Addus HomeCare Comments on Final Department of Health and Human Services Rule

Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home care services, commented on the final rule announced on April 22, 2024, by the Department of Health and Human Services (HHS) known as “Ensuring Access to Medicaid Services.” The rule incorporates new requirements governing Medicaid Services, including Home and Community-Based Services (HCBS). The proposed requirements are intended to improve access to care, increase transparency and accountability, and promote health equity for Medicaid beneficiaries, including those who receive home health services.

One provision of the rule, which was originally proposed in April 2023, mandates that state Medicaid agencies be required to ensure that a minimum of 80% of Medicaid payments for personal care and similar services be spent on compensation for the direct care workforce. The final rule has kept this requirement, however, it extends the period for states to comply to six years from four years after the effective date of the final rule.

Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare, stated, “As a provider of home care services, we support the stated goal of HHS to expand access to more services like ours for Medicaid beneficiaries while providing for a stable ongoing workforce. The new reporting requirements, additional monitoring and quality measures will strengthen necessary safeguards that promote more consistent care for the patients we serve. However, we are disappointed that HHS elected to keep the 80% payment threshold in place, despite over 2,000 comment letters to HHS from our industry and trade groups over the past year, which pointed out the significant challenges implementing such a provision would create. We believe a nationwide “one size fits all” minimum threshold is contradictory to the goal of ensuring access to Medicaid services, given the wide variance in state waiver programs, which directly affects the administrative burden in individual states. We were very pleased to see the extension to six years for implementation, giving states and providers a substantial amount of time to address the complexities of the rule.

“We will continue to evaluate the potential impact of all aspects of this rule on our business, as we will have at least six years to prepare for final implementation. We see many benefits for Addus, and we are fortunate to have the size, scale and market coverage to support our ability to manage through the new requirements. We will also continue to advocate for increased reimbursement for HCBS, which translates directly into improved wages and benefits for the direct caregivers who provide essential home-based services for our population of Medicaid beneficiaries.