Sign Up to Receive PHI Alerts

Aides Expected to Feel Brunt of N.J. Managed Care Company’s Reimbursement Rate Cuts

September 6, 2012

Horizon NJ Health, the largest of the four managed health care plans that administer New Jersey’s Medicaid program, is planning to cut its reimbursement rate by 10 percent to providers of personal care assistance services beginning October 1.

Providers that participate in the managed care company’s network say the reduction in the hourly reimbursement rates — from $15.50 to $13.95 — will be passed onto the aides, leading to higher turnover and more inexperienced aides on the job, reported the NJ Spotlight.

The providers must agree to the change by September 14 or leave the Horizon NJ Health network.

“As they push down the wages of the home health aides, the only agencies that are going to survive and service Horizon clients are the ones who will take people off the streets as aides, cut corners on services, or cut corners on training,” said Ken Wessel, president of the Home Care Council of NJ and a nonprofit home care agency director.

The median hourly wage for personal care aides in New Jersey is $11.58. About 30,000 personal care assistants are employed by 170 agencies in the state.

Horizon NJ manages care for 48 percent of the 155,000 people with Medicaid in New Jersey.

“The whole state strategy of keeping people at home and out of nursing homes comes down to the aides,” Wessel said. “Once you cause them to go to McDonalds or Burger King for better wages, they won’t come back and agencies like ours might not be around.”

About 155,000 people covered by the Medicaid fee-for-service program in New Jersey were moved into the managed care programs over a three month period beginning July 1, 2011.

The three other managed care plans that participate in the state’s Medicaid program — Amerigroup New Jersey, Healthfirst Healthplan of NJ, and UnitedHealthcare Community Plan — are not planning to cut their PCA provider reimbursement rates, noted the NJ Spotlight.

— by Deane Beebe

Share This

Caring for the Future

Our new policy report takes an extensive look at today's direct care workforce—in five installments.

Workforce Data Center

From wages to employment statistics, find the latest data on the direct care workforce.