Bill Aims to Block HMO Cuts in Medicaid Reimbursements

A state Senate committee has moved to set up roadblocks in the face of reimbursement cuts planned by HMOs that oversee New Jersey’s Medicaid program.

Often-emotional testimony by health-care providers and workers helped convince the Senate Health, Human Services and Senior Citizens Committee that cuts by Horizon NJ Health and the other HMOs would hit services for the frail elderly, children with disabilities and other vulnerable populations.

The committee already was inclined to act as its chairman, Sen. Joseph Vitale (D-Middlesex) sponsored legislation -- S2241 -- with Sen. Loretta Weinberg (D-Bergen) to require state administrative approval before the HMOs can lower reimbursements.

Weinberg declared that the issue is of “increasing importance” to the state as it tries to encourage keeping people in their own homes instead of nursing homes, while shifting Medicaid clients into managed care. Last year, the state moved almost 155,000 people from fee-for-service Medicaid programs into the HMOs, with almost half going to Horizon.

The company notified health-care agencies that it was cutting the reimbursement rate for personal-care aides by 10 percent, from $15.50 per hour to $13.95 per hour.

“To its credit, Horizon delayed the cut and reduced it to 4.5 percent” after public outcry, Weinberg said. “While we appreciate their willingness to sit down and discuss this… that’s something that should have occurred before their rate-cut announcement.”

A parade of representatives from hospitals, medical day care, adult day care and home care agencies supported the bill’s requirement of a public hearing and approval from the state commissioner of human services before reimbursements could be cut.

Pay for Home Health Aides Called Already Too Low

Many said the previous reimbursement rate already was too low.

Weinberg said HMOs would be required to show they had taken other steps to reduce costs and that the lower rates “would not adversely affect the quality and quantity of health-care services.”

Reimbursement rates already are so low that many agencies are challenged to recruit and keep home health aides, said Irma Camaglian, vice president of Accredited Health Services in Franklin Township.

With any further cuts, she said, “We will be competing with the pay rates at McDonald’s or Burger King,” she said.

Speaking through an interpreter from 1199 Service Employees International Union, Belen Jaramillo told the committee she is paid only $9.75 as a home health care worker in Union County.

“Low wages and unstable working hours make it hard to do the work I love and survive,” she said.

Many of her patients are elderly, frail and lonely, Jaramillo said. She told of finding one, a 73-year-old man, lying in a fetal position, unable to rise and greet her as usual. Only after she convinced him that he would not be alone in the hospital because she would visit him did he consent to go for treatment, she said.

“We cannot look the sick and elderly in the eyes and turn our backs and abandon them,” Jaramillo said.

Legislators and providers said Jaramillo’s salary is about average for the roughly 30,000 home health aides working across the state, and amounts to about $20,000 a year. Reimbursement rates for such services were $14 an hour two decades ago, according to some.

State Sen. Barbara Buono (D-Middlesex), told of driving a health aide caring for her late mother and seeing the woman falling asleep. It turned out, Buono said, “She was working two jobs because she was not making enough to support herself” as an aide.

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