CMS threatens withholding stimulus funding if home health pay isn't reinstated

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When the California state legislature act to reduce the state's maximum contribution to home healthcare workers' pay from $12.10 per hour to $10.10 per hour, it violated the terms of the recently passed federal stimulus package and therefore invalidates the state from receiving $6.8 billion in stimulus money, according to a Centers for Medicare & Medicaid Services ruling.

Under California's In-Home Supportive Services Program, which serves more than 400,000 elderly state residents, healthcare workers are employed by and paid by the county, which also sets pay and benefit rates based on each year's state budget. Contracts are settled upon through a collective bargaining process. Counties are on the hook for 35% of the workers' wages up to the state's maximum contribution, and 100% of costs above that level. Many of the contracts between counties and healthcare workers do not allow for the counties to reduce worker pay, despite now receiving less funding from the state. This puts cash-strapped counties in a position where they are now responsible for an even larger portion of healthcare workers' pay.

Under the American Recovery and Reinvestment Act, the state Legislature's reduction of its own contribution to healthcare workers' pay is in violation of the local contribution Maintenance of Effort requirements, according to the CMS ruling, which was issued May 5. During recent negotiations between the California government and the Obama Administration, the Legislature was ordered to rescind the cuts or lose $6.8 billion in stimulus funding, which would be used for other healthcare related purposes. According to an article in the Los Angeles Times, that move would require a two-thirds majority vote, which would mean Republicans, who initially pushed for the $2 reduction, would have to support the action.