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Increasing Wages for Home Health Aides, Part 2: New York's Public-Private Collaboration Points the Way to a Solution

I look forward to continuing positive results as we address the problem together, in a way that ensures that the comfort, security and reassurance of a home health aide's daily care is available for all of our loved ones, if and when they need it.
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Just about everyone knows someone who has benefited from the companionship and life assistance of a home health aide (HHA). And we all want to see these dedicated workers get paid a wage they can live and thrive on. The question is, how do we make this work?

By "we," I mean the home care industry and America's federal and state governments. Last September, I wrote a blog post in this space talking about the unintended consequences of the U.S. Department of Labor's decision to extend the Fair Labor Standards Act (FLSA) to HHAs--a group that had long been exempted from this legislation. Under this new arrangement, all HHAs nationwide must be paid at least the national minimum wage of $7.25 per hour. The revised regulation also raises the overtime pay rate for HHAs nationwide, mandates that their travel time be strictly reimbursed, and requires that the working hours of live-in HHAs be carefully documented.

Overall, the goal of this action was to increase the compensation that HHAs get for the important work they do. This is a goal that my organization, the Visiting Nurse Service of New York (VNSNY), applauds, and one that we've been working toward as well. But as my previous post pointed out, since the vast majority of HHA hours are reimbursed either by Medicare or Medicaid, the federal government and the states also have to step up and make more funds available to cover the increased cost of these wages.

The new Department of Labor regulations have been in effect since last October. The home care industry is now petitioning the U.S. Supreme Court to review the legality of the revised FLSA regulations, and is also in discussions with Medicare and Medicaid officials on the federal and state level about adjusting reimbursement levels to account for the increased costs due to the regulatory changes. These discussions have had an added urgency in New York State, where Governor Andrew Cuomo and state legislators agreed earlier this year to raise the state minimum wage from $10 to $15 per hour over the next several years. (Additionally, in a separate action, New York City Mayor Bill de Blasio just implemented a $15 per hour minimum for workers contracted by the city.)

This increase in the state minimum wage will hit New York's home care agencies harder than anyone else, costing our industry an estimated $1.1 billion in increased wages over the first two years of the phase-in. Fortunately, the ongoing conversation between industry representatives, state legislators and the governor's office is producing the outlines of a solution: The state recently agreed to make additional Medicaid funds available for an increase to $11 per hour for HHA pay, and has indicated it will not count this increase against the state's overall Medicaid cap--this needs to be assured for future planned increases as well

While the exact numbers are still evolving, New York State has indicated its willingness to distribute up to $218 million in extra Medicaid payments over the next two years for increased health care wages, with most of that going to home care agencies. The state previously had agreed to contribute an additional 34 cents per hour in Medicaid funding to cover the impact of the revised FLSA regulations, as well.

Will these additional funds be enough to fully cover the boost in HHA wages and also keep home care agencies on a solid footing? The estimates of financial analysts suggest it may not be, but it's a good start. Most importantly, this development shows that all the various stakeholders in this issue--which include the state's home care agencies, the healthcare workers' union, different groups of state legislators, the New York State Department of Health, and the Governor's office--are willing to work together in good faith to craft a solution that works for everyone, including our HHA workforce, the agencies that employ them, and the patients they serve.

In this time of "us versus them" politics, it is heartening to see New York's private and public sectors working together in such a constructive way. I look forward to continuing positive results as we address the problem together, in a way that ensures that the comfort, security and reassurance of a home health aide's daily care is available for all of our loved ones, if and when they need it.