Medicaid $15 minimum wage takes effect Oct. 1, but providers say they won’t have the money

Home- and community-based providers responsible for assisting the poor and elderly enrolled in Florida’s Medicaid managed long-term care programs are worried about meeting a new $15-per-hour minimum wage requirement for direct care workers that takes effect Oct. 1.

Lawmakers earmarked an additional $135.9 million for Medicaid managed care long-term care plans to cover the increased salary costs. The money will begin to go out to the managed care plans the state relies on to administer that Medicaid program in the next two weeks.

But the home- and community-based providers that contract with the managed care plans say the money won’t flow from the health plans to them quickly enough for them to cover the increased salary costs.

They note the state Agency for Health Care Administration (AHCA) is pressing them to sign new agreements attesting that, starting next month, they will pay their direct-care employees at least $15 an hour. But the forms the Medicaid managed care plans are being asked to sign gives them until Jan. 1, 2023 before they have to increase their contracted providers’ rates to comply with the new wage requirement.

It’s not the only concern the home- and community-based providers participating in the Medicaid managed long-term care program have with the new minimum wage requirements, but it’s the most pressing one. 

Florida Assisted Living Association (FALA) President Veronica J. Catoe sent a letter to Gov. Ron DeSantis on Sept. 9 beseeching him to intervene, calling the issue “critical.”

“How can a facility sign an attestation form now if they don’t know if the increased funds will in fact be passed on to them or if they must try to use their current operating funds to try to come up with funds for the wage increase?” Catoe wrote in the Sept. 9 letter.

“It appears to be premature if the contracts currently in place have not been amended to specify that the increased minimum wage cost is being passed on to the facility. Otherwise, these facilities will be taking unanticipated funds from their operating budgets during a time at which operating funds and staffing (are) tight and limited.”

FALA sent the letter after several discussions with AHCA, which houses the Medicaid program and is working to implement the pay raise requirements. Senate President-designate Kathleen Passidomo, House Speaker-designate Paul Renner, Senate Appropriations Chair Kelli Stargel, House Appropriations Chair Jay Trumbull and AHCA Secretary Simone Marstiller also were copied on the letter.

Home Care Association of Florida Executive Director Bobby Lolley also sent a letter to DeSantis Sept. 15 asking the Governor to consider delaying the $15 per hour wage increase by a month so AHCA could ensure the managed care plans have adjusted the home health agencies’ reimbursement rates before the new minimum wage requirements. 

Lolley said the association, which represents 2,200 home health care agencies, has been in regular contact with Medicaid officials about the potential delay in health plans getting increased rates to the providers. In May, the association asked Medicaid to begin working on the issue after DeSantis signed the budget.

“The minimum wage mandate will take effect in less than three weeks, and we have not yet heard from any provider who has had their contract amended by a health plan to cover the minimum wage requirement,” Lolley wrote.

Florida’s minimum wage for all employees, regardless of industry, will be $15 per hour starting in 2026 under a constitutional amendment Florida voters approved in 2018. 

The Legislature this year agreed to include more than $600 million in the budget to increase reimbursement rates so Medicaid providers can pay every direct care worker $15 an hour by Oct. 1.

The $600 million is scattered across several budget areas and pays for increases for providers that are contracted with Medicaid managed care plans, as well as providers that are reimbursed on a fee-for-service basis and aren’t part of the Medicaid managed care system.

But most Medicaid beneficiaries are enrolled in managed care plans, and lawmakers are relying on the plans to get the increased payments to their contracted providers, particularly those that provide long-term care services and are some of the lowest paid workers in the health care industry.

Specifically, the Legislature appropriated $135.9 million to Medicaid managed long-term care plans to increase the wages of all the direct care providers they contract with, from home health agencies to assisted living facilities to nurse registries.

Lawmakers left it to the managed care plans how to distribute the funds among the different providers.

The same is not true for nursing homes, though. Lawmakers earmarked another $202 million for the Medicaid managed long-term care plans specifically targeted just for nursing homes. Unlike other Medicaid providers, nursing homes are required to increase wages for all their staff, including janitorial and housekeeping, to $15 an hour.

The delay in funds has some home- and community-based long-term care providers reconsidering whether they want to continue to participate in the Medicaid managed long-term care program.

Health care providers are reluctant to talk publicly because they say they fear retribution from the plans they have contracts with.

An administrator at one licensed home health care agency on Florida’s Space Coast says she’s lamenting a recent decision she made to begin participating in the Medicaid managed long-term care program. The administrator at a well-established home care agency that has served the community for more than 15 years, she said she agreed to participate in the program in May after repeated requests from the community and from clients.

While she supports the $15 minimum wage, she said she wasn’t aware it was looming on the horizon. 

She has worked closely with the Medicaid managed long-term care plan over the last several months to get credentialed, but she said the plan has not discussed with her increasing the rates it offered in May before the budget was signed and the mandate became law. 

“I feel the direct caregivers that they are speaking of, without a doubt, deserve more money. I have always said I find that they are very hard workers and they handle all of the heavy lifting for the state with these clients. I have no objection to that rate. The only issue we are finding and having is the problem is we are not getting reimbursed to cover the costs of the increase,” she said. 

It’s not clear how the Governor’s Office will react. Bryan Griffin, a spokesperson for DeSantis, referred questions about FALA’s letter to AHCA. Agency spokesperson Brock Juarez did not respond to Florida Politics inquiries by press time.

AHCA has been sending out emails reminding providers it wants the supplemental wage agreements signed by Oct. 1.

According to AHCA, the state can recoup the supplemental funds associated with the minimum wage requirements from providers that don’t sign the agreements with the state.

It’s not clear how many home- and community-based providers are contracted with managed long-term care plans and need to sign the forms. Questions from Florida Politics were not immediately answered.