After years of working with state policymakers to address workforce challenges, senior living organizations in Wisconsin said they are encouraged by the announcement of a minimum fee schedule for home- and community-based services.
Last week, Wisconsin Gov. Tony Evers (D) announced he was directing the Wisconsin Department of Health Services to invest $258 million in funding from American Rescue Plan Act funds already designated for HCBS to create and fund a minimum fee schedule, effectively raising wages for direct care workers and providers serving older adults and individuals with disabilities.
The move aligns Wisconsin with 20 other states that have a minimum fee schedule for HCBS providers, including neighboring states Illinois, Iowa, Minnesota and Michigan.
Funding decisions like this one typically are addressed through the state budget deliberation process. But Wisconsin Health Care Association / Wisconsin Center for Assisted Living CEO Rick Abrams told McKnight’s Senior Living that if the regular process had been followed, this “important issue” wouldn’t have been discussed until 2025 as part of the 2025-2027 state budget deliberations.
“The situation in the field cannot wait; we have assisted living centers that care for Family Care recipients closing,” Abrams said. “We have other assisted living centers requesting of their managed care organizations that residents be relocated into more care intensive environments because current payment levels are inaccurate to meet the needs of those residents.”
Family Care is Wisconsin’s Medicaid long-term care program.
The minimum fee schedule, Abrams said, will help to immediately remedy both situations. He added that Family Care continues to be a “people issue” and not a political one, with strong support from the administration and legislative leadership on both sides of the aisle.
Michael Pochowski, president and CEO of the Wisconsin Assisted Living Association, called the funding announcement a “lifeline” for many Wisconsin assisted living providers, saying that it will have “huge” effects on provider financial stability and quality care.
For assisted living providers participating in the state’s Family Care program, it means that wage assumptions used to calculate provider reimbursement rates for direct caregivers and staff members will increase from $13.02 per hour to $15.75.
“While the funding is still lower than what providers experience in actual costs and wages, this additional funding is a major step in the right direction and will help with stemming the tide of providers dropping out of the Medicaid Family Care program or having to close facilities and programs due to financial losses and the challenge of hiring-quality staff,” Pochowski said.
LeadingAge Wisconsin said that the initiative emphasizes the importance of paying caregivers a competitive wage. The organization called the investments “crucial” in the face of significant worker shortages that were worsened by the pandemic and a rapidly aging population.
“This immediate infusion of resources will undoubtedly retain some quality providers who would otherwise be forced to make difficult decisions about leaving the field or reducing their capacity to provide care to vulnerable Wisoncinites,” a LeadingAge Wisconsin spokesperson said in a statement.
Marissa Janke, campus administrator at Eagle Crest North, a Wisconsin continuing care retirement / life plan community, said she is hopeful that the move will allow greater transparency with rates and expedite moving residents through the care continuum.
“Too often, we still struggle with residents staying in a nursing home while we negotiate with Family Care for a rate acceptable for our assisted livings,” Janke said. “This fee schedule will hopefully allow for a smoother process and less difficulty in adequate reimbursement being delivered.”
Effective Oct. 1
The fee schedule, which will go into effect Oct. 1, will establish minimum amounts that managed care organizations must pay providers for certain adult long-term care services. The schedule applies to services that do not have specific rates in fee-for-service Medicaid, including community-based residential facilities such as assisted living communities; adult family homes; residential apartment complexes; and home care services. Prior to the schedule, managed care organizations established rates through contracts with providers.
The state DHS estimated that the funding and fee schedule would provide a 40.5% rate increase for most services provided at residential facilities and a 15% rate increase for most supportive home care services.
“I declared 2024 the Year of the Worker in Wisconsin to continue focusing on our efforts to address our state’s generational workforce challenges, chief among them efforts to bolster our healthcare and direct care workforces,” Evers said in a statement. “While this is an important step in helping us be able to recruit, train and retain talented folks in our healthcare workforce, it’s going to be critical for these investments to continue in our next biennial budget so we can address chronic challenges and continue building a strong, stable healthcare industry for the future.”
By establishing a minimum fee schedule, Evers said he is ensuring that the department can require managed care organizations to pass along rate increases to providers, ensuring stability and consistency in revenues and expenditures.
