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Medicaid Regains Power to Deduct From Home Health Workers’ Pay

May 12, 2022, 3:48 PM

State Medicaid programs will regain the authority they lost in the Trump era to withhold union dues and deductions for benefits from home health workers’ payments.

The Biden administration final rule (RIN 0938–AU73), published Thursday, is the latest move in a back-and-forth disagreement between Democratic and Republican administrations over how Medicaid programs should interact with home health workers and their unions.

At issue is how to interpret a provision of the Medicaid statute prohibiting payments to anyone other than the person or institution who provided a covered service. The new rule includes amended language specifying that payments to third parties for benefits such as health insurance and training aren’t excluded by the statutory prohibition.

The Obama administration said in a 2014 rule allowing payments to unions that the prohibition was intended to prevent “factoring arrangements,” in which providers sold reimbursement claims for a percentage of their value to companies that would then submit the claims to the state.

The goal of the prohibition wasn’t to prevent Medicaid programs from carrying out basic employer-like responsibilities such as withholding payments for benefits and training, the Obama-era rule said.

The Trump administration reversed course in a 2019 rule that interpreted the prohibition to exclude such payments.

The change will help strengthen and stabilize the home health workforce by supporting training and improving benefits, the Biden administration rule said.

Medicaid has become increasingly reliant on the home health workforce in recent years as federal health-care policy has shifted to encourage care in the home and community rather than in institutions. Over 50% of Medicaid spending on long-term care now takes place in the home and communities, up from less than 10% in the 1980s.

“Deductions for these purposes are an efficient and effective method for ensuring that the workforce has provisions for basic needs and is adequately trained for their functions, thus ensuring that beneficiaries have greater access to such practitioners and higher quality services,” the rule said.

Workers covered by the rule are those for whom Medicaid is the primary source of revenue. Worker consent to deductions will be required.

Around 3.4 million people are employed as home health workers and personal care aides in the US, according to the Bureau of Labor Statistics.

At least 800,000 of them are currently union members, according to the Service Employees International Union.

To contact the reporter on this story: Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Alexis Kramer at akramer@bloomberglaw.com