hand placing Medicaid puzzle piece

New Jersey’s governor has proposed a 10% Medicaid pay increase for nursing homes, with the kinds of strings attached that providers might ultimately view as needed lifelines.

Gov. Phil Murphy (D) is touting plans to spend $134.4 million next year to improve wages for direct care staff in nursing homes. But of the targeted 10% increase in the Medicaid nursing facility rate, facilities would be required to spend at least 60% to boost wages, while the rest would have to be used toward statewide infection control requirements. 

Murphy’s spending plan, which could be amended or replaced by the state legislature before passage next month, also includes $30 million to fund annual direct-care minimum wage increases.

“The committed workers showing up daily to care for some of our most vulnerable deserve to know they’re valued and supported,” Human Services Acting Commissioner Sarah Adelman said in a statement Tuesday.

Unlike many states grappling with their budget process, New Jersey has come through the pandemic on relatively solid financial footing, which the governor acknowledged while outlining the broader budget earlier this year. Murphy’s new support for long-term care staff would be funded without a tax increase.

Trending in other states

Provider associations in other states also are clamoring for Medicaid increases, and several have said they’d be willing to accept restrictions like the ones Murphy is proposing.

In March, LeadingAge Texas President and CEO George Linial said low Medicaid rates were a major contributor to nursing home staff turnover. He has advocated for a link between provider reimbursement increases and wage hikes.

“We really want any increase in Medicaid rates to be tied to staff wages and benefits,” Linial told McKnight’s Long-Term Care News at the time. “We definitely know that we need more funding, but there has to be accountability for that.”

While states including Florida and Pennsylvania have proposed flat (or lower) Medicaid funding for next year, others are joining New Jersey in considering more funding for nursing homes.

Maine leaders Tuesday held a hearing to consider a bill that requires the state to reconsider the base rate for its MaineCare Medicaid program every two years, which would enable the state to support providers in giving frontline workers raises.

Following up on recommendations from a long-term care task force, the bill would require direct care workers across the long-term care spectrum to be paid at least 125% of the minimum wage, which hit $12.15 per hour as of Jan. 1.

The bill also charges state officials to “take into account” costs of providing care and services, such as training requirements; quality and safety standards; future increases in the minimum wage; earned paid leave; electronic visit verification; and “other costs that are not provided for in the current reimbursement.”