A health care company in Meridian says it must lay off 39 employees and cut services to patients because of a decision by the Idaho Department of Health and Welfare to slash Medicaid reimbursement rates for in-home care for people with developmental disabilities.
“If we don’t do that, we cannot continue as a company,” said Amy Wright, administrator and co-owner of A New Leaf. The layoffs amount to half of the agency’s in-home care team for people with developmental disabilities.
The department announced the cuts Friday after the federal Centers for Medicare and Medicaid services approved the new rates. The cuts will lower reimbursement for “intense” services — around-the-clock care for people with severe problems — to $270 per day, or nearly half the amount providers were paid this year.
The cuts were less severe — about 9 percent — for services in the “high” needs category that includes about 600 patients.
“We don’t want anyone to go without services,” said Tom Shanahan, spokesman for the Idaho Department of Health and Welfare. “What we’ll do is monitor it very closely, and if we see a problem developing, [we will] go back and re-evaluate the rate.”
The changes will reduce payouts by about $20 million per year. That includes $5.8 million a year from the state, which will appear in Gov. Butch Otter’s forthcoming budget as reverting to the general fund. The federal government’s share of the savings will be $14.2 million per year, Shanahan said.
The reduction was scheduled to go into effect Jan. 1. But on Tuesday, the department said it will delay the cuts until Feb. 1. Health and Welfare said it heard immediately from some providers saying they would no longer offer services to patients. The delay is meant to provide enough transition so patients do not lose services.
The cuts also correspond with major changes to overhead and pay rules. A New Leaf will need to start offering health insurance to employees in 2016, which Wright had expected would increase expenses. And rules just went into effect for home-care workers, requiring employers to pay them overtime, which prompted A New Leaf to revamp its pay scales and work schedules.
Wright said A New Leaf pays its “intense” care providers $10 to $10.50 per hour. The new pay rates would leave about $1 per hour to cover all expenses beyond wages, if the agency were to continue its around-the-clock, one-on-one staffing for those high-needs patients, she said.
She is now looking at ways to place one care worker with two patients at the same time, which the state may allow, she said.
Thirteen of the agency’s 25 patients in the Medicaid program are in that “intense” category — in many cases, because they have extreme medical needs. Some have feeding tubes or need special nursing and hygiene care, which had partly been covered by the higher payments from the state, Wright said.
Of those 13, Wright said seven clients had once been housed in the Southwest Idaho Treatment Center in Canyon County, or SWITC (pronounced SWIT-see), the only government-run intermediate care center for Idahoans needing “highly specialized treatment.” The center once housed 1,000 people, but over time all but 25 residents were moved into housing in the community, which the state said was “more cost-efficient and preferred over an institutional setting.”
The payment cuts are the delayed effect of a March decision by the U.S. Supreme Court. The Ninth U.S. Circuit Court of Appeals had ruled in favor of in-home service providers who had sued the state, saying reimbursement rates were too low. But the Supreme Court found in a 5-4 decision that providers do not have the right to sue the state over its Medicaid reimbursement formula.