licensed Home Care Services Agency (LHCSA) Authorization Process
The final budget does not repeal the LHCSA Authorization Process, despite constant HCA advocacy for repeal and the pickup of substantial support in the Legislature. HCA will continue to fight for the RFO repeal in the post-budget session of the Legislature.
HCA Budget Briefing This Wednesday, April 13
HCA Public Policy staff are currently reviewing the contents of the final budget and will provide a more detailed analysis in the coming days.
Members are encouraged to join HCA on Wednesday, April 13 from 1 p.m. to 2 p.m. for a budget briefing on the items most important to the membership. Please register here for the ZOOM meeting.