NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1112
SPONSOR: Paulin TITLE OF BILL:
An act to amend the public health law, in relation to regional minimum
hourly base reimbursement rates for home care aides
PURPOSE:
To establish a reliable and predictable mechanism to ensure that home'
care providers receive adequate reimbursement from managed care organ-
izations for the purpose of paying their employees mandated wages and
benefits and to cover other costs of the employer.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the legislation would add new subdivisions to section
3614f of the public health law to accomplish the following: *To require
the commissioner of health to establish a regional minimum hourly base
reimbursement rate for providers employing home care and personal care
aides. The legislation would also identify specific elements of the rate
that must be included in its development, including direct care related
payments, components to reflect operational expenses necessary to comply
with state and federal mandates, and an administrative and general
expenses component. The legislation would require the rates reflect
regional variation and not be less than established fee for service
county rates. The legislation would also require the rates to be
adjusted annually by a trend factor.
To require the department to apply for federal approval for a state
directed payment for fully capitated Medicaid managed care plans for the
purpose of supporting the regional minimum hourly base reimbursement
rate.
* To require for partially capitated managed long term care plans, and
where federal approval is not secured for state directed payment, that
plans justify contracts offering deviations from the regional minimum
hourly base reimbursement rate. Providers would have an opportunity to
respond.
* To ensure that the department provides managed care organizations to
sufficient capitation to ensure rate adequacy to comply with the
requirements of regional minimum hourly base reimbursement rates.
* To require the department to amend the Medicaid managed care model
contract rates to comply with requirements of the bill.
* To require the department to publicly post the regional minimum hourly
base reimbursement rates.
* To require the department to publicly post cost report data of plans
and providers in a simple and understandable manner.
* To grant the comptroller the authority to review contracts to ensure
rate adequacy.
Section two of the legislation establishes a severability section.
Section three of the legislative sets the effective date.
JUSTIFICATION:
The need for a reliable and predictable mechanism to ensure that home
care providers receive adequate reimbursement from managed care organ-
izations for the purpose of paying their employees was made clear last
October when the $2/hour wage increase went into effect for home care
workers. There was overall confusion about what the expectations were
with regard to rate sufficiency, timing and process. Legislation to set
clear standards for the plans, providers and the State is required.
Currently, there is no common understanding on what constitutes an
adequate rate to cover a worker's wages and benefits. This legislation
would require DOH to set a minimum hourly base reimbursement rate, the
elements that are articulated by statute and determined by DOH. This
will help establish an objective standard against which to measure nego-
tiated rates. By articulating the elements of the rate that must be
accounted for by the department, this legislation would drive the rate
to a formula and bring clarity and predictability to the current proc-
ess. It would set objective expectations for providers, plans and the
State regulators.
The regional minimum hourly base reimbursement rate development process
should be informed by provider cost reports and Medicaid Managed Care
Operating Reports. This information should be available broadly and in a
Searchable format.
The regional minimum hourly base reimbursement rate would set expecta-
tions based upon agreed upon standards. The legislation would propose
two mechanisms to ensure that the minimum hourly base reimbursement rate
reaches the provider. For fully-capitated plans (mainstream managed
care, PACE, MAP), the State would apply to CMS for a state-directed
payment of minimum fee schedules for home care agencies and fiscal
intermediaries. Where there is no approved state-directed payment and
for Managed Long Term Care (MLTC) plans, which are not fully capitated,
the legislation would establish a reporting mechanism for plans where
they are paying less than the minimum hourly base reimbursement rate.
The plan's report must include a rationale for paying under the minimum
hourly base reimbursement rate; the impacted provider would also have
the opportunity to address the report in writing. This approach would be
paired with DOH collecting and publicly reporting this data on a regular
basis. Implementing these processes would bring visibility as to whether
there are patterns of unjustified and/or unfair behavior.
The bill would make exceptions, however, where the provider and a plan
mutually agree to enter into a value-based contract. Finally, the bill
would authorize the Comptroller to review contracts between plans and
providers to ensure compliance with regional minimum hourly base
reimbursement rates.
LEGISLATIVE HISTORY:
A7335A of 2023 and 2024, referred to ways and means / Same as S6963a,
amend and recommit to health.
FISCAL IMPLICATIONS:
No negative fiscal implications.
EFFECTIVE DATE:;
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
1112
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. PAULIN, REYES, WEPRIN, ROSENTHAL, SHRESTHA,
DINOWITZ, EPSTEIN, HEVESI, SIMON, STECK, ZINERMAN, GONZALEZ-ROJAS,
KELLES, SAYEGH, COLTON, SIMONE, SANTABARBARA, RAGA, STIRPE, BRABENEC,
LEVENBERG, BROOK-KRASNY, LUCAS, JONES -- read once and referred to the
Committee on Health
AN ACT to amend the public health law, in relation to regional minimum
hourly base reimbursement rates for home care aides
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 3614-f of the public health law is amended by
2 adding eight new subdivisions 5, 6, 7, 8, 9, 10, 11 and 12 to read as
3 follows:
4 5. (a) By the first of October next succeeding the effective date of
5 this subdivision, the commissioner shall establish a regional minimum
6 hourly base reimbursement rate for all providers employing workers
7 subject to the minimum wage provisions established in subdivision two of
8 this section. The regional minimum hourly base reimbursement rate
9 shall be based on regions established by the commissioner, provided that
10 for areas subject to section thirty-six hundred fourteen-c of this arti-
11 cle, each area with a different prevailing rate of total compensation,
12 as defined in that section, shall be its own region.
13 (b) For the purposes of this section, "regional minimum hourly base
14 reimbursement rate" means a reimbursement rate that reflects:
15 (1) a direct care related payment which shall reflect the total direct
16 care related costs for home care aides and other direct care related
17 staff necessary to comply with federal and state statutory and regulato-
18 ry requirements for such providers, and which shall include:
19 A. base hourly wage guaranteed home care aides pursuant to subdivi-
20 sion two of this section;
21 B. overtime costs;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03863-01-5
A. 1112 2
1 C. employee benefits, including both paid time off and supplemental
2 benefits or benefits as determined by collective bargaining agreements;
3 D. federal insurance contributions act;
4 E. Medicare;
5 F. federal unemployment tax act;
6 G. worker wage parity as provided by section thirty-six hundred four-
7 teen-c of this article, as applicable;
8 H. other payroll taxes;
9 I. fair labor standards act compliance;
10 J. New York state labor law compliance;
11 K. COVID-19 sick pay;
12 L. state unemployment insurance;
13 M. disability insurance;
14 N. workers' compensation;
15 O. travel time and travel reimbursement;
16 P. the metropolitan transportation authority tax; and
17 Q. related increases tied to base wages;
18 (2) a component to reflect operational expenses necessary to comply
19 with federal and state statutory and regulatory requirements for such
20 providers, and which shall include:
21 A. operational supervision and support, including but not limited to
22 nursing staff, home health aide supervision and team support; and
23 B. other operational support, including but not limited to quality
24 assurance and improvement programs, education and recruitment; and
25 (3) a component to reflect administrative and general operating
26 expenses which shall include rent and facilities management and business
27 support, including but not limited to information technology, human
28 resources, legal, compliance, finance, management, margin and communi-
29 cations.
30 (c) The regional minimum hourly base rate cannot be less than the most
31 current average fee for service county rates for level two personal care
32 service for each region as posted by the department for personal care
33 agencies or other providers delivering like services through other Medi-
34 caid programs.
35 (d) Once a regional minimum hourly base reimbursement rate has
36 been established under this section, the commissioner shall thereaft-
37 er annually adjust the regional hourly base reimbursement rate for
38 each region by a trend factor to reflect and accommodate any additional
39 labor law increases, changes or mandates.
40 6. For mainstream managed care and fully capitated Medicaid managed
41 care products for those dually eligible for both Medicaid and Medicare,
42 the commissioner shall submit any and all necessary applications for
43 approvals and/or waivers to the federal centers for Medicare and Medi-
44 caid services to secure approval to establish regional minimum hourly
45 base reimbursement rates and make state-directed payments through to
46 providers for the purposes of supporting wage increases.
47 (a) If approved by the federal centers for Medicare and Medicaid
48 services, directed payments shall be made to such providers of Medi-
49 caid services through contracts with managed care organizations where
50 applicable, provided that the commissioner ensures that such directed
51 payments are in accordance with the terms of this section.
52 (b) If the state directed payment is not approved, the provisions of
53 subdivision seven of this section shall apply.
54 7. For partially capitated managed long term care plans, or where
55 state directed payments pursuant to subdivision six of this section have
56 not been approved, the department shall require plans to justify
A. 1112 3
1 contracts offering deviations from the regional minimum hourly base
2 reimbursement rates in a report to the department. This report shall be
3 sent to the department, with a copy to the provider prior to the final-
4 izing of any contract, unless otherwise permitted by this section, with-
5 in five working days of the contract being offered to a provider with
6 rate deviations. Any report shall include a rationale for paying below
7 the regional minimum hourly base reimbursement rate, and the impacted
8 provider shall have the opportunity to respond to the report within
9 thirty days of filing with the department. The department shall compile
10 such reports and publish and post a summary of them semi-annually.
11 8. The commissioner shall establish actuarially sound regional
12 reimbursement rate ranges for Medicaid managed care organizations in
13 order to comply with this section. These ranges will reflect managed
14 care adjustments including but not limited to: (a) managed care plan
15 variations in utilizations from the regional utilization average; (b)
16 the impact of risk adjustment; and (c) premium withholds. Rate ranges
17 shall also account for quality incentives, volume, costs associated with
18 value-based arrangements, and reimbursement for individuals with hard to
19 serve needs.
20 9. Nothing in this section shall preclude providers employing home
21 health aides covered under this section or payers from paying or
22 contracting for services at rates higher than the regional mini-
23 mum hourly base reimbursement rate if the parties mutually agree to such
24 terms. Notwithstanding subdivision seven of this section, plans and
25 providers can also mutually agree to enter into value-based contracts at
26 a rate less than the regional minimum hourly base reimbursement rate.
27 10. The commissioner shall amend the model managed care contracts to
28 reflect the requirements of this section. In addition, the commissioner
29 shall post the managed care, certified and licensed home care services
30 agencies and fiscal intermediaries cost report data in a simple under-
31 standable manner on the department's website by the fifteenth of Febru-
32 ary second succeeding the effective date of this subdivision and annual-
33 ly thereafter.
34 11. The commissioner shall publish and post regional minimum hourly
35 base reimbursement rates annually, and shall take all necessary steps
36 to advise commercial and government programs payers of home care
37 services of the regional minimum hourly base reimbursement rates.
38 12. To ensure compliance with minimum wage increases, the comptroller
39 shall have the authority to review the contracts entered into between a
40 managed care organization and a licensed home care services agency,
41 fiscal intermediary, or any agency subject to the provisions of this
42 section to ensure that rates being offered are adequate and meet the
43 department's actuarial standards. The comptroller, in consultation with
44 the Medicaid inspector general, shall develop and promulgate a process
45 to ensure such audits comply with state and federal law to protect
46 proprietary information and contracts. In the event that the comptroller
47 finds evidence that managed care organizations are not paying sufficient
48 adequate rates, they will refer such instances to the department and the
49 Medicaid fraud control unit for enforcement. If the department or the
50 Medicaid fraud control unit chooses not to pursue action related to this
51 referral, it shall inform, in writing, the comptroller's office as to
52 the reasoning. Such reports, and the department's responses, shall be
53 public information and made available on the comptroller's website.
54 § 2. Severability. If any provision of this act, or any application of
55 any provision of this act, is held to be invalid, or to violate or be
56 inconsistent with any federal law or regulation, that shall not affect
A. 1112 4
1 the validity or effectiveness of any other provision of this act, or any
2 other application of any provision of this act which can be given effect
3 without that provision or application; and to that end, the provisions
4 and applications of this act are severable.
5 § 3. This act shall take effect immediately.
