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Funding bill could increase workforce challenges for assisted living providers

Maryland State House in Annapolis. (Credit: gregobagel / Getty Images)

A bill aimed at nursing home staff could potentially have negative effects on Maryland assisted living providers already challenged by workforce issues, according to industry advocates.

HB 462, the Nursing Home Staffing Crisis Funding Act of 2024, targets funding for wages and benefits for nursing home care workers. The bill would increase Medicaid payout rates to 8% from 2026 to 2029 and require that at least 75% of that rate hike go to increasing pay for workers. 

Although LeadingAge Maryland said it appreciates and supports the intent of finding ways to increase nursing home staff wages, the association is opposed to the legislation and its “problematic components.”

Maryland is facing a budget deficit, and an 8% Medicaid rate increase likely would not be approved this year or in the coming few years, according to LeadingAge Maryland President and CEO Allison Roenigk Ciborowski. The governor’s budget this year, she added, only calls for a 3% Medicaid rate increase for fiscal year 2025.

In addition, Ciborowski said, any solution should consider the entire long-term care continuum. Although the Medicaid increase in the proposed bill would apply to all Medicaid providers, only nursing homes would be subject to the 75% required wage pass through and additional cost reporting requirements.

“This could have potentially negative effects on the strength of the workforces of other settings, like assisted living and home care, because these other settings would likely not be able to increase wages to the same degree as nursing homes,” she said. “This could make it even more difficult for assisted living providers to recruit and retain staff members.”

Health Facilities Association of Maryland CEO Joe DeMattos called the bill “well-intentioned” but not feasible in its current form. 

Given that nursing homes have many payer sources, requiring facilities to increase wages and benefits when only a portion of the nursing home’s budget comes from Medicaid reimbursement would be problematic. 

“We want to pay workers as much as possible, as supported by the Medicaid rates,” DeMattos said in recent testimony before the Maryland House Health and Government Operations Committee. “Given that providers are reliant on non-negotiable Medicare and Medicaid rates for the majority of their revenue, any wage and benefits pass-through measure must be funded with new Medicaid dollars.”

A commission studying the state’s long-term care and healthcare workforce challenges released its report at the end of last year and found that Maryland is slower than other states in growing its long-term care and healthcare workforce workforce, to the detriment of current employees being overworked. The commission identified data gaps across occupations, settings and geographic locations, calling for the establishment of a workforce data center to allow accurate assessment of current and projected workforce supply and demand.

Source: McKnights Seniorliving

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