Legal challenges mount over Medicaid $15 minimum wage mandate

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Medicaid providers that don't pay $15 an hour can be sued beginning Jan. 1, 2023.

Legal challenges to the state’s $15 an hour minimum wage for “direct care” employees are mounting.

The Florida Ambulance Association, Florida Assisted Living Association (FALA) and Home Care Association of Florida (HCAF) filed challenges in state administrative court this week alleging that the state Agency for Health Care Administration (AHCA), which has oversight of the state’s Medicaid program, did not go through rule-making process to define who are “direct care employees.”

The cases have been assigned to state administrative Judge Robert S. Cohen. No hearing has been scheduled.

Lawmakers included the $15 minimum wage requirement for the “direct care employees” who provide care to Medicaid beneficiaries in the state’s Fiscal Year 2022-23 budget. Moreover, to ensure that the $15 minimum wage was being paid, the budget directed AHCA to enter into supplemental agreements with Medicaid providers that require them to attest, under penalty of perjury, that “every employee” of the provider is getting paid $15 an hour.

But the budget didn’t define who are “direct care employees.”

After the budget took effect, AHCA posted to its website a number of “frequently asked questions “about the minimum wage requirements. The agency initially included its definition of “direct care” workers and provided an example of a list of employees or positions it believed fell into the category.

The Home Care Association of Florida sent correspondence to AHCA late September providing written notice that the FAQ was an unpromulgated rule.

While AHCA has subsequently taken the FAQ page down from its website, the groups argue that the agency has not changed course and relied on those definitions in the Medicaid attestation forms that it’s requiring providers to sign.

“Quite clearly, in order to enforce the pertinent provisions of the Budget, AHCA must interpret the phrase ‘direct care employee,'” DOAH attorney William Dean Hall wrote in the Home Care Association of Florida challenge.

“This phrase is not equivalent to a common term that has a well-known meaning. As the other equivalent legal definitions and AHCA’s previously published definition and examples show, determining which employees fit this label is a highly-technical matter. AHCA has defined ‘direct care employee,’ previously publishing its interpretation of that phrase on its website. Although AHCA has taken that definition down, its policy interpreting what is a ‘direct care employee,’ as used in the Budget, has not changed or is substantially similar. AHCA’s definition of the employees falling within that class imposes requirements on Medicaid providers in that it determines who they must pay a minimum of $15 per hour. AHCA mandates that Medicaid providers comply with this requirement.

Hall added that “accordingly, AHCA’s interpretation of ‘direct care employee,’ whether publicly available or not, is a rule. … Similarly, the attestation form interprets the Budget and prescribes law or policy for Medicaid providers relating to it. Through that form, AHCA requires that providers comply with that policy. It is the means through which providers must swear that they will pay the employees AHCA deems to be ‘direct care employees’ a minimum of $15 per hour. By its own clear terms, this form also constitutes a rule.”

FALA and HCAF sent letters to the Governor’s Office over the summer noting the lack of clarity over who qualifies for the $15. While they asked Gov. Ron DeSantis to intervene, he did not.

FALA, HCAF and the ambulance association eventually filed constitutional challenges in Leon County Circuit court and asked a judge to issue a temporary injunction blocking several provisions related to the minimum wage mandate in the budget including one that allows them to be sued beginning Jan. 1, 2023, if they don’t pay their employees $15 an hour.

Florida’s minimum wage currently is $11 an hour and will increase to $12 on Sept. 30, 2023. The wage will continue to increase annually by $1 until 2026 when it reaches $15 an hour. No other employer in the state can be sued for failing to pay an employee $15 per hour.

Christine Jordan Sexton

Tallahassee-based health care reporter who focuses on health care policy and the politics behind it. Medicaid, health insurance, workers’ compensation, and business and professional regulation are just a few of the things that keep me busy.


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