Across the U.S., direct care workers (DCWs) are responsible for most of the hands-on care for older adults and people with disabilities. They provide essential day-to-day care for people who may not have family or informal caregivers. DCWs may be employed in home-based settings, adult day centers, and long-term care facilities, among others, and perform tasks such as bathing, dressing, housekeeping, meal preparation, medication management, and more intensive medical care and assistance.

For years, states have been grappling with how to meaningfully support DCWs — many of whom are women, people of color, and living at or near the poverty level. The COVID-19 pandemic heightened the urgency to attract new workers to the field and strengthen the direct care workforce, especially as more older adults and people with disabilities seek to avoid institutions to receive home- and community-based services (HCBS). As the need and demand for HCBS continues to rise, there will be a dire need for more and more DCWs to fill the critical role.

The challenges DCWs face are significant. Low wages, long hours, few benefits, and the demanding nature of the work has led to a high rate of DCW turnover and a nationwide worker shortage, with many moving to jobs with fewer hours and higher pay in industries such as hospitals, retail, and fast food.

Drawing from a recent Center for Health Care Strategies (CHCS) report focused on the state of Michigan and supported by the Michigan Health Endowment Fund, this blog post explores key recommendations for states to strengthen and sustain the direct care workforce, with a specific emphasis on state Medicaid agencies.

Key Recommendations

1. Focus and organize state-level and advocacy efforts related to the direct care workforce   

The commitment of state leaders to a common goal is critical for making meaningful progress in strengthening the direct care workforce. Ideally, state leaders from the Governor’s office, legislature, Departments of Labor, Health and Human Services, Medicaid, Aging, and Behavioral Health, would be aligned around a shared DCW goal. Importantly, the perspectives of DCWs and care recipients should also play a central role in setting state goals.  

States can use several mechanisms to foster aligned stakeholder goal setting and action. For example, a state-level task force, response team, or coalition could help inform state strategies and bring the perspectives of various agencies and DCWs and care recipients. This group could come together to determine strategic priorities and establish a cohesive strategy for state and federal funds that could be used to support the direct care workforce. New Jersey’s Special Task Force on Direct Care Workforce Retention and Recruitment, and Michigan’s DCW Advisory Committee offer helpful models.   

2. Use federal funding and flexibilities

The federal Build Back Better Act would potentially include $1.48 billion for direct care workforce grants, and $130 million for HCBS Improvement Planning Grants (which includes a look at DCW pay). The future of the bill, however, is uncertain. Nonetheless, there are other ways states can access federal funding and flexibilities to support the direct care workforce.

For starters, the Centers for Medicare & Medicaid Services (CMS) has suggested how Medicaid agencies can structure Medicaid rates to more accurately reflect the day-to-day work of DCWs. For example, home care workers and personal care assistants may need to drive long distances between clients’ homes and may struggle to access benefits and training opportunities. In past guidance, CMS has noted that compensating travel time may be a reasonable cost of delivering a unit of Medicaid service, when developing rates. In addition, a recent CMS proposed rule would streamline state efforts to provide DCWs with benefits and training ― allowing states to directly pay third parties to provide benefits and training.

On a larger scale, through the American Rescue Plan Act of 2021 (ARPA) and related CMS guidance, states have an unprecedented opportunity to invest in HCBS and DCWs. From April 1, 2021 to March 31, 2024, states can use enhanced federal funding to: create financial incentives to recruit and retain DCWs; support training; increase rates to increase DCW compensation; offer leave benefits; and provide specialized payments, including hazard, overtime, and shift differential pay. States have already submitted initial spending plans but can modify their plan quarterly. For specific state examples, see CHCS’ state scan and an analysis from ADvancing States.

3. Prioritize DCW-related goals in Medicaid managed care contracts

Most states use managed care contracts for Medicaid services. Medicaid managed care entities may manage all physical health, behavioral health, and long-term services and supports for Medicaid members; specialize in behavioral health services for certain populations with serious mental illness; or coordinate services in certain HCBS waiver programs. No matter the context, they are likely to be responsible for reimbursing for, and coordinating, services provided by DCWs.

States can use their managed care contracts to expand and strengthen the direct care workforce. This managed care focus is important for three reasons. First, managed care plans can be held accountable for achieving measurable goals for growing the direct care workforce and improving the quality of services. Plans can test recruitment, retention, and training strategies, report on successes and failures. Second, as states develop statewide workforce development initiatives, training hubs, and registries, coordination across plans will be needed. Third, states increasingly seek to advance health equity and reduce racial and ethnic disparities. One way to start is to use managed care contracts to improve wages and benefits access for DCWs, who are disproportionately women of color and often Medicaid members themselves.

4. Recognize the deep value and importance of the profession

Across the nation, domestic work in the home is not consistently valued or thought of as essential, so the work DCWs perform is at a significant disadvantage right from the start. If states could help move the pendulum regarding how this profession is viewed, it would go a long way toward making lasting changes.

States can aim to promote the value and importance of the profession. This could be done at career fairs, high school, and college job fairs, and in mass mailings and communications, among other opportunities. In doing so, it is critical to partner closely with DCWs and care recipients to craft and test messages for how to talk about the profession. DCWs and individuals who receive care from DCWs will be the best source of ideas on how to frame the messaging around the work, its importance, and value. In addition, states can seek out DCW trainers who are committed to advancing the direct care workforce themselves, since trainers play a central role in conveying the value and dignity of the profession.

Finding a Path Forward

States recognize the urgency in strengthening the direct care workforce, especially as the desire for HCBS services continues to climb. While identifying effective strategies can be challenging, states can make meaningful progress if they secure leadership buy-in, leverage federal funds and flexibilities, prioritize DCW-related goals in Medicaid managed care contracts, and commit to bringing value and respect to the profession. With newly available ARPA funds, states are uniquely positioned to make significant investments and lasting changes in the direct care workforce.  Finally, placing an equity lens on every potential improvement for the direct care workforce is important for avoiding unintentional consequences (e.g., providing wage increases to some DCWs but not all, offering DCW trainings in only one language, etc.). Changes should only be implemented if they benefit all DCWs equally and meaningfully.

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