Home Health & Hospice Week

Longstanding legal challenge ends--but stay tuned for related developments.

The U.S. Supreme Court has issued the final word in a landmark labor law case, giving many home health agencies the green light to exempt aides from expensive federal overtime pay requirements.

"Home care won," says attorney John Gilliland II of Gilliland Markette Milligan in Indianapolis. "We're not surprised, but we are impressed that it was a unanimous decision," he adds.

The case, Long Island Care At Home Ltd. v. Coke, examined whether HHAs can apply the "companionship exemption" to the Fair Labor Standards Act (FLSA). Among other matters, the act governs minimum wage and overtime pay requirements.

Big news: In the June 11 decision, the Supreme Court reversed a 2004 decision by the U.S. Second Circuit Court of Appeals. That decision held that the companionship exemption did not apply to home health aides employed by third parties, including agencies--applying instead only to aides hired directly by the patient or the patient's family.

Long story, short: Ever since, that ruling has been challenged and reviewed. On Jan. 23, 2006, the Supreme Court accepted an appeal of the Second Circuit's decision in the case, quickly vacating it, and remanding the case to the Second Circuit for reconsideration. Last summer, the Second Circuit upheld its earlier decision.

Balancing Pay and Reimbursement

HHAs argued during the case that changing the rule would burden agencies with prohibitive labor costs, driving some agencies out of business and leaving some beneficiaries without access to home care.

New York City, for example, issued a friend-of-the-court brief, joined by the New York State Association of Counties. The brief warned that a victory for Evelyn Coke could force the city, state and federal governments to pay $250 million more annually in Medicaid funding to New York City's approximately 60,000 home health aides.

This month's Supreme Court decision lays to rest further legal challenges to agencies' use of the companionship exemption as defined by the rule that the Coke case challenged, says Elizabeth Zink-Pearson, attorney with Pearson & Bernard in Covington, KY.

The verdict should also prompt the industry to strive for new solutions to the problem of low pay and a lack of benefits for home health aides, according to the National Association for Home Care & Hospice.

NAHC and others representing agencies should reach out to labor organizations and other advocacy groups for workers, says William Dombi, vice president for law with NAHC's Center for Health Care Law. 

"We would like to see management working with labor organizations, rather than management versus labor," he says. Working together, the two contingents could improve reimbursement and funding available through state Medicaid programs and state programs funded by the Older Americans Act, as well as Medicare, says Dombi.

Though cooperation may be the ideal, HHAs could continue to find themselves at odds with strategies employed by labor unions to address concerns about home health aides' pay. Worker advocates responding to the Supreme Court decision pledged to lobby Congress to extend the federal minimum wage and overtime protections.

Sen. Edward Kennedy (D-MA) will seek to amend the FLSA to ensure that aides are protected, according to the New York Times.