Managed Care Cuts Anger Disability, In-Home Care Groups

More than half of the patients at Cedar View Rehabilitation and Healthcare Center rely on Medicaid.
More than half of the patients at Cedar View Rehabilitation and Healthcare Center rely on Medicaid.

One of the state's Medicaid managed care plans is slashing the rates it pays for attendants to help the disabled and elderly with long-term care — angering in-home health providers and sparking fears that other plans could follow suit.

In a letter sent to care providers last week, Molina Healthcare officials said reimbursements for personal assistance services would be cut by 10 percent. That's the equivalent of about $1 per attendant hour — on top of the fact that care providers say Texas Medicaid already pays about $2 less per hour than any other state.   

Dennis Borel, executive director of the Coalition of Texans with Disabilities, said such cuts are devastating for programs like one his group runs that helps people with disabilities hire in-home attendants and manage their budgets.

“This is not something we could do,” he said, noting that his nonprofit already operates on a narrow margin. 

The rate cuts weren't entirely unexpected: In June, three months after Molina expanded to serve managed care clients in Hidalgo and El Paso counties, as well as surrounding areas, the company disclosed in a regulatory filing that its Texas premium rates wouldn’t be sufficient to cover the rising number of patients enrolled. 

Molina COO Terry Bayer said in a statement to The Texas Tribune on Wednesday that the company had implemented a new statewide fee schedule, including the cuts to personal care services, in an effort to manage and lower costs for the state.

“We anticipate that this change in reimbursement rates will cause challenges," she said. “... As a national managed care organization with experience serving the Medicaid population for more than 30 years, we know that these types of changes are necessary, but we also understand that they can be difficult."

Anita Bradberry, executive director of the Texas Association for Home Care and Hospice, said Molina should not have been surprised by the high enrollment in South Texas. While managed care plans are free to set their own rates, she said home health providers fear Molina's could be precedent-setting. Other health plans could consider curbing their rates. Or providers could opt out of Molina in lieu of other plans, leaving Medicaid patients with fewer options for care outside of institutional settings. 

“It just goes totally against everything that the whole state has been working toward,” Bradberry said. 

To make up for Molina’s cuts, Borel said, his group would either need to find other subsidies for the program or cut wages for attendants providing in-home care. Instead, the nonprofit decided to cut ties with Molina and canceled Molina’s sponsorship of an upcoming disabilities conference, Borel said, because “it got to the point where it simply wasn’t acceptable for us to be a part of this." 

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