On April 27, 2023, the Centers for Medicare & Medicaid Services (CMS) released a Notice of Proposed Rulemaking entitled Ensuring Access to Medicaid Services (Proposed Rule) which would, among other things, establish requirements for the amount of Medicaid payment going towards home care worker compensation.

The CMS Fact Sheet explains that home and community-based services require hands-on, in-person services delivered by direct care workers, but recent direct care worker shortages have had a significant impact on Medicaid beneficiaries’ access to services. In an attempt to address these direct care workforce shortages, CMS proposes to require that at least 80 percent of Medicaid payments for homemaker, home health aide, and personal care services be spent on compensation for direct care workers, as opposed to administrative, overhead, or profit expenses.

Additionally, the Proposed Rule would require states to report the percentages of payments spent on compensation for direct care workers on an annual basis and would also require states to publish the average hourly rate paid to direct care workers every other year. The rule would further require that an advisory group composed of direct care workers, beneficiaries, and other interested parties be established to consult with the state regarding payment rates for direct care workers.

If the Proposed Rule is adopted, these requirements would take effect four years after the effective date of the final rule. According to the Proposed Rule, these requirements reflect the stated objective of mitigating direct care workforce shortages and improving Medicaid beneficiaries’ access to services.

Other sections of the Proposed Rule seek to:

• Establish new approaches for oversight, monitoring, quality assurance, and quality improvement;

• Improve person-centered service planning and incident management systems;

• Require states to establish grievance systems for fee-for-service home and community-based service programs;

• Require states to report on waiting lists in section 1915(c) waiver programs; service delivery timeliness for personal care, homemaker, and home health aide services; and a standardized set of quality measures; and

• Promote public transparency by requiring public reporting of quality, performance, and compliance measures.

Needless to say, the Proposed Rule has attracted significant interest among providers of home and community-based services who should continue to closely monitor the progression and any revisions to the Proposed Rule. The 60-day comment period for the Proposed Rule ends on July 3, 2023. Anyone interested in submitting comments or reviewing the Proposed Rule in its entirety should visit the Federal Register.