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Industry experts worry about Arizona homecare reimbursement, which could lead to higher costs

'We're going to have higher costs hit the entire system'
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Making sure people can live where they want and how they want at critical moments... that's what makes caregivers important to families everywhere.

There's a growing shortage of workers and concerns about keeping them in the industry without losing them to other, higher-paying jobs. The industry as a whole is fighting for better reimbursement rates.

"I love this job because it inspires me every day to be a better version of myself," explained Sara Wilson, President and CEO of Home Assist Health in Phoenix.

The nonprofit organization provides direct care workers who perform a variety of mostly non-medical duties, such as bathing, shopping, cooking, and driving.

Hear from some of the students who are learning hands-on skills from the pros to fill the need for homecare workers in the video player below:

Valley nonprofit works to fill the need for homecare workers

"Homecare is where we help people with activities of daily living. So when you think about everything you do from the minute you wake up until the minute you go to sleep, all those activities that are required to live an independent and healthy and safe life," said Wilson.

By 2050, the number of people 65 and older will nearly double in this country, going from 48 million to 88 million, according to a recent study from PHI, an advocacy group for elder and disability care.

Those numbers mean more care workers will be needed at all levels. The Bureau of Labor Statistics says the field will grow by 22% over the next decade, which is much higher than the national average.

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At a time when these workers are needed more than ever, Wilson says the field needs some TLC — tender, loving care — of its own.

"Currently, most people receive care through Medicaid or state funding and it's not affordable to pay out of your own pocket, and at this time, the state is not funding it at its full potential because of inflation and the rise in minimum wage," Wilson said.

She says the state is using an outdated model when it comes to reimbursing homecare providers, coming at a major cost to them.

It's something a recent report by Mercer also backs up. Last Fall, the government consulting group said that in Arizona, "the fee schedule rates have not been re-established in many years and existing rates are not keeping pace with the current provider's cost of special delivery."

Wilson says that's not the only issue - there are also problems when it comes to compensation for workers industrywide; the fear is that they'll choose other occupations that may pay more.

"We are competing against those who can access higher dollars...while someone may want to choose homecare, they can't afford to choose it," she said.

The Mercer study also found the median wage for an Arizona direct care worker in 2023 was $15.50 an hour.

It also stated that out of the 19 groups that took part in the survey, 16 had to raise wages for their workers to meet Arizona minimum wage levels, which was $13.85 an hour last year.

Wilson says it could have big consequences if the funding model isn't updated.

"We're going to have higher costs hit the entire system," she explained.

She worries more companies will close or consolidate, decreasing competition and potentially increasing prices. If companies don't close, Wilson worries they may be forced to offer fewer services, which could impact someone's quality of care.

ABC15 reached out to AHCCCS for a statement on the Mercer study that was referenced in our story. We have not gotten a statement yet but will continue to push for answers.

An AHCCCS spokesperson did say that providers can negotiate rates directly with MCOs, which are healthcare companies and health plans.

But Home Assist Health says the problem is that there is a trickle-down effect if the MCOs are not getting reimbursed what they think they should be, in turn, groups like Home Assist Health may get reimbursed as much either.

In terms of finding open positions and more workers, AHCCCS told us about something called "PipelineAZ" which serves as a portal to connect Arizonans to jobs in the field. For more information on that, click here.