Kim Mulford

@CP_KimMulford

Home health care firms warn low pay, tied to reimbursement rates, threatens industry

State bill to boost minimum wage could help and hurt firms

Aides struggling to make living on low wages

WATERFORD TWP. – Mike Pollock worries constantly that he will lose the home health aides who help him care for his wife, Kathy.

Five days a week, Lucy Villalona tends to the 63-year-old, who is totally dependent and partially paralyzed from a brain tumor and two strokes. Another aide, Alma Dobbs, takes over on Saturdays.

"The bottom line is that I can't do this without them," Pollock said. "People like me who take care of their spouses — who save the federal government almost $500 billion a year — cannot take care of their spouses ... without the help of home health aides. We can't do it."

Home health care agencies warn that such personal assistance in New Jersey is in jeopardy, not just for low-income patients, but for anyone who is disabled and wants to remain at home. They point to low wages, an employee shortage, unfunded regulations, and declining or stagnant reimbursement rates paid by the managed care companies administering the state's Medicaid program.

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Agencies typically pay home health aides between $8 and $10 an hour, a wage employers believe is too low to attract and retain good employees. But those same employers say they can't afford to raise salaries.

A bill backed by Sen. Stephen M. Sweeney, D-Gloucester, to increase the state's minimum wage to $15 an hour could simultaneously be the best and worst thing to happen to the home health care industry, said David Totaro, chairman of the Partnership for Medicaid Home-Based Care and chief marketing and government affairs officer for BAYADA Home Health Care, Inc. in Moorestown. About a third of its home care clients are enrolled in Medicaid.

"Most home care companies in New Jersey today are operating this program at very thin margins," Totaro said. Low reimbursement rates already have forced some agencies to fold or merge with larger companies.

"We have seriously considered whether we have a long-term future in that program," Totaro added.

The state's managed care companies negotiate reimbursement rates directly with providers, and those rates aren't public information, said Nicole Brossoie, spokeswoman for the N.J. Department of Human Services.

New Jersey's home care reimbursement rate for new Medicaid patients who aren't yet enrolled in a managed care company's plan is $18 an hour, a rate that applies only to a scant few.

Associations representing agencies report Medicaid reimbursement rates ranging between $13.80 and $15.50 an hour. That barely covers agencies' costs to hire, train and supervise employees, argued Frances Pagan, who serves on the board of the Home Health Services and Staffing Association of New Jersey in Parsippany. Medicaid no longer reimburses agencies for assessments by a supervising nurse, for example.

"We are regulated in so many ways, and it costs us money to continue to run," Pagan said.

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The state's Medicaid managed care companies also foresee a need to increase spending, if the state "materially" raises the minimum wage.

Wardell Sanders, president of New Jersey Association of Health Plans, said such a raise would "trigger both a need for a Medicaid MCO to review rates paid to its provider partners and for the state to review the rates paid to MCOs to ensure continued access to quality care."

Access already is an issue, agencies contend. Many patients who need assistance at home receive only a couple hours of personal care a day, and some aren't able to get any at all because there aren't enough aides in their area.

Without home health care, more patients will end up in nursing homes, which already have a shortage of Medicaid-funded beds, said Judy Earley, CEO of the Home Health Services and Staffing Association. The long-term effect on long-term care in New Jersey will be "devastating," she said.

Low pay affects agencies' ability to keep good employees, too.

When the traveling costs and low hourly wage for her job became too much to bear, Lucy Villalona picked up her family from their Vineland home and moved across the street from Kathy Pollock, her favorite client. With no pay raise in sight, she added a weekend job and squeezed in another patient in the early morning.

"I do this job because I love this job," said Villalona, 47. "But I want to be comfortable."

The turnover rate is "very high," Totaro said. Many aides leave the industry for higher paying service jobs with companies like Walmart.

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"It's a real shame, because (home health aides) are the foundation of the health care system in New Jersey," Totaro said. "They literally keep rehospitalization rates down and they help save the state millions of dollars."

Higher wages would attract highly qualified candidates and curtail turnover, agreed Chrissy Buteas, president and CEO of the Home Care & Hospice Association of New Jersey in Iselin. Without a fix, she said, the proposed minimum wage increase would lead to fewer hours with home care aides and higher out-of-pocket costs for care.

The problem is, New Jersey hasn't allocated enough money to support its Medicaid program, Totaro said.

"We are all for this $15 minimum wage — they should be paid more. The work they do is incredible," Pagan said. "The problem is if we’re not reimbursed, we will not exist."

Kim Mulford; (856) 486-2448; kmulford@gannettnj.com