Costs are steadily rising across the nation due to inflation and recessionary times, putting pressure on businesses and consumers alike. Combined with a need to attract more workers with competitive salaries and benefits, homecare agencies, in particular, have a lot to consider when it comes to managing their bottom line.
For those operating in New York, October 1 brings another cost to consider – a $2 increase in the hourly minimum wage, which increases another $1 per hour in October 2023.
New York has a homecare workforce that is large and growing rapidly. The state employs 30% more homecare aides per capita than any other state, 140% more than the U.S. average. Yet, despite these numbers, homecare will account for more new jobs than any other occupation in the state over the next decade. Despite the marketplace growth, there is a massive shortage of workers, with the current shortage of 25,000 homecare workers predicted to grow to 80,000 in the next three years.
To address this demand, earlier this year, the State of New York’s final budget approved a plan for $7.7 billion in funding to support this $3 per hour wage increase for homecare workers over the course of two years. The current hourly minimum for homecare aides in New York City, Long Island and Westchester is $15, while it stands at $13.20 in other parts of the state.
While the deadline for these minimum wage increases is quickly approaching, uncertainty remains about whether, or how, the budget will reimburse homecare providers and managed care plans for the increase in minimum wage.
The situation remains fluid. Meetings are happening with various agencies in Albany, according to Emina Poricanin, a lawyer specializing in employment and healthcare law, who spoke during a webinar hosted last week by the Community Health Care Services Foundation and the NYS Association of Health Care Providers. Given the uncertain circumstances, there is a possibility that when October 1 arrives, homecare agencies and payers will be required to fund the increases themselves if a new rate of reimbursement has not been negotiated and confirmed. Poricanin mentioned that the New York Department of Health (NYDOH) said in May that it was optimistic that the Centers for Medicare & Medicaid Services (CMS) would approve the increase and money would be available in New York to pay for it. However, at the time of the webinar last month, the funding had not been secured by New York State or the plans.
With the uncertainty surrounding reimbursement, homecare providers must prepare now for a number of potential scenarios come October 1, and understand the details of the minimum wage increase, including:
This move is a major milestone in the homecare industry, and while these changes only affect a particular region for the time being, such increases are expected elsewhere. By considering all options and taking proactive measures now, homecare providers can minimize the impact and avoid consequences of non-compliance – even while we await final decisions to be made before the October 1 minimum wage increase takes effect in New York.
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