Situation Report | April 12, 2021
In the early morning hours on Wednesday, April 7, state lawmakers passed the final remaining state budget bills, six days after the April 1 deadline.
The final enacted budget includes $212 billion in spending for fiscal year 2022, $12.6 billion in federal aid funding, and adds $3.5 billion in tax revenues.
Throughout the past several months, HCA urged lawmakers to: reject Medicaid cuts; reconsider the Senate’s proposed home care wage mandate in favor of HCA’s alternative proposals for workforce support in the budget; provide an equitable framework for the provision of telehealth services; revisit the Fiscal Intermediary (FI) contractor process; and more.
On many of these fronts, the final budget responded to key aspects of HCA’s appeals. Yet much more work needs to be done in the remainder of the legislative session to further advance HCA’s positions and to ensure appropriately directed use of newly appropriated funding investments for home and community-based services, as detailed below.
Medicaid Cuts Rejected
Importantly, the budget agreement excludes the proposed new 1 percent across-the-board reduction to Medicaid, the workforce recruitment-and-retention funding cuts, as well as the proposed reductions to quality pool funding for Managed Long Term Care (MLTC) plans. The final enacted budget, however, does not reverse last year’s 1.5 percent across-the-board reduction, as HCA had urged. The final budget also rejects major state Department of Health (DOH) penalty hikes to providers and plans, which HCA had also strongly opposed.
Wage Proposal
Legislators also set aside the proposed wage mandate, which would have required employers to pay home health aide wages at 112 percent of minimum wage and instituted mandatory hikes in benefits. While the proposal’s authors were rightly concerned about the need for worker supports and wage enhancements, HCA argued that a “wage mandate” approach was the wrong policy for wage improvement. It would have instituted a long-term funding obligation at a time when the state was prepared only to appropriate one-time funds for this purpose, putting providers at risk for covering a permanent mandate with no guarantee of sustainable or equitable funds to cover it.
The final budget, as discussed below, instead contains a large appropriation and generic language reflecting the Legislature’s intent to address home and community-based funding post-budget through appropriation authority approved in the budget.
$1.6 Billion FMAP Appropriation
The budget appropriates $1.629 billion through a 10-percent increase in enhanced Federal Medical Assistance Percentage (FMAP) funds for home and community-based services. However, the precise target for these funds remains indeterminate and left to the discretion of state agency commissioners who can expend the dollars through non-competitive contracts or grants.
Lawmakers have given the Executive considerable latitude in the use of these funds, a large portion of which appears to be a rededication of dollars earlier allocated for the wage mandate provisions. HCA will be working in the coming weeks to advocate an effective method of implementation benefiting patients, workers and agencies, as well as an equitable process in the way these funds are dedicated.
FIs and Telehealth
As we reported in last week’s Situation Report, the Health and Mental Hygiene budget legislation also includes FI and telehealth amendments.
In amending the current FI contracting process, the budget requires the state Department of Health (DOH) to survey information from all qualified FIs in order to make additional contract awards. To be considered for an additional award, applicants must respond to the survey within 30 days. Following receipt of the survey, DOH is directed to make additional awards, to the extent necessary, based on the additional criteria.
The budget also removes telehealth “originating site” limitations and expands “distant site” eligibility, plus it adds authorization for peer support services to be delivered via telehealth. Any site within the U.S. or its territories is eligible to be a distant site for delivery and payment purposes.
In the post-budget legislative session, HCA will continue to press for our telehealth proposals that would add important quality safeguards, avoid duplication of services, improve coordination among health care settings, and provide equitable coverage for home care. We will also continue to press for reforms in both the FI and Licensed Home Care Services Agency (LHCSA) Request For Offers (RFO) process, the latter of which is unaddressed in the budget.
Next Steps
The HCA policy team is currently reviewing the enacted budget and will provide members with a further detailed analysis in the coming days. HCA will be meeting with lawmakers to continue pressing HCA’s Home Care First policy agenda, funding mechanisms for home care, our telehealth proposals, and more.