The shutdown of a major nonprofit home care provider in one state has motivated lawmakers to seek emergency action to the tune of $8.5 million. The move is a reminder of how important home-based care has become for state policymakers.

Maine State Senator Shenna Bellows, a Democrat, recently announced plans to introduce emergency legislation that, if passed, would raise reimbursement rates for home care providers in her state. Specifically, the bill would provide $8.5 million to help keep home-based care providers afloat. 

In recent years, providers within the state have struggled due to minimum wage hikes, stagnant reimbursement rates and other headwinds.

For context, Maine’s minimum wage increased from $7.50 to $9.00 in 2017; it then went up to $10.00 in 2018 and to $11.00 the following year. Currently, the state’s minimum wage is $12.00, thanks to another raise at the beginning of 2020.

Maine isn’t an anomaly. Over the years, minimum wage raises have been implemented in a number of states. No less than 21 states started 2020 with a higher minimum wage requirement than the previous year.

Further compounding matters, reimbursement rates under Maine’s Medicaid program haven’t correspondingly risen in the midst of ongoing wage increases.

“Anytime you have a fixed price with the government, you’re going to run into this problem,” Dr. David Macpherson, an economics professor at Trinity University, previously told Home Health Care News. “Even in other cases when [providers] can raise prices, higher wages will still force firms to lay off workers.”

Farmingdale, Maine-based Home Care for Maine found itself facing the fallout. In February, the home care provider announced that it was closing shop due to financial issues.

Home Care for Maine closing leaves a gap in the state’s senior care coverage, Newell Augur, an attorney at Pierce Atwood LLP, told HHCN. Augur served as the company’s counsel. 

“The vast majority of their patients were Medicaid eligible and many were in rural parts of the state,” he said. “Home Care for Maine is reasonably confident that their workers will find new employment. We are not confident that we will be able to successfully transition all of the patients to other home care agencies, and that’s a disturbing, unsettling proposition.”   

In total, the shutdown leaves roughly 600 patients without home care, with about 365 workers will be out of a job.

“The devastating closure of Home Care for Maine in Farmingdale has got to be a wakeup call,” Sen. Bellows said in a statement. “This is the result of decades worth of inadequate action that has kept reimbursement rates too low at the expense of Maine seniors and personal care workers. We have to be better. It’s time for Maine to step up.”

Sen. Bellows is not alone in her efforts to address what she refers to as a crisis.

Just last month, Maine’s labor commission called for an increase in Medicaid reimbursement rates to offset providers’ costs, along with a requirement that caregivers be paid no less than 125% of the minimum wage.

“Many providers serve primarily MaineCare recipients – and getting the reimbursement rates better aligned with the cost of delivering care is essential to remain viable and sustainable,” Laurie J. Belden, executive director of Home Care & Hospice Alliance of Maine, previously told HHCN.

Although the full details of the emergency funding are not yet publicly known, the bill has received bipartisan support, giving it a decent shot of becoming a reality. If the bill does pass, it may even be matched with federal funds, according to Augur.