State Recap
EOHHS Holds Hearing on Chapter 257 Rates for Certain Elder Care Services
On May 19th, HCA testified at the EOHHS Chapter 257 rate review hearing. As a reminder, EOHHS has proposed increasing rates for Enhanced Community Options Program (ECOP) Direct Services from $749.47 to $976.08 per client per month and rates for Home Care Program Direct Services from $326.35 to $424.34 per client per month, which amounts to a 30% increase to the base rate for both ECOP and Home Care Program Services.
During our testimony, HCA highlighted our concerns with the lack of transparency when it comes to the rate review process and that EOHHS should use real-time inflation data rather than projected, expected inflation data when determining cost adjustment factors (CAF). HCA wants to thank all members that submitted written testimony for the hearing, your input is very important. EOHHS still plans to meet the July 1st, 2023, deadline to promulgate the new proposed rates.
Senate Starts Debate over Senate FY24 Budget Amendment
In the end of May, the Senate started debates over amendments to their proposed FY24 budget. After 2 days of debate, the Senate has added $65.4 million in line-item spending to its $55.8 billion plan. One amendment of note that is set to pass is Sen. Patricia Jehlen amendment # 400, which would amend the Chapter 257 Rate Reserve line item 1599-6903 as follows: “By inserting after the words “any human service provider receiving revenue under said Chapter 257” the following: “, and any home care agency subcontracting with such human service providers to provide home care services,”. This amendment would specifically single out that home care providers would need to comply with the 75% pass-through requirement that is stipulated in the line item. We would like to note that this pass-through requirement is much broader than a pass-through amendment that was floated during the House budget debate, that HCA along with the Home Care Aide Council successfully blocked. HCA along with the Home Care Aide Council drafted a letter to Senate Ways and Means staff and Senator Jehlen that stipulated our concerns with the amendment.
We emphasized that the amendment is redundant since home care is already mentioned in the line item and that it has the potential to create regulatory confusion. We also noted the by including the amendment language it would single out one provider group under Chapter 257 and would raise an issue of equity. We argued that the pass-through requirement should apply to chapter 257 requirements broadly and equitably to all providers. In the end the amendment was added to the Senate budget proposal that should be passed in the coming days. Once passed by the Senate the legislature will create a conference committee to debate the differences between the house and senate bills before sending a final bill for the governors signature. HCA will continue to advocate for the amendment to not be included in the final budget proposal.
Look Ahead
State Budget
In the beginning of June, the Senate should pass their state budget proposal for FY24. Once passed, the lengthy budget process will move to the next stop, conference committee debate. In June, after the senate passes their proposal a conference committee will be formed with legislators from both the House and Senate. The committee’s purpose is to iron out the differences between both budget proposals and create one final budget proposal for the legislator to pass.
While it seems like we are getting close to the finish line, that’s far from true. It could take a couple of weeks for the conference committee to debate the differences. Even then, once it’s created and passed by the legislature, it will still need to be reviewed and approved by Governor Healey, who is allowed to send back the proposal with suggested changes. Which is a common occurrence, last year former Governor Charlie Baker sent back the legislature proposal with amended language for an outside section.
Technically, the state has until June 30, 2023, when last year’s budget runs out, to pass a new budget and continue funding the government. The state never meets this deadline and passes a supplemental budget to extend FY23 funding until they are able to pass a new budget. Last year it took till July 28th, for Massachusetts to pass their FY23 budget, making Massachusetts one of the last states to pass a budget.
I will provide another budget update next month when inevitably the FY24 budget has not been passed.
Federal Recap
Debt Ceiling Debate Rages On
The main focus of everyone on Capitol Hill has been the on-going debate surrounding increasing the debt ceiling. For a brief backstory, the debt ceiling is the maximum amount of money that the United States can borrow cumulatively by issuing bonds. The debt ceiling was created under the Second Liberty Bond Act of 1917 and is also known as the debt limit or statutory debt limit. If U.S. government national debt levels bump up against the ceiling, then the Treasury Department must resort to other extraordinary measures to pay government obligations and expenditures until the ceiling is raised again or risk a drop in the U.S. credit rating or defaulting on loans (which both would be disastrous). The debt ceiling has been raised or suspended over 78 times since 1917 with the most recent raise being in 2021. Treasury Secretary Janet Yellen has been sounding the alarms for the last couple of months that the U.S. is at risk of hitting the debt ceiling as soon as June 5, NEXT MONDAY, setting a deadline for Congress to vote to either raise or suspend the debt limit.
Since the end of April, there has surprisingly been progress in the negotiations. President Biden and Speaker of the House Kevin McCarthy struck a true compromise over Memorial Day weekend on a package to avert a disaster. The package would suspend the debt ceiling through Jan. 1, 2025, effectively moving any future debate till after the 2024 presidential election but would also reign in future government spending. Under the deal, non-defense spending, such as Medicare and Medicaid, would remain relatively flat in fiscal 2024 and increase by only 1% in fiscal 2025, 2% below a planned 3% increase in defense spending. After fiscal 2025, there would be no budget caps. One of the most contentious points of the deal is an increase to work requirements for adults that receive food stamps through SNAP. Lastly the deal stipulates that the student loan payment moratorium would be lifted this August.
While this is not exactly what both sides wanted, it is a true compromise between no cuts to spending that Dems wanted and massive cuts in spending that Republicans wanted. The biggest news is that this deal would prevent a potential economic meltdown that none of us have ever experienced. Just think about how hard life was when you had shitty credit. Now imagine if the U.S. credit rating was so bad that couldn’t even get pre-approved for a Kouls card. That is exactly what this deal would avert.
Look Ahead
Debt Ceiling
While there has been progress on the debt ceiling package, we are still not at the finish line. It wouldn’t be Congress without some superficial fanfare. Since Sunday, when text of the bill was released, Republicans and Democrats opponents of the bill in the House and Senate, mainly the house, have been SCREAMING for the last couple of days, calling this bill a shame. Republicans mad that they aren’t going farther with spending cuts, while Democrats hate the new work requirements and cuts to non-defense spending. There’s a lot of truly idiotic comments that I could write about, that just proved that there are a lot of members of Congress that only want the job for fanfare and notoriety and don’t even understand basic economics. But that would only give those members exactly what they want.
In the end all their shouting is as effective as a screen door in submarine. It’s a part of the game when both sides come to an actual agreement. The House passed the debt ceiling last night and Senate leadership on both sides has promised to move swiftly to pass the package before the June 5th deadline. Opponents on both sides in the Senate will still vocalize their opposition while the Senate debates the bill, but in the end, I believe that a deal will be met before June 5th. But when it comes to Congress you really never know what can happen, so, let’s all just hope for the best.
The main thing that we all need to keep a close eye on after the package is hopefully passed is now expected cuts to Medicare. With measly planned increases to all non-defense spending, there is a potential for deeper cuts to Medicare home care rates. CMS is already expected to propose further cuts and it could get a lot worse in the coming years. HCA is working closely with NAHC to stay up to date on any potential rate cuts that would directly impact our members. We will be sure to keep everyone updated if there are any potential cuts announced.
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