Insurance companies could pocket home care salaries, agencies say

ALBANY — Hundreds of millions of dollars in public funding set aside to raise the wages of home care workers will likely end up in the pockets of private health insurance companies, industry experts say.

The money is intended to help end New York nation’s worst home care shortage. The funding is for a minimum wage increase of $3 an hour – $2 this year, $1 more next year. Workers and advocates are calling on the state to make insurance companies pay their fair share.

But private insurance companies, which negotiate reimbursement rates with home care agencies, are offering wage increases as low as 20 cents or 50 cents an hour, depending on offers from two shared insurance companies. with the Times Union with the company name redacted.

According to Bryan O’Malley, executive director of the Consumer Directed Personal Assistance Association, discussions with insurance companies can hardly be called “negotiations” because home care agencies have little leverage.

“The only way to force any type of negotiation is for the Department of Health to get involved,” which is rare, O’Malley said.

According to a survey conducted last week by the New York State Health Care Providers Association, 87% of home care agencies say no insurance company has communicated about the rate change. . Of those who heard from insurers, 61% said they had been offered reduced rates. Most respondents said insurance companies were actively trying to prevent even discussing a new rate.

Increases in home care are set to take effect on October 1 – so if the state doesn’t immediately intervene, private insurance companies could keep 80% of the money intended for low-income home workers, according to the defenders.

The added cost to home care agencies could trickle down to workers in the form of reduced hours and overtime pay and consumer opt-outs with some insurance plans, O’Malley said.

A spokesperson for the state Department of Health said insurance companies or managed care organizations cannot retain state funds due to federal “medical loss reporting” requirements. “. The medical loss rate refers to the percentage of premium dollars a health plan spends on medical claims and quality improvements compared to money spent on overhead.

“The department has advised plans that they should begin coordinating with their vendor network to update the required vendor contract on August 16 when we have delivered updated hourly amounts and rate schedules,” said Monica Pomeroy. “Additionally, on September 12, the department hosted a second webinar where we reiterated this information with MCOs and vendors.”

The health department will continue to reiterate its previously issued guidance with health plans to ensure legal compliance, she added. Providers are urged to contact their contact at the Ministry of Health if they believe the plans are unreasonable.

“The new hourly values, which include all elements of the home care worker’s salary, are sufficient and actuarially certified to meet the state’s new legal requirement as of October 1, based on all interactions and contributions we have had to date since both MCOs and vendors,” said Pomeroy.

The New York Health Plan Association, a member organization of the state’s health care providers, released a statement Thursday calling on the state to “finalize rate packages to clarify the process” for allocating wage increases.

“Fair wage funding should be used to increase worker wages, and health plans have worked diligently to adjust their rates to providers to reflect changes included in the state budget for FY23” , NYHPA President and CEO Eric Linzer said in the statement. . “Unfortunately, in some cases, the funding made available to health plans is not sufficient to support the scale increases that providers are seeking, while in others, some providers are not seeking the funds to workers but rather for profit.”

To note: An earlier version of this article incorrectly included information about group homes run by the State Office for the Developmentally Disabled, which does not have home care staff.

Kristan F. Talley