New Data Shows Fee Cap System Cuts Rates Below Cost of Labor for Nurses and In-Home Aides

New Data Shows Fee Cap System Cuts Rates Below Cost of Labor for Nurses and In-Home Aides

Thirty-four chargemasters from health care companies demonstrate how lawmakers are ignoring basic math and fundamental business operations

BRIGHTON, Mich.—(April 13, 2022)—New data from the Michigan Brain Injury Provider Council (MBIPC) shows that the draconian government-imposed fee cap system included in auto insurance reform has cut reimbursement rates below the cost of labor for nurses and in-home aides.

Chargemasters provided to MBIPC from 34 home health care companies demonstrate how lawmakers are ignoring basic math and fundamental business operations as they defend the fee cap system as sustainable with a continued “wait and see” approach, MBIPC President Tom Judd said.

“From the first day Public Act 21 of 2019 became law, MBIPC has emphasized that not only will it lead to the current crisis in care, but that it unfairly punishes ethical, cost-efficient healthcare companies that worked to meet their mission to provide quality expert services catastrophically injured car crash patients need and deserve,” Judd said. “The now-implemented system in which services without a payable Medicare code see their reimbursements cut by 45% is not a fee schedule—it is an arbitrary cap system that unjustly punishes the good guys that were charging reasonable rates.”

Based on the chargemasters from 2019 of 34 home healthcare companies, the 45% reduction in reimbursement for hourly registered nursing is on average now $41.01. The wages alone for this position in 2022 averages $40-50/hour. Similarly, the hourly wages for in-home aides ($18-19/hour) are more than the average reimbursement rate for this job ($17.79) under the government-mandated fee cap system.

“To repeat, and to be clear – the competitive wages for in-home care are more than the mandated reimbursement level for these services under the new no-fault fee cap system,” Judd said. “This of course does not even include other important factors for recruitment and retention of skilled, qualified, and committed workforce such as health insurance, dental and vision coverage, paid time off, holiday pay, overtime, retirement, and other basics of competitive benefit packages that any business trying to compete would need to offer.”

To date, legislative leadership has ignored the statistics provided through non-partisan, neutral parties such as ROI Institute, MPHI, and the University of Michigan Poverty Solutions. They have ignored hundreds of news stories chronicling the disruption of services and displacement of care across the state. They have given form letter responses to survivors and families pleading for help. They have even gone so far as to ignore families that have lost loved ones due to the disruption in their care.

“With every passing day, the good companies around this state – many of them small businesses derived from the mission to serve – are being forced to turn away patients and discharge those they currently serve, many of whom they have served for several years,” Judd said. “It is a tragedy on so many levels, and it is completely avoidable. Enough is enough! The data is in! The math doesn’t add up! And worst off all, lives are being destroyed. The crash survivors, their families, and the professionals that take care of them want to know from their representatives, senators, and Governor Whitmer – do you believe it is time to move on?”