Health and Human Services Budget Bills Released: Senate Bill Includes Key Workforce Funding Priorities

Posted on April 7, 2022 by Jeff Bostic

This week the House and Senate have each introduced supplemental budget bills that fund health and human services areas. We were pleased to see that the Senate bill provides significant funding for the Long-Term Care Imperative workforce agenda. Unfortunately, the House bill does not, but the bill does include a few scattered positive elements.

The Senate bill includes $225 million in state funding over the next three years for nursing facility rate increases. That funding is first used to provide a known cost change factor starting in 2024 to close the gap between the annual rate and the costs from more than two years prior that were used to determine it. The remaining funding is distributed evenly by resident day to be used to provide permanent wage increases. The bill also moves most wages currently in other operating (dietary, laundry, housekeeping and maintenance) into a cost-based portion of the rate. This funding package is one of our key priorities and is vital to addressing the workforce shortages plaguing providers.

The Senate bill also includes over $100 million in funding over the next three years to fully implement the Elderly Waiver (EW) rate system we have been proposing since 2017. That section also re-links disability waiver customized living rates to the EW rates and updates the rates for wage costs on an annual basis. This much-needed reform will aid providers who have struggled to serve numerous EW clients at rates far short of covering costs.

Unfortunately, the House bill does not include these hugely important funding needs for long-term care providers. We are disappointed to see their inadequate response to the magnitude of the need with the ongoing workforce crisis.

The House language addresses some of our less-costly priorities, however.

The House bill makes alternative (virtual) adult day a permanent service offering, which preserves an essential piece of flexibility for those providers and the people they serve. It also provides funding for a rate study and study of setting up the administration of the Program for all-inclusive Care for the Elderly (PACE). We are very hopeful of seeing that funding finally pass, so we will have the opportunity to bring that innovative program to Minnesota at last.

The House bill also adjusts the Elderly Waiver rate system, but they stop far short of fully implementing the rates. The House moves the percentage of the new rates used in the calculation from 18.8 to 21.6% and includes a provision that updates the rates every two years, at the cost of $82 million in state funds over three years. While a step in the right direction, it does not invest in the new system rates, which are desperately needed for the seniors who use EW.

The House bill also includes several one-time funding adjustments from the Governor's supplemental budget proposal and some additional policy proposals impacting aging services providers. A list of the most significant items includes:

• Money to the Minnesota Department of Health (MDH) for assisted living and home care survey activities; $12 million in special revenue fund, not general funds
• Safety Improvements Grants for Long-Term Care; $13.7 million
• Change of Ownership language changes; the Long-Term Care Imperative has worked on with MDH and DHS
• MDH Assisted Living Licensure language technical changes; Long-Term Care Imperative has worked on with MDH
• Nursing Home Standards Board Establishment; Long-Term Care Imperative is opposed to this language
• Workforce grants to long-term care providers for retention and recruitment activities, including bonuses; $118 million

There is a long road to reaching a final supplemental health and human services budget bill that funds our most urgent priorities. We encourage all members to take action now to tell legislators that they need to make funding aging services a priority.