Reeling Maine nursing homes fear wage hikes will be on expense bill

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AUGUSTA, Maine — Maine hasn’t set aside enough money to meet a requirement to raise wages for struggling nursing home workers, raising concerns that funding may not be in a bill spending before lawmakers leave Augusta for the year.

Lawmakers have approved raising the wages of direct care workers in nursing and residential care facilities to at least 125 percent of the state minimum wage last summer after years of the industry denouncing low Medicaid reimbursement rates that make it difficult to retain workers. Governor Janet Mills started releasing this money in January ahead of an expected rate hike in July.

The Democratic governor’s $1.2 billion spending proposal currently before the Legislature includes a one-time additional injection of $7.6 million to help cover labor costs and $25 million additional state and federal funds to offset the costs of the pandemic. This funding for nursing homes, including a cost-of-living adjustment, is also expected to come into effect by July.

This budget includes funds to increase reimbursement rates for other providers to 125%. But that doesn’t include care home workers as the State carries out a revision of the rates. That could be problematic for an industry struggling to attract workers while caring for vulnerable residents. With less than two weeks until the Legislative Assembly adjourns, care home interests argue the state must act quickly to ensure the workforce remains stable.

“[The money] doesn’t fill the void to keep the workforce we need to keep the facilities open,” said Angela Westhoff, CEO of the Maine Health Care Association, a nursing home industry group.

Five nursing homes have closed since 2021 in Maine, with many citing long-term staffing issues, declining occupancy, lack of affordable housing for workers and a year-long state vaccine mandate which had little overall effect on health care employment but hit nursing homes harder than many other metrics. Maine nearly lost two veterans’ homes in Caribou and Machias before lawmakers rushed through a bailout bill.

Although the shutdowns have eased in recent months, the industry is still reeling. A recent survey by the Maine Health Care Association over 200 members found that more than 40% of establishments considered staff to be at crisis levels, despite 55% offering bonuses and more compensation. Three-quarters of establishments reported increasing their use of contract workers.

The state is working on calculating how much money it would need to ensure workers meet that threshold, said Jackie Farwell, spokeswoman for the Department of Health and Human Services. But it was unclear whether that work would be completed in time to add it to that budget. She pointed many other bodies where Maine has helped the industry in the pandemic.

“The Department is committed to fully funding these tariffs,” she said.

Sen. Joe Baldacci, D-Bangor, who sits on the Legislative Health Committee, said a delay in increasing reimbursement rates could lead to further closings. Rep. Sawin Millett of Waterford, a top Republican on the budget committee, said the topic is expected to come up next week as his committee’s committee reviews the industry’s past funding.

“They’re definitely a concern,” Millett said.

But more money alone can’t solve all the problems facing nursing homes, said Jabbar Fazeli, who heads the Maine Medical Directors Association and administers a handful of southern Maine nursing homes. He noted that hostels were offering large signing bonuses and increasing salaries, but still had trouble finding workers.

Variable payment rates for Health insurance plans offered by private companies under contract have also affected the results of the installations. A potential solution is to allow foreign workers to enter the country faster to give nursing homes more candidates to retire, he said.

“People are doing whatever it takes to attract staff,” he said. “There just aren’t enough staff, unfortunately.”

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