WV in-home health care company lays off workers after state leaders fail to address Medicaid issues

Village Caregiving is a Barboursville-based company that provides in-home senior caregiving — helping older West Virginians to retain their independence.

In one of the nation’s most elderly states, a staff shortage can delay in-home care; it may even force some people to enter a nursing home.

This week, the company laid off nurses along with senior-level staff in West Virginia offices that rely on Medicaid dollars.  

While it operates in 20 states, the company is racking up profit losses here — sometimes $25,000 a month — due to the state’s inadequate Medicaid reimbursement rate, according to company CEO Matt Walker.

“There is no path forward for breaking even,” he said, adding that profit losses have been driven by paying people a competitive salary despite the poor reimbursement rate. “It’s a shame. It hurts me as a West Virginian and a business owner in a West Virginia company to let people go.”

He continued, “We sounded the alarm that the investment needed to be made, and it’s still not been made — what does it take for them to hear us?”

West Virginia uses state and federal money from Medicaid to reimburse private companies that employ direct care workers, including those who help elderly individuals and people with disabilities remain in their homes or home-like settings. The workforce shortage is one of the reasons individuals with disabilities have been unnecessarily confined to West Virginia’s troubled psychiatric hospitals.

Part of the Medicaid reimbursement money is used to fund worker salaries. In West Virginia, care workers earn around $11 an hour.

West Virginia’s reimbursement rate is well below other states. 

During the legislative session, Walker and other home health care companies pleaded with state health department leaders and lawmakers to address the reimbursement rate, saying that they’d have to shut down offices without a rate increase. It was expected to be addressed, but by the end of session, it went unfunded.

“I can’t believe that the decision makers — from the governor, the Legislature to the Department of Health staff who set the budget — would allow that kind of financial risk to exist,” Walker said. “There are people right now who are sitting at home that need our help, and we can’t get to them because we can’t hire enough people to get to them.” 

Lawmakers are expected to gather in May for a special session over lingering budget issues. Some Republicans are asking that money be allocated to improve the Medicaid reimbursement rate to ensure the state has enough in-home health and direct care workers.  

“That’s [the government’s] charge, I think, is to take care of these vulnerable populations who can’t take care of themselves and have no one else,” said Del. Amy Summers, R-Taylor, who chairs the House Committee on Health. 

“If they’re not provided care in a home, then they’re going to be provided care in a nursing home. If we’re talking about spending money on a state budget. it’s going to cost us more. It’s a budgetary issue, but it’s also a compassion issue, I think,” she added.

A document shared by lawmakers showed that it could cost $309 million in additional annual spending if patients served by Medicaid had to be sent to facilities due to a lack of in-home care options. 

A spokesperson for the Department of Health Facilities said in an email that the department has no role in the determination of reimbursement rates for direct care workers.

The state increased the reimbursement rate during the COVID-19 pandemic but that money tapered off.

A 2023 survey by the health department — paid for by state dollars — said West Virginia needed to increase its rate of reimbursement and the worker salary range to $15.50-$18.60 per hour.

The report projected a $106 million increase in cost, which would mostly be paid for by the federal government.

Despite the survey results, Department of Human Services officials didn’t ask the governor for pay raises for the direct care workforce.

“The main problem, in my opinion, is that over the past decade, I feel like the state has not invested in several different ways in home- and community-based services,” Walker said. 

Summers and Del. Evan Worrell, R-Cabell, attempted during the legislative session to find millions of dollars to fund the raises. 

Worrell has grappled with the reimbursement rate in his day job as senior director of Operations for Panhandle Support Services, a company that employs home health workers across the state.

“I do not know why it wasn’t addressed in the regular session. The House added in the increased reimbursement rates, and the Senate removed them on the last day of session,” Worrell said. “Furthermore, [State Bureau of Medical Services Commissioner Cindy] Beane told me in an email that Department of Health and Human Resources would be requesting rate increases in their budget and they didn’t.”

He added, “For [the state health department] to take us back to pre-pandemic rates and then not advocate for a rate increase after having a rate study done is incomprehensible.”

Additionally, on the last night of session in March, the Senate decreased the funding for state services for individuals with intellectual and developmental disabilities (IDD) — money that could have been used to address reimbursement rates. 

Medicaid likely to be discussed in the special session

Summers said that since the session wrapped, she learned that the state health department did have internal funds to provide the raises to workers.

She plans to ask state health leaders “very specific questions” about their budget and reimbursement rates on Monday, during a meeting of the Joint Standing Committee on Health. 

Budget details are still coming to light as the state health department officially split into three new departments at the start of the year, Summers said. Lawmakers mandated the split, in part, to gain transparency in spending within the agency’s $7.5 billion budget.

“It appears preliminary that [the executive branch] has the ability to give the raises,” Summers said. “I think what session showed is that in the budgetary process of three new departments … there was just a lot of information we needed to learn and understand about how they’re appropriating money.”

West Virginia Department of Human Services Secretary Dr. Cynthia Persily is expected to present information to lawmakers about Medicaid. Along with the reimbursement rate issue, the state is facing a $147 million Medicaid funding shortfall for fiscal year 2025. 

Summers said that, depending on how the discussion goes, the reimbursement rate issue could be added to the governor’s May special session agenda.

If not, she noted that, under the state constitution, lawmakers can request a special session with three-fifths of the members calling for it in both the House and Senate. 

Walker said that he would be open to a legislative mandate that private companies receiving money through Medicaid reimbursements must use the funds only on worker salary increases. 

Editor’s note: This story was updated to clarify that the Department of Human Services didn’t ask the governor for pay raises for the direct care workforce.