Update on Direct Care Worker Wage Increase 


As reported in previous MARO Updates, the Michigan Legislature appropriated $45 million in Medicaid funding for a $0.50 per hour direct care worker wage increase effective October 1, 2017.  This appropriation is in support of the Governor’s original recommendation for the Michigan Department of Health and Human Services (MDHHS) budget for the fiscal year 2018 – included in MARO’s legislative talking points for our Day at the Capitol, and for which the association and other statewide organizations have strongly advocated.

In response to several inquiries from MARO members, below is the latest news on the direct care worker wage increase:

·   The PIHPs recently received their Behavioral Health Capitation Rates from MDHHS effective October 1, 2017 through September 30, 2018.  Based upon an actuarial analysis provided to MDHHS, it has been determined that the amount of Medicaid funding needed for the $0.50 per hour direct care worker wage increase is approximately $63.9 million rather than the original estimate of $45 million.  MDHHS is including approximately $63.9 million in Medicaid funding in the PIHP rates in order to provide the $0.50 per hour staff wage increase.

·   The PIHPs/CMHSPs are in the process of notifying their Provider Networks regarding implementation of the $0.50 per hour staff wage increase.  It is effective October 1, 2017.

·   Click to view the list of services to which the staff wage increase applies.

·   It is the prevailing understanding that the cost for FICA and other employer payroll costs related to the staff wage increase are not included in the Medicaid funding of approximately $63.9 million referenced above.  However, service providers will be expected to pass on the full $0.50 per hour wage increase to their employees.  Providers can advocate with the PIHPs/CMHSPs to support additional funding to cover the employer’s payroll costs; unfortunately, the higher than anticipated Medicaid funding cost for the staff wage increase adversely impacted this issue.

·   For Providers in Wayne County, the Detroit-Wayne Mental Health Authority (DWMHA)’s position is that it has already provided the $0.50 per hour direct care worker wage increase as a result of the wage increases funded in 2016.  DWMHA and MDHHS have been in recent communication on this issue, and as additional information is available it will be passed along to MARO members.

Details from the local PIHPs/CMHSPs regarding the implementation of the $0.50 per hour staff wage increase should arrive soon.  If not, please contact them directly; and in the interim, if you have questions or concerns, please do not hesitate to contact me.

Todd Culver, CEO
MARO – Promoting Community Access and Inclusion