By Camilo Vargas
Special to DNAinfo.com New York
EAST HARLEM — Home health-care provider Union Settlement Home Care Services will shut down in December and will likely lay off 367 home health aides, the result of state-mandated wage increases and changes in Medicaid coverage, according to settlement officials.
The organization's administrators say they will help the company's 280 low-income patients — mostly seniors and young disabled patients in public housing — sign up with larger providers in the Bronx and Queens.
Settlement officials blame the shutdown on last year's state-mandated home-aide wage increase that raised the hourly wage of home-care workers from $8 to $9.
This increased the company’s annual operating cost by $500,000, according to David Nocenti, the executive director of Union Settlement Association, the home care agency's parent organization. He said the increase dealt a deadly blow to the already troubled company.
The transition to other agencies may also be difficult for some of the aides.
Frances Sadler, chief of operations at Union Settlement Home Care Services, says that around 70 percent of their employees have been working at the company since before 2005. That's when the state began requiring newly hired employees to be fingerprinted with the National Home Care Registry.
As a result, the vast majority of Union Settlement home-health employees have to hustle to get fingerprinted to be eligible to be hired elsewhere.
“That is what’s slowing the process down,” Sadler said.
"It's a huge loss for the community,” said Cynthia Harrison, a case coordinator at the agency, adding that it is also a stress on the patients. “They have to go to new agencies and get used to new people."
Before the company shuts down, Harrison and her colleague Diana Caldenales, a case worker who has been at Union Settlement for 26 years, will try to place the agency's more than 300 home health aides in new positions at some of the same agencies they hope will take their patients.
Some of the long-term employees may also wind up losing health insurance coverage, because not all employers offer it.
Harrison, the case coordinator, said the company is trying to transfer its employees to larger home care operations like the Queens-based Sunnyside Home Care, which serves 1,500 clients, or the Bronx-based Cooperative Home Care associates, which has 1,600.
These larger companies will be better equipped to survive the rapid changes occurring in New York State’s home care industry, according to Steven Dawson, an industry expert at the Paraprofessional Health Institute.
This shutdown echoes an industry-wide trend in New York State. The closure of small home-care providers and the transfer of patients to larger ones, experts say, is the result of Gov. Andrew Cuomo's statewide overhaul of Medicaid last year, which was designed to drive down Medicaid costs in a rapidly aging state.
After the overhaul, home-care providers like Union Settlement Home Care have to compete to contract with the Medicaid-funded long-term care agencies, who are now in charge of providing and coordinating all health services for low-income patients.
These agencies, in turn, pay a fixed amount in reimbursements to the home-care providers on a per-patient basis. The more patients the provider has, the more efficiently they can cover administrative and operating costs.
That's not so for providers with fewer than 400 patients, such as Union Settlement Home Care Services.
“The smaller the agency, the harder it is,” said Dawson. “You have to be pretty big to compete.”
The overhaul has created tensions between the home-care industry and state officials.
“The Home Care Association is very concerned about the impact of these changes on access to care and the employment of direct-care staff,” said a spokesman for the Home Care Association of New York State, an industry group. “We have been seeking both relief from and mitigation of these actions at the state level."
Home care union officials, on the other hand, expressed satisfaction with the measures.
"The home care wage-parity law is a long-needed measure, which increases quality care for New York's seniors and people with disabilities and lifts home-care workers out of poverty,” said a spokeswoman for the 1199 SEIU health workers union.
“In this circumstance, cases have been transferred to several other agencies represented by 1199 SEIU, and workers are staying with their clients."
The state-mandated home aide hourly wage is set to increase to $10 by 2014.