Home Health & Hospice Week

Aides will see hours cut.

Get ready to add a new layer of bureaucracy to your aide scheduling in January 2015. That’s when the Department of Labor is eliminating the companionship exemption to minimum wage and overtime laws for home care aides employed by a third party — including home health agencies.

The change, which was proposed almost two years ago, "fulfill[s] a promise by President Obama to ensure that direct care workers receive a fair day’s pay for a fair day’s work," the DOL says in a release about the final rule that contains the change.

Receiving a "fair" wage "will further stabilize and professionalize" a critical line of work that is suffering from a shortage of workers, Secretary of Labor Tom Perez says, according to newspaper reports.

Irony: But opponents of the change to the Fair Labor and Standards Act (FLSA) exception doubt that the rule will make much difference in most aides’ pay. Instead, due to reimbursement constraints, most agencies will be forced to limit aides’ hours to under 40. That will most likely lead to aides being employed by multiple agencies to make up for the shortfall, observers expect.

"While ostensibly intended to help hard working caregivers, it will have the very opposite effect," Andrea Devoti, Chairman of the National Association for Home Care & Hospice, says in a release. "Also, according to the advocates for persons with disabilities, it will trigger great harm to many of this nation’s most vulnerable citizens," says Devoti.

The change "will mean that people will receive less care. Home care companies will have little choice but to employ workers part time rather than full time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs," NAHC notes. "Caregivers will in the end receive less pay."

The restriction will impact Medicare- and Medicaid-reimbursed agencies most heavily, ex-pects attorney Robert Markette Jr. with Hall Ren-der in Indianapolis. That’s because private duty agencies can pass overtime costs onto their clients while government reimbursement remains the same.

The end result: This regulatory change will mean more scheduling and hour-tracking headaches for home health agencies, less employment stability for aides, and a greater number of aides assigned to patients.

"Families will have a much more difficult time affording the costs of ‘live in’ care for their disabled loved ones," NAHC predicts. "Federal programs such as Medicaid will end up paying a great deal more with no material improvement in access to care or in its quality."

Restriction Will Impact Care Quality

"The regulators have not fully examined the consequences of enacting this," said Michael Juceam, who owns a Right at Home franchise in Sarasota, Fla. "This is really a move by labor unions," Juceam told the Wall Street Journal. Care quality will suffer as Right at Home has to hire more aides to cover the same amount of hours, Juceam believes.

On the other hand, providers already abiding by the FLSA minimum wage and overtime rules are happy that their competitors also must do so, the newspaper adds. "It levels the playing field," says Ben Bledsoe, CEO of Consumer Direct Manage-ment Solutions in Missoula, Mont.

Providers in the 15 states that already have state minimum wage and overtime rules to direct care workers won’t see a difference, experts note. And while an additional six states and the District of Columbia mandate state minimum wage protections, the vast majority of home care agencies pay their aides more than minimum wage anyway.

Lawmakers Split On Revision

Politicians are divided over the change, largely along party lines, the Journal notes.

For example: Sen. Tom Harkin (D-Iowa) called the rule "a long overdue step to provide basic fairness for those who support and care for some of our most vulnerable citizens," and said it can help reduce turnover and increase the size and quality of the home-care workforce. But Rep. John Kline (R-Minn.) said the rule "will raise costs and limit access to in-home care for vulnerable Americans," the newspaper reports.

Watch out: In addition to the scheduling and possible staff pay burdens, HHAs have to beware of lawsuits on the matter coming from disgruntled staff, legal experts warn. Be sure you’re in full compliance when the start date hits in 2015.

Note: For many DOL resources on the change, ranging from the final rule to FAQs, go to www.dol.gov/whd/homecare/finalrule.htm. More analysis on the rule’s impact is in Eli’s HCW, Vol. XXI, No. 1.