Home Health 360: Presented By AlayaCare

Navigating the CMS 80/20 rule, Medicaid, and advocacy in home health modernization with Jesse Howard

• Erin Vallier • Season 1 • Episode 66

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What is the impact of the CMS 80-20 rule and recent Medicaid rate adjustments on the home health industry? Unlock the secrets to modernizing home health operations with Jesse Howard, Vice President of Operations for Girling Personal Care.  Jesse dives deep into the financial strains and staffing challenges home health providers face, particularly in Texas, where low Medicaid reimbursement rates and competitive wages make it hard to sustain quality care. Listen in as this episode presents a comprehensive understanding of how these financial pressures affect operations and what home health agencies can do to stay competitive.


If you liked this episode and want to learn more about all things home-based care, you can explore all our episodes at alayacare.com/homehealth360.

Jesse Howard:

On a just a day-to-day basis, we are pretty much already at 80-20. Of course, that is most profoundly affected because of the very low Medicaid reimbursement rates that we live today and then just trying to be competitive in a very competitive atmosphere. Things are pretty good in the state of Texas and we compete with the same pool of potential employees that every other retail manufacturing, every industrial group that's out there. The de facto minimum wage in the state of Texas has to be somewhere close to $15 to $17 per hour, which is really above my Medicaid reimbursement rates. So already pretty much in the 80-20 space when you start thinking of 80% of those reimbursements having to go to those home care workers.

Erin Vallier:

Welcome to another episode of the Home Health 360 podcast, where we speak to home-based care professionals from around the globe. I'm your host, E erin Vallier, and today I am joined by Jesse Howard. Jesse is the Vice President of Operations for Girling Personal Care, which is a home health organization licensed in all 254 counties with 16 locations throughout Texas. They serve thousands of Medicaid recipients as well as veterans and private duty clients. Jesse has been in the home health space for over 20 years, starting in the medical equipment sector, but he quickly hopped over to the home health industry. Over his tenure, he has served in a variety of sales and leadership roles and has been in his current role since 2018. And when Jesse is not thinking about how to solve all the problems in home health care, you can probably find him fishing or maybe hanging out with his wife of almost 40 years, or one of his three kids or two grandchildren. Welcome to the show, J jesse.

Jesse Howard:

Man, you made me sound so good Wow.

Erin Vallier:

Well, I think you are so good. We have a hot topic today, and that is how to modernize your operations to survive in today's home health environment. Are you ready?

Jesse Howard:

I have a lot of opinions. I don't know what they're worth, but I have a lot of opinions, Erin.

Erin Vallier:

They're expert opinions. People, they're expert opinions. Let's dive in opinions. Let's dive in. Given the recent passing of the CMS 80-20 rule and the significant rate changes for Medicaid services, how are these regulatory changes affecting operations in general, maybe even your operations, and what strategies can you implement to mitigate their effects?

Jesse Howard:

So maybe we can pick it apart a little bit. The 80-20 rule, erin, honestly I don't know where that's going to land. You know a couple of factors. We've got a federal election coming up very soon, at the end of 2024. Depending on how that election shakes out, this all may be a moot point right? We've seen all kind of policy changes happen, with administration changes. And then the other part is what is it? A six-year roll-in or something like that, six years before it's implemented? So in our life, six years is a long time.

Jesse Howard:

On a just a day-to-day basis, we are pretty much already at 80-20. Of course, that is most profoundly affected because of the very low Medicaid reimbursement rates that we live today. And then just trying to be competitive in a very competitive atmosphere. Things are pretty good in the state of of Texas and we compete with the same pool of potential employees that every other retail manufacturing, every industrial group that's out there. We're all vying for the same employee right and the de facto minimum wage. This is not scientific, but just driving up and down I-35 and looking at billboards, the de facto minimum wage in the state of Texas has to be somewhere close to $15 to $17 per hour, which is really above my Medicaid reimbursement rates, so already pretty much in the 80-20 space, when you start thinking of 80% of those reimbursements having to go to those home care workers.

Jesse Howard:

As far as low reimbursement rates and the challenges that we have as a provider today in the state of Texas we did get a very nice increase for our PCAs, which is wonderful. Prior to that the rate was $8.11. We got a nice $2.49 raise for those folks in 2023. But unfortunately, the way that the reimbursement rate was rolled out, payroll taxes and benefits were calculated differently and that resulted at about a $0.35 per hour loss to providers. And when you throw a negative $0.35 per hour in there with the fact that we've not gotten any type of operational increase in over 17 years, it just was very brutal. Every provider that I'm aware of always dipped way past what the minimum rate for PCAs were to pay additional rates just to try to recruit and try to retain employees. So when you take another 35 cents an hour away from me, it really hurts.

Jesse Howard:

The other part that we so many times overlook and just don't address it's important to address the home caregivers we have to right those are the folks that are on the front lines out there.

Jesse Howard:

We've got to get those folks out there, otherwise we never serve the hours that Mr and Mrs Jones are approved to receive. But we have a team of operational employees, administrative employees, that are out there managing and helping us manage the electronic visit verification system, and all of those so-called profits that providers should be receiving go to pay all of those folks that do that administrative work. And those folks are also being hired at very competitive wages as well. So when you think of call centers that are out there and so many other jobs that are available, I can't hire those folks at $10 an hour. We have to go way above and beyond. So it all goes into the 35 cent per hour loss, which means there's less operational funds to go around to help me be competitive in a very competitive space and then, of course, to retain those people. At the end of the day, profits are not a dirty word. Profits are the engine that keeps businesses moving right.

Erin Vallier:

Yeah, it should reflect the impact that you're having. There's nothing wrong with making a profit. More profit means you're serving more people.

Jesse Howard:

That's right, as you continue to narrow margins. At the end of the day, how far do you narrow margins where providers just can't provide the service? We all know there's a shortage of caregivers, which means we're all spending more dollars to recruit and to retain employees and, again, without the profit side of it, I can't hire the operational teams to support the business that I'm mandated to manage. So it's been quite a challenge.

Erin Vallier:

What's your magic bullet, because I don't like the math that you're talking. It seems like, just visually, you're in the red, no matter what you do, so is there a strategy that you can use to mitigate it? Does that mean diversifying payers or like? What do you do?

Jesse Howard:

You know, we try to be as efficient as possible.

Jesse Howard:

We try to use technology to manage our business. We do everything we can to use technology to help us recruit what worked yesterday in the old green sheet newspapers and Craigslist maybe they're not always the most productive, so you have to look under every rock trying to find a way to reach people volume game. We have unprecedented numbers and even the state of Texas has reported this. So I know we're not alone, aaron. We have unprecedented numbers of what we call providers of choice, and what that is is where Mr and Mrs Jones may have a family member that qualifies or a good close friend of the family that they trust that qualifies to be a caregiver. So that's one of the ways that we've worked to try to recruit people and it's been effective. And again, like I shared with you, I know that we're not alone in that, because the state of Texas published a very comprehensive white paper and I think they quoted caregivers of choice at around 70% of the workers in the state of Texas and you know that's pretty spot on.

Erin Vallier:

Wow, that's big. Okay, you know, that's pretty spot on Wow that's big.

Erin Vallier:

Okay, you touched on a lot of things that I think we're going to dive into in more depth as we get into this conversation, which was efficiency, maximizing the use of technology and being creative with recruiting. Let's peel back the onion here. So, beyond those regulatory changes we just talked about, there's other challenges Staffing, which you touched on a bit, operational efficiencies, which we haven't really dug into that much, but these things are making it difficult to run your business effectively. So tell me a little bit how you can address these challenges and maintain stability and the quality of care that you're delivering.

Jesse Howard:

Erin. I don't want to speak for the industry, so these are just where I see things, my opinion of what can be done, and I think that our biggest challenge and the most impactful thing that providers like us can do is to continue working with legislators to educate them on the needs, the impact of not addressing these reimbursement issues on the Medicaid recipients, educating them on the fact that community-based home care costs one-third the amount of facility care. The truth is, we're going to pay for health care. It's going to get paid, right. You're going to pay providers, whether it's personal care, private duty, nursing or home health. Whatever the case may be, we're going to pay for that. Now, it may be paid at the ER level, it may be paid at a nursing home level, but we have proven that home-based home care can save two-thirds the amount of money that's typically spent when a client or a patient goes to a higher level of care. So we just have to educate those legislators on yeah, it sounds like an increase to me that you're just throwing more money at personal care, but at the end of the day, the overall spend is reduced because you're saving two-thirds on the back end.

Jesse Howard:

So I think that's where our largest challenge and largest opportunity is I'm really pretty new when it comes to going to the Capitol and talking to legislators. It's just something I just really don't have a history of, and it's really been very eye-opening to see how many people are in their doorway with their handout. So I have an appreciation that when I show up and start talking about personal care, they're like who are you and where do you plug in? Because there's every industry is doing the same thing, right? So fortunately we've had our champions that either come from a home care space or for whatever reason, have been able to really understand what it is we do. But honestly, Aaron, I think that's our largest opportunity and largest challenge just trying to really distill this information and the needs, the very real needs, down to the level where legislators can grasp it and hopefully support what we're trying to do.

Erin Vallier:

And we have six years to do it, because that's when the roll's out. So, everybody listening, get involved at the state and the national level and use your voice. Yeah, that's what I'm hearing you say. All right, so let's talk about what you can do to stay afloat in the interim. Taking our voices to legislative authority is going to take some time and we still have to run our businesses until they start listening to us. So how crucial is it going to be for home care providers to modernize their operations to remain competitive and live viable, to remain competitive and be viable.

Jesse Howard:

It's imperative. What's that old saying If you're not moving forward, you're moving backwards, because there is no, just idle. Everything is moving one way or the other. So we have to keep moving. And goes back to what I shared. We're spending unprecedented dollars trying to recruit. We're looking at every avenue. I can't tell you how many different avenues we've attempted to recruit. Avenue. I can't tell you how many different avenues we've attempted to recruit. Sometimes they're not fruitful.

Jesse Howard:

We move on, but at the end of the day, our task is to deliver as many appropriate hours that Mr and Mrs Jones is authorized to receive in their home. Right, and we have a caregiver shortage in our company, just like every other provider that I know of. There are a number of providers that I keep up with frequently we talk, so I know that we're not alone. We continue to look for every opportunity. And then, of course, the efficiency of just trying to deliver that care in a most efficient manner with as few touch points as we can, because, at the end of the day, every time one of our employees has to get involved in the whole process, that costs money, right. So trying to make that as efficient as possible so attendants are confident and comfortable with showing up when they're supposed to show up and clocking in and clocking out when they're supposed to. And we've done some things to really try to grow our employee satisfaction because, it's true, not everyone works for money. It's absolutely important, right? If you stop paying me, I'm not sure how long I'll stay around, but at the end of the day, money is not the only reason I'm here, right, and I think that's true for every person in our company. So we've spent a lot of efforts and it's really paid off. This is something that we measure. I think it's kind of an industry secret of ours, so I'm not going to go into detail but we've really spent a lot of time investing in our PCAs and it's made a difference. It really has.

Jesse Howard:

So those kind of things, just looking for an opportunity where people are happy to go to work, they're satisfied with the work that they do and they want to keep showing up. So, anyway, everybody has their challenges and it doesn't matter if you're an attendant or if you're a coordinator or if you're the vice president of an operation. Everybody has challenges, right, and everybody has days that you're like, oh, my goodness, I got to do this again or my goodness, that day went wrong. Everybody has days like that. But at the end of the day, do I make it easy for my employees to show up? Do they understand the importance of what they do? Do they understand what needs to happen if something goes wrong during their day? Right, so people don't have that frustration of wondering and people don't have the frustration of saying, well, I don't know who to turn to right. So we've spent a lot of time really trying to improve that situation where people are just happier to show up and do their job.

Erin Vallier:

So what I'm hearing you say is, in terms of modernization, it's imperative and the focus should be on making your employees feel safe and supported and that they like the tools that they're using and their jobs are way more efficient with those tools than without them. Can you elaborate on some of the risks of not adapting to this evolving landscape we find ourselves in?

Jesse Howard:

Well, certainly the downside is you're going to have to serve fewer clients at some point. You just can't do that. We have picked up business in various parts of Texas from other providers that have decided to get out of personal care, out of the Medicaid business. It's interesting that the ones that have were sticking around and doing private duty home care, but they're just not going to deal with Medicaid anymore. So that's what happens. That's the reality. If people are not able to have a margin where they can continue to pay employees and it's a viable business people are going to move on. So I don't think the state of Texas wants to be a Texas Medicaid-run business for personal care. I think they want to continue to contract with providers like me. Providers have to be profitable. Right Providers have to be able to give a return to their investors. It's like I said earlier profits are not a dirty word, they're purely the engine, or maybe the gasoline. Maybe that runs the engine right.

Erin Vallier:

Absolutely, absolutely. So when we talk about modernizing operations, what exactly does that entail in your opinion.

Jesse Howard:

Well, you want my 30,000-foot view because I'm pretty passionate about this.

Erin Vallier:

Yeah.

Jesse Howard:

Give it to me, to me, as I shared with you. Information, connectivity all of those things are our future. We know that right. But there is still a huge opportunity that I think we're missing with not sharing client health information, real-time connectivity to clients and caregivers, to really and truly minimize ER visits and make a huge difference in the life of these clients.

Jesse Howard:

Personal care is in the home more hours per week than any other industry. Home health can be there, but that's intermittent. Hospice can be there, but they're going to be there to do tasks and meet the needs of the particular client or patient and family at specific times. Obviously, facility care is not in the home. Even house call doctors, they're not in the home hours like we are.

Jesse Howard:

Aaron, I was part of an organization a number of years ago where we developed a team that really kind of surrounded the client or the patient and we had nurses, we had home health, we had hospice, we had nurse liaisons and we helped to ensure that the client was receiving the proper level of care. This was something the clients or patients and families could opt into and we had follow-ups in place where we were making sure the client was receiving what they needed at the right time, whether it was a discharge from the hospital to home. Did they understand the discharge papers? Did they get the medications that they needed when they got home? Did they get the appropriate medical equipment? Once they got home, did Mr and Mrs Jones say, look, we're going home, we can do this on their own. And two days later they found out that, oh my gosh, this is just overwhelming, we need more help. So we were there to pick those pieces up and provide the care they needed when they needed it, and it was just a great thing. We were able to reduce hospitalizations and, of course, that very important return to the hospital right. So many times there's medication errors. People get out of the hospital on Friday and they're back in the hospital on Tuesday. So we were able to do a lot of those things and really provide, I thought, great care.

Jesse Howard:

And so, in my mind, what I keep thinking is that we need to get out of our silos. Yes, we get referrals from the state of Texas, we get referrals from different managed care organizations, but there is just so little communication in terms of what medications is the client on, what's been their disease processes. I really and truly see a world if we could do it. Where personal care is used by the state of Texas or used by the managed care organizations, where there's more resources, there's more education, where we can really and truly have lines of communication built, where our caregiver understands what's going on in the life of that patient every day and when they go in there they see and understand signs and symptoms of something going wrong. There's a nurse that they can call and say hey, I'm Jesse, I'm here to see Erin today. And when I got here, erin really looks like she's having struggle, breathing right. And we put Erin on the phone and the nurse can kind of walk through with Erin. What's going on, right? Well, yeah, I didn't weigh this morning and I didn't take my medications last night. Okay, well, let's do this right, and I'm making that up, aaron, I am not a clinician, so I'm not giving you medical advice.

Jesse Howard:

But, again, we spend so many hours in the home and, yes, it's important what we do every day. I mean, we truly help people stay independent with our bathing them and helping them, getting dressed and making sure they have food to eat and preparing that food so they have the nutrition that they need, but there's just so much more care that I truly believe could be delivered. But I don't control the purse strings and, as I reminded you earlier, we're going to pay for this care. One way or the other. We're going to pay for the care. I just really believe someone smarter than me could really move the money around and connect us all in a better way, whether it's certainly EMRs. In the age of information, I know EMRs can talk to each other. Let's share that information, let's put the resources in place where, if something is going on, we can very quickly escalate it and then maybe diffuse a situation.

Jesse Howard:

But that's going to take so many people involved. It's going to take legislators willing to take a hard look at where's the money being spent. It's going to take HHSC. It's going to take MCOs the willingness to look at where the money's being spent. It's going to take MCOs the willingness to look at where the money's being spent and then really start moving this money around. Making it up. We get more money or the MCOs move the money from one place to another where different divisions have more resources. That, at the end of the day, de-escalate all these situations that Mr and Mrs Jones have, because, let's be honest, one trip to the ER is going to be about $14,000, $15,000 or more. Right, you can buy a whole lot of personal care for $14,000, a whole lot.

Jesse Howard:

So I know I'm kind of on my bully pole bit, but when I think of modernization my mind goes from just computers to really a whole change in the way that we do business, because today there's just very little transparency in terms of what medication error rates, disease mortality rates, disease-related healthcare spending rates I just see very little of that. Again, I keep throwing the disclaimer out there. Somebody smarter than me that truly has the spending ability to really take a look at this and let's just be honest about it Where's the money going? And let's kind of reverse engineer this thing, aaron, and say the money's going here, what is out there today that could really impact the overall spend? And hey, maybe somebody's done that in the back room, but I don't feel it, I don't see it. Somebody's not listening to them. I don't think they are. I'm just a little cog in the wheel, aaron.

Jesse Howard:

So you've allowed me to throw a 30,000 foot view out there and a lot of this is kind of a reflection on where I've been and I saw the impact that we were able to make and I just think there's a great opportunity for the state of Texas to really develop some, maybe a task force with the right people to reverse engineer and I think that's the right term. Just reverse engineer healthcare today and let's look at where the money spent is. Let's not be greedy. Let's really and truly think about where is the money being spent, who's it being spent on and is there a way to minimize that? You know, for tomorrow.

Erin Vallier:

Yeah, I appreciate you sharing your perspective, and I think that it's not just a Texas problem. I think it's applicable to every single state in this nation. We all have our own version of what's going on in Texas. For sure, these lessons are universal, and what I'm hearing is we just need a paradigm shift in our business structures so that we're not so siloed, and we need to modernize our processes so that we can communicate across the whole spectrum, all the levels of care, and the thing that ties it all up is this beautiful technology bow. And I want to ask just a question about technology, because I know that you guys heavily leverage technology. You're a fan of leveraging technology so that you can do more with less. What are some key functionalities or support that the industry needs from your technology partners in order to facilitate modernization effectively?

Jesse Howard:

Boy? I'm not sure I have an answer for that. I know we live in the weeds on a day-to-day basis, just with everything going on and the sheer effort of recruiting, retaining, trying to get our attendants to clock in and clock out as they should. That's an effort we continue to learn every day. We are fine-tuning that to meet the needs. So I think there's more efficiencies to be found there.

Jesse Howard:

I know that one thing that we continue to struggle with and we still have not found the real key, and that's a very efficient way to communicate with our attendants in the field. I think we're getting there, but I know that there is just huge upside if we could really be very efficient with that, as I shared with you a little bit ago. You know we've done a lot to really work with them, to communicate, make sure that they're pleased with what's going on and all those kinds of things, but there's a great opportunity, I think, to communicate more with them. What generation are we on? Are we on generation X, Y, Z? I don't remember which one. I'm older than you, Erin, so I don't know what.

Erin Vallier:

In a couple of years we're going to have to start the alphabet over.

Jesse Howard:

So this generation and I'm just thinking, you know, I've got a daughter that's going to be 23 coming up here in a little bit and she goes nowhere without her telephone, right, and I've even fallen prey to that a little bit how efficiently can we, on a daily basis, communicate with our employees, whether that and I'm not condoning WhatsApp or anything else there are just so many methods of communication today. Getting information, maybe it's just general information, maybe it's just things that are check-ins and things like that, so there's a great opportunity to have better connectivity with our attendants. So when I think of technology as something that's needed today, most specifically today, that could, I think, really make a difference on our business, that's one thing that my mind comes back to. Not sure I answered your question, erin.

Erin Vallier:

I don't know. It was a great answer. You need more support reaching your field workers in a way that is easy and effective, and you need a way to streamline your back office so you're not spending too much time with the visit verification so you can get paid in a faster method. That was an excellent answer.

Jesse Howard:

You say that so much more eloquently than I could.

Erin Vallier:

I was just listening to everything you said. You said that yourself. I just have one more question for you. If there's any final thoughts, you have any essential keys to success that you want to share with the home care providers that are listening today on how to modernize their operations, I would love for you to share.

Jesse Howard:

Well, erin, I think we probably have more questions than we have answers. To be quite honest with you, it's been a challenging number of years, especially since COVID and everything COVID did to all of us and when I say that, I'm talking about from providers to clients to attendants. It's just a different world. Honestly, we're living in a very different world. People have different mindsets than they did today, and the only thing I know to tell anybody what to do or what may be the next step is just to keep trying different things, and I'm not being cliche, I'm being very sincere when I say this. We have tried and failed so many different things and we keep trying. Sometimes we hit upon something that works, but we just don't have the answers. So we keep looking and trying different things that really may make an impact, and we've stumbled across some things that make an incremental impact and sometimes we've had some that had a little bit more impact.

Jesse Howard:

If I was to share any advice with anybody out there, just keep trying different things, right? I hope you would hear from the people that I work with If you ask them. I think, and I hope they would tell you, that I never walk into the room thinking I have all the answers, because usually I don't. There's almost certainly someone smarter than I am in the room. So I think that's just the attitude you got to take, right, and just keep asking and digging and don't be embarrassed if it doesn't work. Don't be egotistical about it. So I don't know. That's all I got for you.

Erin Vallier:

That's sage advice right there, though. Try something. If it doesn't work, learn from it, try something else, and keep doing that until you figure it out, because there really is no failure. You just learn what doesn't work. Yeah, just keep learning and keep growing. I love it. Jesse, thank you so much for hopping on the show today and sharing all of your wisdom with our listeners. It has been an absolute pleasure.

Jesse Howard:

Well, erin, you're very kind. Thank you, I appreciate you included me in this. You have a great day.

Erin Vallier:

Home Health 360 is presented by Alaya Care and hosted by Erin Valliere. First, we want to thank our amazing guests and listeners. Second, new episodes air every month, so be sure to subscribe today so you don't miss an episode. And, last but not least, if you like this episode and want to learn more about all things home-based care, you can explore all of our episodes at aliacarecom slash home health 360 or visit us on your favorite podcast platform.