On March 3, New York Senator Rachel May introduced legislation (HERE) that, if passed into law, would require providers to increase their caregivers pay by 150%. Specifically, the proposed bill requires home care providers (including FIs) to pay their direct care staff 150% of the higher of (a) the applicable minimum wage rate for the region or (b) any “otherwise applicable” wage rule. This proposal follows the “Fair Pay for Home Care” movement which, when it was originally introduced, was seeking to raise the annual compensation of home care workers to $35,000/year. However, the bill proposed by Senator May would raise the base rate of upstate aides from, currently, $12.50/hour to $18.75 and effectively result in an annual salary of $39,000 based on a 40-hour workweek, without overtime. There is no explicit exception for New York City or wage parity-covered providers, and thus it is unclear if this increase of 150% would apply in those regions of the State. Notably, Senator May is also proposing to increase the benefit portion of wage parity for New York City from $4.09 to $4.84/wage parity hour, and for Westchester/Long Island from $3.22 to $3.89/wage parity hour.
Under Senator May’s proposal, the Commissioner of Health would set regional minimum rates of pay based on cost report data. Per the proposed legislation, a “Fair Pay for Home Care Fund” would be established to subsidize the Medicaid payment rates when necessary. As with wage parity, providers and managed care organizations would have to certify to compliance with wage payment requirements.
At this time, Senator May’s bill is just a proposal, but it is gaining the support of many Democrats in the Legislature. The providers, however, are rightfully concerned. While all providers want to pay higher wages to their employees, practically speaking, home care providers have been subject to these types of laws and have been “burned.” The Wage Parity Law, New York minimum wage increases and the FLSA overtime changes are just some examples of mandatory wage changes that were imposed on providers without adequate reimbursement and support. Another problem is that Senator May’s bill does not address the corresponding increase to overtime, payroll, workers’ compensation and unemployment that providers would have to pay should their workers’ wages be increased as proposed. Further, as currently proposed, the wage increases would apply to home care cases that are funded by Medicaid. The proposed bill does not address what compensation would have to be paid to aides on private pay, Medicare or commercially-funded home care cases.
Having experienced the State’s backlash from when the Medicaid budget “exploded” due to minimum wage and wage parity mandates that were imposed on them, providers are concerned about similar repercussions should Senator May’s proposal become a law. The Medicaid budget would certainly once again “explode” if a 150% base wage increase were implemented. Once that happens, providers are concerned that they would be blamed by the State once again for increasing the State’s Medicaid budget. Reimbursement cuts, consolidations, RFOs and moratoriums were just some examples of how the State tried to respond to and control explosive home care growth in previous years, and that “growth” was mostly due to minimum wage and wage parity mandates. The State would surely employ the same tactics to control home care growth should Senator May’s proposal become law, and providers are concerned about those types of repercussions on their businesses.
While this is still a proposed law, Senator May’s proposal actually has a chance of becoming a law this budget season. Governor Cuomo would have ordinarily, most certainly, vetoed a bill like this, however, his political influence has been crippled by the recent harassment accusations. But even without those scandals, Cuomo was going into this year’s budget process with less influence than usual because the Legislature is controlled by a Democratic “supermajority.” Thus, the “Fair Pay” movement to increase home care workers’ wages may prevail.
As with many other outstanding issues, we will know the fate of Senator May’s proposal on April 1.