Lawmakers left the 2015 session with a gnawing budget concern -- a federal retooling of the home and community-based care programs for senior citizens and people with disabilities had state costs spiraling out of control.
Updates released last week showed the problem is just getting worse -- the number of seniors taking advantage of the richer services has jumped 13 percent in the past year and the cost per case has jumped 25 percent.
The new caseload is projected to cost the state as much as $20 million more than budgeted, and the increased costs per case will tack on another $6 million from state coffers.
“This is a runaway program that we can in no way can sustain. Everyone in the state could be eligible,” said Sen. Jackie Winters, R-Salem. “It’s really hard because once you have that program, you go back to John Q. Public and say we’re going to cut you at your knees.”
Sen. Alan Bates, D-Medford, the chair of the committee that oversees the Department of Human Services budget, said the program suffered from a lack of sideboards and an effective tool to accurately assess client need. Under the old state-led program, clients were limited to $21,000. New federal rules don’t allow for a price cap like that, requiring Medicaid to pick up all of the person’s determined needs.
To combat the problem, the state has contracted with outside help to develop a better assessment tool, which DHS officials hope will allow them to disperse services more sustainably.
“As you apply the assessment tool, we expect the case costs per member will come under control,” Bates told The Lund Report.
The program changes have hit as more Baby Boomers enter retirement, and the legacy of the Great Recession forced more people to turn to the state for help. Bates said he believed the biggest problem was that the services being offered were too generous and go beyond what the clients actually need. He did not think that the people who had been approved for benefits were undeserving.
“Some will not be receiving as many hours of support -- natural supports will come back,” Bates said.
The K plan incentive program in the Affordable Care Act directs care for traditional Medicaid recipients closest to the individual’s home and aims to avoid costlier settings such as nursing homes. Oregon had already been the national leader in home and community-based care models, but the new federal program promised to pick up a greater portion of the Medicaid tab if Oregon complied with its rules. The state expected the program to save general fund money while providing better benefits. Former Gov. Kitzhaber called it a “win-win-win.”
Oregon was the second of six states to adopt the K plan but according to Department of Human Services spokeswoman Christine Stone, each state’s plan offerings vary and Oregon’s is more generous than California, for example.
“DHS is now working with a contractor to validate the functional needs assessment instrument to ensure that the tool accurately reflects the needs of adults and children with intellectual and developmental disabilities,” Stone said. “As part of this effort, we will also review how the assessment is used to identify service amounts.”
New Federal Labor Rules
State lawmakers aimed their barbs at the federal government over another mandated cost increase -- new regulations from the U.S. Department of Labor that require the state to pay home care workers at least minimum wage for all hours worked and require overtime if an employee works more than 40 hours a week.
DHS has responded so far by limiting the hours a client can receive from a single worker to 50 hours a week -- although it has not limited how many hours an employee may work, and some employees put in 70 to 80 hours a week.
The high number of hours raised serious questions about the quality of care those overworked employees might be giving to Oregon seniors. Rep. Duane Stark, R-Central Point, also pointed out the backward approach of preventing a senior from getting 51 hours from one worker, but allowing a homecare worker to serve 30 hours with one client and 40 hours with another. “Why are we limiting the client instead of the provider?” he asked.
“It’s just a first step,” said Lilia Teninty, the director of the Developmental Disabilities Division. “That will need to be bargained.” She added that the state had not historically tracked the overall number of hours of its workers, something she said they will begin doing. Traditionally, the state has viewed the client as the employer, even as the state conducts payroll, negotiates wages and benefits and ultimately funds the Medicaid-based program in partnership with the federal government.
Bates was worried that forcing clients to deal with multiple workers could cause their care to deteriorate, and ultimately make home care unworkable for them.
“This is the kind of thing that ruins the program. … It could lead to people leaving their homes,” Bates said at a committee hearing last week. “It’s typical federal bureaucracy looking at something and not understanding what’s really going on.”
The state’s responsibilities under the new regulations are not exactly news -- Oregon has had at least two years to prepare. In 2007, a unanimous Supreme Court decision in a home-care case held that the Labor Department had the authority to assign home care workers the same rights as any other worker. In 2011, President Obama instructed the Labor Department to issue rules to do just that. The rules were issued in 2013, to take effect on Jan. 1, 2015.
By delaying action, the state appears to be pinning their hopes on the U.S. Supreme Court to delay and eventually overturn the new rules, despite a unanimous appeals court ruling against their position on Aug. 21. Barring a stay from the high court, the rules shall take effect next Tuesday.
The outrage of state politicians over new federal overtime rules for home care workers and the state’s ability to afford the increased cost is undermined by a new raise that the state bargained with the Service Employees International Union Local 503, raising hourly wages up to $15 from $13.75. After years of working with wages stuck at $10.10 an hour, they earned a large wage increase in 2013, followed by this smaller one in negotiations this summer.
Bates defended the $15 an hour wage, saying he was concerned about turnover. “I’d much rather increase wages than offer overtime. I think home care workers have been underpaid for years,” Bates said. “It’s hard, physical work. It’s not just taking people to the supermarket.”
But a higher wage, however justified, is a choice the state has freely made. Paying at least minimum wage and paying for overtime is not something in the state’s control, and an essential worker’s right, according to the position of the Obama administration.
