Florida's $15 Medicaid wage floor: who counts?

In 2022, Florida put new Medicaid money into provider rates and required providers, in return, to pay a wage floor of $15 an hour. The budget never said exactly which workers the floor covered. That gap led to legal fights that ran from fall 2022 into summer 2023.

Those fights are over, but they show what can happen when a wage promise comes through a budget line instead of a statute. They matter again now for another reason: Florida's statewide minimum wage, $14 an hour today, rises to $15 on Sept. 30, 2026. That catches it up with the Medicaid floor set four years earlier.

What the budget required

Gov. Ron DeSantis signed the 2022-23 state budget on June 2, 2022. The Agency for Health Care Administration, which runs Florida Medicaid, says the budget gave it more than $600 million for the sole purpose of raising pay for Medicaid providers' employees to at least $15 an hour.

The money came with conditions. Providers had to sign a supplemental wage agreement with the agency, attesting under penalty of perjury that their employees would be paid at least $15 an hour as of Oct. 1, 2022. Starting Jan. 1, 2023, an employee who was not paid that much could sue the provider for back wages, an equal amount in liquidated damages, and attorney's fees, and those suits could be brought as class actions. Managed care plans had to attest by Jan. 1, 2023, that they had raised provider contract rates to match.

The agency calls the money a targeted increase that did not pay for staff already earning $15. The agency's actuary, Milliman, estimated the cost for each type of provider, and the agency mapped those estimates onto its fee schedules. Fee-for-service intermediate care facilities for people with intellectual disabilities received $34,991,119 of the total.

When the agreements took effect on Oct. 1, 2022, Florida's regular minimum wage had just risen to $11 an hour. The Medicaid floor sat $4 above it.

The challenges

Three provider associations led both challenges: the Florida Assisted Living Association, the Florida Ambulance Association, and the Home Care Association of Florida.

The first was a lawsuit filed Sept. 27, 2022, in Leon County circuit court, joined by Heather Haven III, an assisted living facility in Largo. It targeted not the $15 wage but the budget language letting employees sue. The groups argued that under the Florida Constitution, a new right to sue has to be created by regular law, not by the annual budget. They also argued that the appropriation might not cover the raises, and that class-action exposure could push providers out of Medicaid.

The second round came the week of Oct. 31, 2022, at the state Division of Administrative Hearings. The three associations filed nearly identical petitions. They argued that the agency had in effect defined "direct care" workers, and made providers attest to that definition, without going through formal rulemaking. They asked that the agency be ordered to stop relying on what they called invalid, unadopted rules.

Who the state treated as direct care

The budget used the phrase "direct care employee" but did not define it. The agency's guidance filled the gap. As summarized in a Sept. 15, 2022, client alert from the law firm Akerman, a direct care employee was someone with "direct contact with a Medicaid recipient for purposes of providing a Medicaid reimbursable service." Workers whose duties were mainly administrative, or who mainly maintained the physical workplace, were left out. Independent contractors paid on 1099s were included if they met the definition. Nursing homes were the exception: they had to pay $15 to all employees.

Florida Politics reported that the agency first published its definition, along with a list of example positions, in an online FAQ. The Home Care Association wrote to the agency in late September 2022 calling the FAQ an unadopted rule. The agency later took the page down, but the groups argued its position had not changed.

What happened next

The state won every ruling that was reported.

On Feb. 6, 2023, Administrative Law Judge Robert S. Cohen ruled for the agency in the assisted living and ambulance cases. In a 26-page decision, he found that the agency's reading of "direct care" workers was not a rule, so formal rulemaking was not required. He declined to write a definition. But he said that in the provider sectors before him, employees who "put their hands on a Medicaid beneficiary" fell within the plain meaning of the term. We could not find a reported outcome for the Home Care Association's administrative case.

In the circuit case, Judge Angela Dempsey had scheduled a Nov. 30, 2022, hearing on the groups' request for a temporary injunction. In December 2022 she denied it, so the right to sue took effect as planned.

The next budget ended the case. In early July 2023, the plaintiffs and the agency jointly asked the court to dismiss it. They said the 2023-24 budget, effective July 1, 2023, did not include the disputed provision, and that employees would have no cause of action for alleged underpayment after June 30, 2023. The motion also indicated that the provision had not led to any lawsuits. No court ruled on whether the budget language was constitutional.

Why direct support agencies should read this

Florida's model had four parts: money in rates, a wage floor, a signed attestation, and private enforcement. Each raises questions that apply wherever a state ties pay to rates.

The definition sets the cost. A provider that counts only aides and direct support professionals has a different wage bill from one that also counts drivers, supervisors who cover shifts, or contractors. Under Florida's approach, the provider carried the risk of guessing wrong, under oath.

Targeted money has edges. Florida's appropriation did not pay for staff already at or above $15. Any raise needed to keep experienced workers ahead of new hires came out of the provider's own budget.

A floor written into a budget lasts only as long as that budget. Florida's enforcement language lasted one fiscal year.

A fixed floor can be overtaken. On Sept. 30, 2026, Florida's general minimum wage reaches $15, and after that it is set to rise each year with inflation. The Medicaid floor from 2022 was a premium. It is about to become the general minimum.

The same tension shows up in other states. Louisiana is raising its DSP wage floor from $9 to $9.27 even though its own rate study modeled $11.48. Washington has proposed a wage freeze in its home care rate talks.

What is still worth checking

• Whether Florida's current Medicaid fee schedules, managed care contracts, or provider agreements still carry any $15 wage condition or attestation. We did not confirm this.
• How Florida adjusts rates for intellectual disability and home care services once the statewide minimum reaches $15, and whether rates built on 2022 assumptions account for it.
• How the Home Care Association's administrative petition ended, and whether anyone appealed Judge Cohen's order. Neither was reported in the coverage we found.
• For any state wage floor: whether it comes with a written definition of covered workers, funding for staff already above the floor, an end date or renewal rule, and an inflation adjustment.