DOH Finalizes Minimum Wage Guidelines

The Department of Health (DOH) has finalized the Minimum Wage Fiscal Policy/Implementation Guideline document that governs how managed care plans will distribute Medicaid minimum wage funding to personal care and home care providers. The state will increase the regional managed care payment to reflect additional funding and apply risk adjustment. Plans will be expected to distribute the additional funding to supplement their contracted reimbursement rates with providers to allow providers to meet appropriate statutory obligations (including the direct salary costs and related fringe benefits of minimum wage and wage parity amounts).

For Partially Capitated Managed Long Term Care (MLTC) plans in New York City (i.e., those plans whose members account for the majority of personal care and home care aide hours provided in the state), the additional funding was calculated based on $1.33 per projected personal care/home care aide hour. While plans are required to distribute all of the funding related to the minimum wage, plans may allocate total minimum wage resources based on provider network needs. Plans must report on minimum wage funding payments on a quarterly basis, but it is the Department of Labor that will be responsible for ensuring that providers are paying workers in compliance with minimum wage requirements.

DOH recommends that plans send contract amendments reflecting the additional payment amounts to providers no later than Nov. 15, 2016, and that these amendments specify that the increase is to supplement existing contract rates in order to enable the provider to fund the appropriate statutory increase to the minimum wage and to enable the provider to remain compliant with wage parity. DOH will convene a stakeholder meeting to agree upon an attestation process and to provide further details on compliance and enforcement issues. The guidance document is available here.

DOH also issued a policy document on minimum wage rate setting and reconciliation indicating that home care providers will be required to complete a minimum wage survey in mid-December to help validate the current funding estimates. All providers will be required to complete a minimum wage survey in March 2017 to allow the state to estimate minimum wage resource needs going forward. Additionally, providers will be required to submit supplemental cost reports to verify that additional resources were used appropriately. Based on this reporting, the state intends to make necessary reconciliations (up or down) to Medicaid reimbursement rates. Providers should note that minimum wage funding is targeted only to Medicaid providers and only for costs related to serving Medicaid recipients. The policy document is here.

Contacts: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841 or Cheryl Udell, cudell@leadingageny.org, 518-867-8871