MEMORANDUM IN OPPOSITION
FOR IMMEDIATE RELEASE: MAY 20, 2024
Re: S.4791-B (Rivera) — AN ACT to amend the public health law, in relation to rates of payment for certified home health agencies.
This legislation, S.4791-B, would require a 10 percent increase in Medicaid rates paid to certified home health agencies (CHHAs), and would require the establishment of a minimum benchmark rate to be paid by all Medicaid payors. The legislation would also require the minimum benchmark to be “considered” by all other third-party payors. Health plans are aware of the critical importance of CHHAs to the overall long term supports and services delivery system, and understand the need for providers in the delivery system to be paid adequate reimbursement, but oppose the establishment of minimum benchmark rates.
Medicaid managed care plans exist to efficiently and effectively coordinate care across an array of services in a benefit package, and are paid a capitated rate on a per member per month basis, adjusted for the relative acuity of the population each plan serves. The managed care structure allows for variability of payments among providers for a number of valid reasons, including geographic coverage of a provider, or that a provider only serves a small number of a plan’s members, or that a provider consistently accepts a plan’s harder to place members. Plans may also incentivize certain providers with higher rates if those providers are willing to partner in specific quality improvement initiatives.
This legislation disregards the managed care market’s ability to determine appropriate rates between plans and providers. Setting a benchmark rate and mandating it as a minimum for all providers will inevitably result in overpayment to some providers and underpayment to others, and could also result in existing rates to some providers being reduced, as plans try to balance minimum rates with their own capitated payments and quality improvement priorities.
Moreover, the recently finalized federal Centers for Medicare and Medicaid (CMS), “Ensuring Access to Medicaid Services” rule (also known as the home care 80/20 rule) will already require DOH to reevaluate the home care rate structure. It is unclear whether this legislation could conflict with the requirements of the new federal rule.
While we support adequate reimbursement for providers, and adequate plan premiums to cover those costs, for reasons outlined above, HPA opposes S.4791-B.