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Report Shows Financial, Workforce Struggles of Home & Community Care Sector Amid State Budget Talks

ALBANY — Coinciding with today’s state legislative hearing on the health and Medicaid budget, the Home Care Association of New York State (HCA) today released the findings of our annual financial and trends report for the home and community-based care sector, which serves approximately 500,000 patients and families in New York State.

The report is culled from the latest available state Medicaid financial reports and a survey of providers. It shows: financial margins; revenue and cost cycle and accounts receivable data; workforce turnover and vacancy rates; access issues; and more.

“The data reveals urgent vulnerabilities and needs in the vital in-home safety-net,” said HCA President Al Cardillo in prepared testimony to the Legislature today. (The report is here; HCA’s testimony is here.)

87% of New York State’s home care and personal care services are covered by Medicaid. These services have been vulnerable to rate shortfalls across the continuum – from the Managed Long Term Care (MLTC) plans that coordinate services to the Certified Home Health Agencies (CHHAs) and Licensed Home Care Services Agencies (LHCSAs) who deliver services under contract with these plans. Below is a snapshot.  

Cash flow

Home care agencies report an average accounts receivable (A/R) of 58 days outstanding. A/R represents the money owed to an entity from outside payors. Thus, it takes 58 days for a home care agency to collect payments from all sources, on average.

Operating Margins

72% of CHHA providers had negative operating margins (costs exceeding revenue) as of 2017 (the latest year of reported data), with an average margin of negative-11.95%. Sixty-five percent of LHCSAs had negative margins in 2017.

Ripple effect

The majority of a CHHA or LHCSA’s Medicaid service volume comes from contracts with MLTC plans. This means that these providers are also exposed to an MLTC’s financial vulnerability. To give a sense of that vulnerability, 64% of MLTC plans reported negative premium income in 2017 (the difference between a plan’s premium receipts from the state and its expenses for service contracts and operations). Thus, the state’s rate shortfalls to MLTC plans have caused fiscal instability across the entire home and community-based system, as plans and their network contractors alike shoulder unsustainable losses.

Workforce

Providers have unfilled workforce positions to meet the rise in home care demand. On average, these unfilled positions include: 17.07% of unfilled home health aide/personal care aide jobs; 20.62% unfilled nursing jobs; and 20.67% unfilled therapist jobs.

HCA’s report shows that between 28.25% and 38.95% of a provider’s potential or actual case admissions, on average, are delayed or hindered by labor shortages in home care.  

“In the past month, two MLTC plans have closed due to inadequate state premiums to match their enrollees’ risk,” Mr. Cardillo added in his written testimony. “These health plan closures are leaving outstanding debt and default payments to providers, adding to their financial struggles, while the 2019-20 Executive budget proposal contains still-further cuts to MLTCs.”

“Additionally, one of New York State’s CHHAs serving among the largest number of patients in New York City last week announced over 100 layoffs in a planned scale-back of patient caseload to a fraction of its current service capacity,” he said.

“New York’s policies stake the long term care system, and the care of our citizens, on the viability of home care and MLTC organizations,” he added. “The need for dedicated support in this budget is an imperative.”

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HCA is a statewide health organization comprised of nearly 400 member providers and organizations delivering home and community-based care to several hundred thousand New Yorkers annually. HCA works to support providers in the delivery of high quality, cost-effective home and community-based care for the state’s citizens. HCA providers include hospitals, nursing homes, free-standing agencies and health systems which operate Certified Home Health Agencies, Licensed Home Care Services Agencies, Managed Long Term Care Plans, Hospices, Long Term Home Health Care Programs, waiver programs, and an array of allied, supportive services entities.

To learn more about HCA, visit https://hca-nys.org/.

Contact:
Roger L. Noyes
Director of Communications
Home Care Association of New York State (HCA)
rnoyes@hcanys.org
(518) 810-0665  

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