Home health workers say proposed Medicaid rate hikes fall short

CT Examiner – Monday, March 17, 2025
By Sophia Muce

Home health care workers warned that proposed Medicaid reimbursement rate increases may not be enough to address ongoing staffing shortages or maintain care options for low-income patients.

“We truly are being left out in the cold,” said Tracy Wodatch, president and CEO of the Connecticut Association for Healthcare at Home.

Due largely to enrollment increases and budgetary constraints, the state has not implemented any significant increase to Medicaid reimbursement rates for providers since 2007.

Over the past few weeks, community health center employees, representatives for major medical institutions and private practitioners struggling to provide care for low-income patients backed a new bill passed by the state’s Human Services Committee that would phase in increases over the next three years in accordance with a two-part study of reimbursement rates.

The study, which was commissioned by the legislature in 2023, compared Connecticut’s Medicaid reimbursement rates for various services to those in Maine, Massachusetts, New Jersey, New York and Oregon.

However, Wodatch told CT Examiner that the study failed to compare the rates for medication administration, which she said accounts for more than half of Medicaid home health expenditures. Given the omission, she said the bill is “nowhere near” what the home health care industry needs to catch up to surrounding states and other Connecticut providers.

State Sen. Matt Lesser, co-chair of the Human Services Committee and a key proponent of the bill, acknowledged that the study is not “perfect” and advocated for increased assistance for home health care workers.

“You don’t want to have just anybody taking care of your loved one in the home. And if you’re going to have a quality workforce, you have to pay them a competitive wage,” he said.

But the likelihood of an immediate industry-wide reimbursement increase has been diminished by competing priorities and uncertainty at the federal level.

A struggling industry

Composed of homemakers, companions and licensed medical providers like nurses, social workers, and hospice workers, Connecticut Association for Healthcare at Home members said the pandemic made clear that home health care is a critical service for low-income residents.

However, providers said the increased costs have pushed both licensed and unlicensed workers to surrounding states and Medicaid recipients to in-patient institutions.

Chris Pankratz, chair of the association’s Government Relations Committee, said his agency, Masters in Home Care, primarily served Medicaid recipients when it opened in 2014. But after the reimbursement rate for behavioral health medication administration was cut by 15% in 2016, he said those enrolled in the Medicaid program now make up just 1% of his clientele.

“If we hadn’t made a very conscious and deliberate shift to focus on, regrettably, patients with a certain sort of insurance –– which, in this case, was Medicare –– we wouldn’t have stayed in business,” he said.

Of the 90 licensed home health agencies in Connecticut, Wodatch said less than 60 provide services for residents on Medicaid.

Pankratz said Medicare and private insurance fee schedules help his agency offset Medicaid service costs, but noticed that some licensed employees avoid Medicaid cases due to lower pay.

According to data provided by Day Kimball Health At Home, a home care service provider in northeast Connecticut, reimbursement rates for speech therapists drop from $193 under traditional Medicare to $86.58 under Medicaid, from $179 to $86.58 for occupational therapists and $160 to $96.35 for licensed practical nurses.

“We pass most of that increase off to the employee,” Pankratz said of the higher rates.

Of the 40,818 people served by the state Department of Social Services in northeast Connecticut this year, almost 78% are enrolled in Medicaid. Jennifer LeDuc, director of quality and operations at Day Kimball Health At Home, said she has seen many low-income patients in her area suffer as the number of agencies and workers willing to take on their cases dwindles.

LeDuc said Kimball’s program, which serves about 18 towns in the region, had a “very robust” Medicaid population 10 years ago, but cut back its services to stay afloat as staff left for higher-paying roles in Massachusetts.

“We’re approaching a health care desert if we’re not careful here in the northeast corner,” LeDuc said.

LeDuc said the program’s full-time staff has shrunk since 2015, with nurses decreasing from 21 to 13, home health aides from 19 to four, and medical social workers from two to one.

While the state’s study did not compare medication administration rates, it found that Connecticut Medicaid pays home health care providers an average of 71% of what the comparison states pay their providers for speech therapy and physical therapy visits. Department of Labor statistics also noted that home health and personal care aides earned an annual median salary of $37,440 in early 2023 in Worcester, Massachusetts, compared to eastern Connecticut’s $36,041.

Despite staffing shortages, LeDuc said Day Kimball Health At Home, which was acquired by Assisted Living Services, Inc. in 2023, has tried to take on low-income residents who have been turned away by other strained programs in the area.

She recalled a time in which a Medicaid user in need of wound care called her office “in angst” as he was unable to receive care from a nearby hospital.

“He said, ‘I’m a human being, and no one wanted to help me,’” LeDuc told CT Examiner.

Mario D’Aquila, chief operating officer of Assisted Living Services, Inc., said he has struggled to retain non-medical home health care workers who are willing to work Medicaid cases.

According to the Home Care Association of America, Connecticut’s reimbursement rates for unlicensed personal care attendants, homemakers and companions are about $17.28 lower than Rhode Island, $16.20 lower than Massachusetts’ and $10.03 lower than New York.

D’Aquila said many unlicensed workers at his company, which hired almost 500 caregivers last year, are instead choosing to work for private-pay clients or those enrolled in Connecticut’s veteran health care program.

“As we hire caregivers, I hear this all the time when they come in: ‘I’m happy to work for you, but please don’t put me on a state case,’” D’Aquila said.

Ad-hoc funding

Under the Human Services Committee’s bill, all Medicaid rates would be no more than 25% lower than Medicare rates for the same services by June 2028. After that, the bill states that the rates must be adjusted every year.

In her testimony to the committee, Wodatch requested a series of hikes which she said would bring parity to the home health care industry. They include 4.2% retroactive wage increases, 10% annual rate increases from 2025 to 2029, a return to the 2016 behavioral health medication administration rate for licensed providers, and a 13% rate increase for 2025 and 2026 followed by a 10% annual increase from 2027 to 2029 for homemaker and companion providers.

“We’re asking for a rate from 2016. That doesn’t sound like it’s a very smart ask but, in reality, it would at least right our ship a little bit,” she said.

Home health care leaders are not the only providers calling for sector-specific changes. The Community Health Center Association of Connecticut petitioned the state to adjust Federally Qualified Health Centers’ rates.

But Lesser, a Democrat representing towns in central Connecticut, told CT Examiner that the committee’s bill was created to increase rates across most health care fields, ending a practice of haphazard adjustments.

“Rate adjustments have been made on an ad-hoc basis based on who can hire the best lobbyists … and, to us, that seems like the worst way to make these decisions,” Lesser said. “So what we’ve tried to institute is a rational, fair process that takes politics out of the equation and focuses on the actual cost of care.”

Ad-hoc changes approved by the federal Centers for Medicare & Medicaid Services last year included increases for select behavioral health services, chemical maintenance clinics and ambulance providers.

Lesser said he largely agrees with Wodatch and would like to return some reduced home health care rates back to 2016 levels. However, he noted potential funding limitations at the federal level, which typically covers more than half of Connecticut’s Medicaid reimbursements.

President Donald Trump’s administration has claimed it would not cut Social Security, Medicare or Medicaid benefits, but House Republicans have previously estimated they could save up to $2.3 trillion by making cuts to the Medicaid program.

Lesser said he would support the legislature’s phased-in increases, along with bills proposing to expand home care options and allow those providing in-home care to their spouses to collect compensation.

“We could adopt the fetal position and just say, ‘Please don’t hurt us.’ But we have a job to do, and we’re going to do the best job we can,” he said.

Wodatch said the association has scheduled meetings with U.S. Rep. Rosa DeLauro, D-Conn., and State Comptroller Sean Scanlon to discuss how federal funding cuts could impact the home health care industry.

Wodatch has also called on Connecticut to loosen its fiscal guardrails and direct a portion of its more than $4 billion rainy day fund to increase reimbursement rates. Along with allowing patients to remain at home while they receive care, the home health care providers said investing in their industry would allow the state to save money by keeping low-income residents out of costly institutions.

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