State Fiscal Year 2024 Budget Negotiations Continue

The Michigan Senate and House of Representatives began moving their versions of the state budget for fiscal year 2024, which begins October 1, 2023. Included in the budget proposals, and in the governor’s recommended budget, are two areas of interest to Michigan’s nursing facilities.

Continuation and Expansion of the Direct Care Worker Wage Increase

• Governor: The governor’s recommendation includes funding to expand the direct care worker wage increase to additional nursing facility employees. For the last several years, the wage increase has applied to only CNAs, LPNs, RNs and respiratory therapists. The governor’s proposed budget allocates funding to non-direct care workers in facilities, such as housekeeping staff. The funding also includes an increase of the wage pass through amount – currently at $2.35 per hour – to as much as $3.85 per hour.
• House: House Bill 4310 includes funding to increase the direct care worker to $4.85 — of which $3.85 would be ongoing and $1 would be one-time funding. The house bill does NOT include funding for non-direct care workers.
• Senate: Senate Bill 190 includes funding to increase both direct and non-direct care worker wage increases to $3.00 per hour.

Funding to Transition to a New Reimbursement System

• Governor: The governor’s budget proposal includes funding to transition Michigan’s nursing facility Medicaid reimbursement to a new system. HCAM continues to work with members, the Michigan Department of Health and Human Services (MDHHS), and consultants to model a new reimbursement system that ensures adequate reimbursement and reduces the administrative burden on providers and the state. The funding in the budget includes $110 million — $10 million for information technology improvements within MDHHS as well as $50 million in each of the next two years targeted at transition support for providers.
• House: House Bill 4310 also includes the full $110 million for the transition support.
• Senate: Senate Bill 190 does NOT include the $110 million.

Next Steps

The legislature and administration have both indicated their goal to pass the budget in June. HCAM continues to engage with legislators and the administration to ensure these programs are implemented in a way that supports nursing facilities, their staff and their residents. First, HCAM is advocating against a one-time wage increase, and instead, is pushing for more sustainable options and guidelines as to which employees would be eligible for the wage increase. Second, HCAM is advocating for inclusion of funding to assist providers with the transition to a new reimbursement system. Additionally, the association seeks official assurances that fiscal year 2022 cost reports will be used to set rates beginning October 1, 2023. We will continue to provide updates as the budget process continues.