Health Providers Scramble to Keep Remaining Staff Amid Medicaid Rate Debate

As an employee of Family Outreach in Helena, Montana — an organization that assists developmentally disabled people — part of his workday involves driving around, picking up clients, and taking them to work or to run errands.

“What’s up, gangsta?” Johnson said as a client got in the car one day in March.

The pair fist-bumped and Johnson asked what type of music the client liked.

“Gangsta stuff,” came the response. Rap, mainly.

Snoop Dogg played in the background as Johnson and his client drove to McDonald’s, where Johnson helps his client work. The duo washed dishes for two hours in the back of the fast-food restaurant, where it smelled like maple syrup and sulfur.

About two weeks earlier, Johnson testified at a hearing at the Montana Capitol in support of a bill that seeks to raise health providers’ Medicaid reimbursement rates to levels aligned with the average cost of the care they provide. The bill is informed by a 2022 study that recommended benchmark rates after its authors found that Montana Medicaid providers like Family Outreach were being significantly underpaid.

“The provider rates need to be funded so people that work in this field or that work in adjacent fields can have solid ground, a place where you can build a career,” said Johnson, who makes $16.24 per hour in his position as an individual living specialist.

Republican Gov. Greg Gianforte and legislators agree that Medicaid rates need to rise; where they disagree is by how much. The proposals range from the bill Johnson testified for — Democratic Rep. Mary Caferro’s bill to raise rates to the study’s benchmarks — to Gianforte’s plan to fund 91% of that benchmark in 2024 and 86% in 2025.

Meanwhile, the Republicans leading the House Appropriations Committee, a key budget panel, are proposing an average increase of 92% for fiscal year 2024 and 97% in 2025.

Providers and leaders who work in behavioral health, developmental disability, long-term care, and family support services have attended the multiple hearings on rate adjustments, saying thanks for the proposed increases but asking for more. Many providers said the benchmark rates in the study are already outdated.

Providers across the United States say they haven’t seen significant reimbursement increases in more than a decade, according to Shawn Coughlin, president of the National Association for Behavioral Healthcare. Behavioral health can be an afterthought for policymakers, resulting in lower rates than for medical or surgical reimbursement, he said

Michael Barnett, associate professor of health policy and management at the Harvard T.H. Chan School of Public Health, said the supply of staff is inadequate to meet demand for behavioral health care across the U.S.

“And it’s not clear we’re going to meet any of that without paying people more,” Barnett said.

Some health providers have raised wages but still struggled to draw workers and keep the ones they’ve got. Family Outreach raised the wages of some direct care workers from $11 per hour to $12.20 per hour this year, and by more in places where the cost of living is higher, such as Bozeman. But even starting wages of $16 or $18 an hour aren’t attracting enough people to work there, Family Outreach Program Manager Tyler Tobol said.

“It’s a field that not a lot of people want to get into, so those that we can find, I think being able to pay a higher wage, a living wage, I think that would be the best benefit we get out of the rate increase,” Tobol said.

The organization went from 153 employees in 2020 to 128 today. The staffing shortage means employees now focus mainly on making sure clients have the basics — medications and meals — instead of providing additional community integration and activity support services.

At Florence Crittenton in Helena, where moms 18 to 35 with substance use disorders can live with their young kids while undergoing treatment, a mom entered the kitchen where women are taught life skills like learning to cook dinner. The woman told a staff member she was making juice for her child.

“This is where life happens,” said Daniel Champer, Florence Crittenton’s clinical and residential services director.

Executive Director Carrie Krepps said the organization’s two main sources of revenue are Medicaid reimbursements and fundraising. Fundraising, which used to account for 30% of revenue, now makes up between 60% and 70% of the money coming in.

“It’s the reason we’re still open,” Krepps said.

At any given time, an average of 15 to 18 of Florence Crittenton’s 50 staff positions are vacant. If Medicaid rates don’t increase, she said, the organization will have to consider if it can continue operating the recovery home at its current capacity.

“The full rates would just barely cover where we are today,” Krepps said of raising Medicaid reimbursement rates to benchmark levels.

In 2021, Florence Crittenton closed a youth maternity home for pregnant youths and young moms ages 12 to 15, the only home in the state that took teens under 16. Krepps said Florence Crittenton didn’t take Medicaid fees there because the rates were too low.

“It’s heartbreaking,” Champer said. “It’s like clockwork on Monday morning. I come in and see the inquiries and referrals about moms who need treatment and we can’t function at full capacity because we don’t have staff.”

Dennis Sulser, the CEO of Youth Dynamics, which provides home support, case management, and community-based psychiatric rehabilitation across the state, said his organization is paying its staff more than it can afford. Even with the rate increase, he said, they’d only break even.

In the past three years, Youth Dynamics has lost 56 full-time employees. The covid-19 pandemic made people realize they could find other jobs that paid more and even allowed them to stay home, Sulser said.

Two years ago, the entry-level pay for Youth Dynamics was $10.70 per hour, and it now averages $13.70. Still, staffing shortages led to the closure of a group home in Boulder and one in Billings, shrinking the organization’s capacity from 80 to 64 beds statewide.

Ashley Santos, program manager for the organization’s three remaining group homes in Boulder, said she is trying to figure out how to attract enough staff to reopen the closed home there. An increase in pay supported by the provider rate increase could give her flexibility to provide extra incentives, she said.

But it’s hard to attract workers when Hardee’s has a starting wage of $18 per hour compared with Youth Dynamics’ $16, she said. And fast-food jobs don’t come with the emotional toll of working with kids who have a severe emotional disturbance diagnosis like PTSD or depression.

Back in Helena, Johnson made his last stop of the day for Family Outreach. He sat next to a client on the couch at the house where the client lives with his mom. Johnson called the number on the back of his client’s debit card to see how much money was left on it before they went out to run errands.

Johnson and the client then headed to a local supermarket. Trips like these give his client a chance to interact with other people, while his mom gets some time to herself.

“You look nice,” Johnson said to the client as they got into the car, the folksy music of Dougie Poole, the choice of Johnson’s previous client, playing in the background.

Keely Larson is the KHN fellow for the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Newspaper Association, and Kaiser Health News. Larson is a graduate student in environmental and natural resources journalism at the University of Montana.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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