H04-074 – Policy/Procedure

August 24, 2004
TO: / Area Agencies on Aging Directors
Home & Community Services Regional Administrators
Division of Developmental Disabilities Regional Administrators
FROM: / Penny Black, Director, Home and Community Services Division
Linda Rolfe, Director, Division of Developmental Disabilities
Kathy Marshall, Director, Management Services Division
SUBJECT: /
Contracted Homecare Agency Vendor Rate Increase – Effective October 1, 2004
Purpose: / There are two purposes in issuing this Management Bulletin (MB). The first is to notify the field that the vendor rate for contracted home care agency providers will increase to $14.93 effective October 1, 2004. The second is to communicate to home care agency providers how this increase is to be utilized.
Background: / In the 2004 session, the legislature approved a vendor rate increase to home care agencies effective October 1, 2004. The new vendor rate will be $14.93 per hour. The increase is to be used as follows:
  • $.50 to increase the hourly compensation for direct care workers
  • $.06 for the employer share of unemployment and social security taxes associated with the $.50 compensation increase
  • $.10 to address the impact of compensation increases on non-billable hours such as paid leave and other compensable hours paid to direct service workers. Examples of these types of compensation that are built into the vendor rate include travel time, administrative time and paid leave where offered. $.06 is to address the $.75 compensation increase
given October 2003; and $.04 to address the $.50 compensation increase for October 2004.
What’s new, changed, or
Clarified /
  1. In the budget proviso, the legislature uses the term compensation rather than wages. Therefore, the $.50 increase to direct service workers can be used to enhance hourly wages and/or benefits. Examples of benefits might include an enhancement to the medical benefits reimbursed by the State, dental benefits, paid leave, pension, bonuses, etc. The above is not an exhaustive list of items that would be considered compensation.
Home care agencies must demonstrate that the full $.50 is used to give an average compensation increase to direct care workers. The budget proviso does not require that each worker get the same increase. The agency provider determines how the resources are distributed, provided the increase, in aggregate, has gone to direct care worker compensation.
  1. The budget proviso changes the term “wages” to “compensation” for the $.75 increase granted October 2003. This grants similar flexibility in utilizing the $.75 given last year to a wages and/or benefits.
  1. $.04 was given within the vendor rate to address compensation to direct care workers for non-billable work hours that are covered within the vendor rate. Examples of work time that must be compensated include paid leave, travel (windshield) time, administrative time and overtime. The additional $.04 in the vendor rate increase is to be used to increase non-billable compensation commiserate with increases given for client hours. Employer taxes associated with the increase are included within the $.04. Home care agencies must demonstrate that $.04 of the increase is utilized in this manner.
  1. $.06 was given to address the compensation increase granted October 2003 related to non-billable work hours that are covered within the vendor rate. There were no additional funds appropriated for the period October 2003-September 2004. The additional $.06 is given from October 2004 forward. If agencies have already increased the average compensation to direct care workers for all hours worked by
$.75 or greater, then they have already demonstrated appropriate use of this portion of the increase.
If an agency increased average compensation to direct care workers for all hours worked by less than $.75, the $.06 is to be used to increase compensation for all hours of work commiserate with the $.75 increase given October 2004. Again, within the $.06, funds were given to cover expenses related to employer taxes.
ACTION: /
  1. Home care agencies must increase their compensation packages to direct service workers in a manner that is consistent with legislative direction and intent. This includes providing an average compensation increase to direct service workers of $.50 per hour. In addition, specific funding was given within the vendor rate to address the impact of the 2003 and 2004 compensation increases on non-billable work hours related to paid leave, travel time, administrative time and overtime. Funding was also appropriated for the employer share of taxes.
  1. Area Agencies on Aging (AAA) must monitor contracted home care agencies to assure that the vendor rate is utilized in a manner that is consistent with the legislation. A letter from a collective bargaining entity verifying that the compensation increases were given as required could be sufficient documentation of compliance.
  1. AAA contracts with home care agencies must include the new vendor rate, stipulations on use of the vendor rate increases, and that misused funds could be recaptured.

Related
REFERENCES: / ESHB 2459.SL, 2003-05 Revised Omnibus Operating Budget
ATTACHMENT(S): / None
CONTACT(S): / Bea Rector, Program Manager
Telephone: (360) 725-2560

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