CEO Corner – May 2023
May 1, 2023
June has come and the 2023 legislative session is over. It is particularly acute to explain how Homeward Bound’s portion of the disability community made out, especially because the community is in such dire straits. While the Covid pandemic has wound down and the federal government has put an end to the national emergency, the crisis in services continues because of the workforce shortage.
Hundreds of residential homes have closed, and thousands of individuals with disabilities have lost their homes. Many individuals with disabilities are living in homes with more restrictions than they need, many are living in nursing homes and thousands are living in hospitals, and some are living for weeks on end in ER units. Providers are in a position where they have two unacceptable choices: raise unreimbursed wages to recruit staff but risk bankruptcy, or manage their finances prudently but risk not having enough staff to achieve their mission or even assure health and safety.
In the end, the industry received a modest increase. You would think that with a $17 billion surplus and thousands of individuals in jeopardy, disabilities funding would have been one of the first items on a to-do list. You would be wrong. In particular, it was the Governor and the Minnesota House that were at best indifferent to these vulnerable individuals. This lack of support was not for a lack of advocacy and education by us; an original Homeward Bound founder, who now receives services from another provider, told me that the Governor alone received thousands of emails and phone calls about the issue. He certainly never cared enough to include additional funding in both of his budget requests.
It was the Senate that saved us, along with our disability champions of both parties in the House! It also took our trade association, ARRM, making the case day in and day out in committee hearings and one-on-ones with legislators. Homeward Bound staff emailed legislators and visited legislators and we held a tour with an influential senator at one of our homes. The Senate’s Omnibus Health and Human Services Bill went a long way towards ensuring that providers could pay a competitive wage in today’s labor market. It passed the Senate with an overwhelmingly bipartisan vote that told Minnesota that the Senate stands with vulnerable people! That bill was whittled down to a modest amount in negotiations with the House, whose own bill would have been disastrous. We shall see if the modest compromise stops the bleeding in the industry.
We are still awaiting ARRM’s official analysis of the new appropriations, but here is what we know so far about what the legislature did:
- ICFs are suffering particularly in this new labor market. It is one of the reasons why we are closing our Brooklyn Park facility. Each ICF will receive $40/day per person, which will help us at our Maple Grove and Plymouth facilities. The legislation also established a new rate floor and will schedule rate increases every two years based on Consumer Price Index data beginning in 2026. The rate floor is too low to help Homeward Bound, thereby leaving facilities that need it the most, metro facilities that serve those with severe disabilities, unaffected. And the $40 increase does not occur until January of 2024.
- The legislation will move up an increase in waivered services from November of 2024 to January of 2024, by revising the rate calculation worksheet we use. This increase should average 6.2% across the entire state. It is not clear yet how much that will mean in employee raises and when we can implement them.
- We will not receive all the waiver increases at once; each person’s increase will come when his or her Service Agreement is renewed. This occurs on a scheduled basis over the year; so in some cases we might receive the increase for several months in 2024, in others it might only be a few months. It will not be until 2025 until we receive the full, annual amount. What this means is that providers with difficult finances will have to fund wage increases for a significant period of time.
- There will be some good reforms made to the rate increase process for waivered services in the future. The increase process will be shortened to every two years, so the next increase after this coming January is due in January of 2026. And the “look behind” data used to calculate these waiver increases (Bureau of Labor Statistics & Consumer Price Index data) will be moved up by 10 months so these should better reflect actual conditions and inflation.
So we await the full ARRM analysis to see what the rules are around these increases before we begin planning. And we fervently thank our friends in the whole Senate, our champions in the House, ARRM, and all of the individuals with disabilities, their families and staff, who took the time to stand up for vulnerable people.