Commentary

If General Assembly doesn’t act, home care agencies could be hit hard

March 4, 2022 12:03 am

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By Tim Hanold

The COVID-19 pandemic fundamentally shifted our perception of health care and upended its delivery. While there was a necessary focus on hospital capability, too often services in the home failed to receive the critical attention it deserved. As hospitals reached capacity, home health agencies met the demand as the most cost effective and preferred setting of care while continuing to address long-term health care needs.

These same home health care agencies are now on the brink of a serious issue. 

As the 2022 General Assembly moves toward budget reconciliation, Virginia lawmakers will make an important determination about the future of home health care in the Commonwealth as they decide whether to increase Medicaid reimbursement rates for home care to fair and sustainable levels.

Virginia’s reimbursement rate is currently $17.22 an hour. The last 12.5 percent reimbursement increase in 2021 was unfortunately not enough to keep pace with the 26 percent increase in wages of personal care aides in 2021. (The nationwide mean hourly wage of personal care aides was $13.49 in 2020, according to the Bureau of Labor Statistics) Current rates are so low, home care agencies may struggle to pay caregivers, provide benefits, or procure training that increases competency and access to a career ladder which allows home care providers to move from personal care attendant to registered nurse. 

However, this decision is about more than just dollars and cents, it is a proclamation on the viability and access to care in the home for the Medicaid population. In short, if Medicaid reimbursement rates are not adequately increased, home care agencies will no longer be able to provide these services to Medicaid patients. 

The math is simple, but the impact is not. The support of a fair increase will keep tens of thousands of Virginians employed and provide access to necessary home care services to the most vulnerable Virginians. 

The data on this is compelling and clear. 

The provision of in-home care can be a 95-98 percent cost savings over a traditional hospital stay. Additionally, specialized health care in the home promotes cost avoidance by keeping care recipients out of emergency rooms and long-term nursing homes, creating two dollars of savings for every dollar invested in the home. 

Patients also prefer to receive healthcare services in their home as it provides flexibility, dignity, and extended independence. Moreover, many recipients of in-home care report higher levels of satisfaction with at-home care delivery than in other healthcare settings.       

As a result, the demand for home care is rapidly expanding. This is particularly true given the over 65 population is projected to grow from 56 million in 2020, to 73 million in 2030.  With this growth is the opportunity to create and sustain purpose-driven work for many as the need for home health and personal care aides are projected to grow much faster than the national average for all occupations. The decision to not support an increase in Medicaid reimbursement rates places current and future jobs at risk in Virginia. 

It will also result in the commonwealth’s most vulnerable population losing access to care and increase the likelihood they fall through the cracks of an already fractured health care system or overwhelm existing nursing homes. An investment in home health care reinforces the safety net for the commonwealth and provides a fiscally responsible pathway alongside clinically superior and socially conscious care. 

If the General Assembly overlooks the importance of increased funding for Medicaid reimbursement rates for home care it will be financially unsustainable for home health care agencies to continue providing services to Virginia’s Medicaid recipients. The result could cost Virginia jobs, access to needed care and compromise the stability of our communities. 

Tim Hanold is the CEO of Care Advantage, Inc. – one of the largest privately-owned home health care companies in the Mid-Atlantic.

CORRECTION: This post has been updated to correct Virginia’s Medicaid reimbursement rate. An outdated number was originally used.

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