While most nursing home providers in Wisconsin will not see a funding bump as part of a $258 million plan to raise long-term care wages, they could still feel an impact.
Gov. Tony Evers (D) last week allotted the funding after a battle over his spending authority went all the way to the state Supreme Court, leaving some state lawmakers upset about future spending obligations.
Republican leaders of a Joint Committee on Finance said during the last legislative session that they were worried that the cost of funding a new Medicaid fee schedule for home- and community-based services would increase state costs by more than $100 million annually.
But Evers announced earlier this month that he was directing the Department of Health Services to use American Rescue Plan Act funding to support the fee schedule anyway. The move effectively raises wages for direct care workers and providers serving older adults and individuals with disabilities in assisted living and home-based care settings. Wisconsin will join 20 other states that have a minimum fee schedule for HCBS providers, including neighboring states like Illinois, Iowa, Minnesota and Michigan.
How lawmakers will respond to Evers’ end-around is now a concern as providers could face a legislature hesitant to invest any more as they begin debate on the 2025-2027 budget.
But at least one advocate for long-term care providers said he expects lawmakers will see past the political maneuvering, given that many have expressed support for the struggling sector in recent sessions.
People, not political, issues
Rick Abrams, CEO of the Wisconsin Health Care Association and Wisconsin Center for Assisted Living, noted that the state has increased reimbursements for nursing homes by more than $500 million over a four-year period.
Regarding the governor’s plan to provide $258 million for assisted living and home-based care, Abrams said he is “very, very confident” that Republican leaders will see the “urgency” of the new funding, even though they may not agree with Evers’ latest tactics. They’re likely to “let this go and renew the conversation in the next budget session,” Abrams told McKnight’s Long-Term Care News this week.
“They recognize these are people issues, not political issues,” Abrams added.
While the legislature could, in theory, claw back some of the spending increases across the LTC sector, Abrams envisions a session in which lawmakers will continue to support wage growth and quality improvements.
He said his first priority will be to retain budget increases for all types of providers. Secondly, he wants to push lawmakers to reconsider their approach to funding capital improvements in the state’s aging nursing home stock.
Most buildings there were built in the 1970s, Abrams said, and for many, aging is leading to expensive needs not accounted for in the current reimbursement model.
“The kind of capital upkeep, refurbishment and even new buildings that are needed, it hasn’t happened,” he said. “The residents deserve that. It’s their home.”
HCBS rates rise
As providers gear up for the next session, Evers’ fee schedule is set to go live Oct. 1. It would establish minimum amounts that managed care organizations must pay providers of services in adult family homes, residential care facilities, residential apartment complexes, supportive home care agencies and self-directed home-based care.
Wisconsin Public Radio reported that assisted living facilities pay those caregivers an average of $17 to $20 an hour, while state reimbursements assume a $13 hourly rate.
The new minimum fee schedule is only for HCBS providers and would not directly benefit nursing home providers, unless they also deliver assisted living services or supportive home services, according to Rene Eastman, vice president of policy and finance for LeadingAge Wisconsin. She noted that the new federal money can only be used for home and community-based services.
Lisa Davidson, president and CEO of LeadingAge Wisconsin, told McKnight’s Long-Term Care News there is “no competition” between nursing homes and community-based providers for the additional funding.
However, she acknowledged minimum staffing requirements at both the federal and state levels are putting increased pressure on nursing home facilities to raise rates to recruit and retain staff.
“For Medicaid rates starting July 1, 2025, the target for direct-care nursing costs increased 7.6%, reflecting the fact that Wisconsin nursing homes paid higher nursing wages and invested more nursing hours per resident day on their 2023 cost reports than their 2022 cost reports,” she said. “We expect this trend to continue, and for the minimum staffing rule in particular to place increasing upward pressure on Medicaid rates.”
