Home and Community-Based Services Policy Forum November 2, 2015 Peter Notarstefano, Director of Home and Community-based Services

Outline Federal Budget Non-medical Home Care Older Americans Act Programs Adult Day Services PACE Initiatives that will increase access to HCBS

114 th Congress and the President Budget Deficit appropriations bills Continuing Resolution/ Omnibus Debt limit Medicare premiums increase We have a problem!

Bipartisan Budget Act of 2015 Extend debt ceiling to March 2017 Bust budget limits set by the 2011 Budget Control Act- d/c non-discretionary sequestration - raise those caps by a total of $112 billion in fiscal 2016 and 2017 Reduce a $54 increase in premiums that would hit 8 million Medicare enrollees in 2016.

Bipartisan Budget Act of 2015 Increase spending caps for defense & nondefense programs by $25 billion each in fiscal 2016 Repeal the auto-enrollment mandate in ObamaCare $32 billion over 2 years for the Overseas Contingency Operations fund used to fight the war in Iraq, Syria and Afghanistan.

Bipartisan Budget Act of 2015 Offsets Spectrum auctions Medicaid additional rebate requirement to generic drugs 1 year extension of Medicare sequester cuts crop insurance offset Increase Employer pension plan premiums Restructure Social Security Disability Insurance benefits

What’s next? Appropriations Medicare bill offsets

Older Americans Act Reauthorization Act of 2015 (S. 192) was unanimously approved by the U.S. Senate on July 16, 2015 Barriers- “hold harmless”/ formula House Needs to Act!

Home Care Regulation October 1, 2013: DOL issues final rule that narrows the definition of “companionship services” under the FLSA exemption and prohibits third- party employers, such as agencies, from applying the companionship exemption to its employees-eligible for minimum wage and overtime December 2014: D.C. federal court strikes down the portion of the regulation preventing third-party employers from relying on the companionship and live-in exemptions and issues a temporary stay January 22, 2015, U.S. Department of Labor (DOL) appealed two orders that vacated provisions of the DOL's Home Care Rule. August 21 st, 2015 U.S. Court of Appeals for the District of Columbia Circuit sided with the DoL November 13, 2015 discretionary enforcement Discretionary enforcement policy ends on December 31, 2015

DoL Home care rule Consumer-directed home care programs – DOL has most have a third party “joint employer” Agency home care programs – Medicaid rate structures need to take into account new FLSA obligations Shared living programs –third party employer or are the workers independent contractors? Your state must analyze the fiscal impact in affected programs Has your state determined how many workers are working overtime and how many workers travel between consumers?

DoL Home care rule Without additional funding, states may take compliance actions that hurt consumers and workers, like caps on hours, travel or working for multiple consumers. The FY ‘16 budget is finalized in almost all states. Options might include state reserve funds, agency savings that could be reallocated, or legislative action. Most state agencies are now preparing their FY ‘17 budget requests.

DoL Home care rule HCBS Could include prohibiting all overtime, restricting all or most travel, or abandoning consumer-directed models of care. Loss of income by workers Abandonment of models that allow people with disabilities and seniors to have more control over their lives.

A single individual may be simultaneously considered an employee of more than one employer under the FLSA. In such cases, the employee’s work for the joint employers is considered as one employment for purposes of the Act the joint employers are individually and jointly responsible for FLSA compliance, including paying not less than the minimum wage for all hours worked during the workweek and, if applicable, overtime compensation for all hours worked over 40 in the workweek. DoL Joint Employment

Who may be Joint Employers? Staffing companies who supply employees to other companies are often joint employers. Companies that contract with staffing agencies to augment their workforce Contractors and sub-contractors–and companies that use them– for similar reasons Franchisors and franchisees Public entity and a consumer may jointly employ a provider through a Medicaid-funded consumer-directed program.” Provider agency or a Managed Care Organization (MCO), may also be joint employers in consumer-directed programs

Joint Employment Some states may be considering abandoning Medicaid consumer-directed programs. DOJ and HHS acknowledged that some states are planning to comply with the rule by setting limits or capping direct care workers’ hours or travel times

Adult Day Services Medicaid reimbursement Increase acuity based payments Managed Care Diversification Services Specialty programs

HCBS Characteristics Rule To ensure that individuals receiving long-term services and supports through HCBS programs under the following Medicaid waivers: 1915 (c)-, 1915 (i), 1915 (k) Community First Choice- have full access to benefits of community living and the opportunity to receive services in the most integrated setting appropriate. In effect- March 17, 2014

HCBS Characteristics rule What should be paid under 1915c, 1915k, 1915i and 1115 Medicaid waivers? What is HCBS? What is not HCBS?

Settings Presumed to have Qualities of an Institution located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment Located in a building on the grounds of, or immediately adjacent to, a public institution Other settings that has the effect of isolating individuals receiving Medicaid HCBS from the broader community

HCBS Transition Plans Residential regulation Non-residential States must be in full compliance with the Federal requirements by the time frame approved in their Statewide Transition Plan, not to exceed March 17, 2019 Provider survey Onsite visits Heightened Scrutiny

State Transition plans So far 42 states received requests for corrections from CMS No transition plans have been approved States can go beyond the scope of the rule as long as it complies with their approved waiver from CMS and state statute

Possible Remediation Institution? HCBS

Adult Day Services – Veterans Admin. Proposed Rule Allows Veterans Administration Provider Agreements- not finalized H.R Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 SEC 4002 passed Veterans Access to Extended Care Act (S739/HR1369) Veterans Access to LTC and Health Services Act (S2000)

Adult Day Center Enhancement Act (H.R.263) Medicare Adult Day Services Act of 2015 (HR1383) Community Based Independence for Seniors Act (S704/HR2704)

Programs of All Inclusive Care for the Elderly 116 PACE programs in 32 states serving 35,000 beneficiaries PACE Innovation Act of 2015 (HR 3243/ S1362) passed the Senate and House- signed by President

Managed Long-term Services and Support States Managed Long-term Services and Support States: (22) AZ, CA, DE, FL, HI, IL, KS, MA, MI, MN, NC, NJ, NM, NY, OH, PA, RI, SC, TN, TX, VA, WI

Medicare Medicaid Care Coordination Initiatives Financial Alignment demonstration proposal approved by CMS : or Pursuing alternative initiative CA, CO, CT, FL, IL, MA, MI, MN, NH, NJ, NY, OH, OK, RI, SC, TX, VA, WA

Balancing Incentive Program AR, CT, DE, GA, IL, IN, IA, KY, LA, ME, MD, MA, MS, MO, NE, NV, NH, NJ, NY, OH, PA, RI, TX

Medicaid State Plan Amendments under 1915(i): AR, CA,CO,CT,DE,DC,FL,ID,IN,IA, LA, MD, MI,MN, MS, MT, NV, OR, SC, WI

Community First Choice option under 1915(k) Community First Choice option under 1915(k): AR, CA(2), CO, CT, MD, MN, MT, NY, OR, TX, WA, WI

Contact Information Peter Notarstefano, Director of HCBS LeadingAge