Application of the FLSA To Domestic Service – Companion Care Exemption
Friday, March 9th, 2012
Mary Ziegler, Director
Division of Regulations, Legislation and Interpretation
Wage and Hour Division
United States Department of Labor
Room S-3502
200 Constitution Avenue, N.W.
Washington, D.C. 20210
RE: Wage and Hour Division – (RIN) 1235-AA05
Comments on Proposed Rulemaking
Regarding Application of the FLSA to Domestic Service
Dear Ms. Ziegler:
I write to you today because my business, industry, employees, and most importantly, those we support are being put at risk by the notice of proposed rulemaking (NPRM) published by the Department of Labor’s Wage and Hour Division on December 27, 2011. This regulation would eliminate the companion care exemption for third party employers, and as a practical matter, makes it rarely usable by others due to the limits placed on personal care. It significantly changes Congressional intent and key components of the Fair Labor Standards Act which has been in place since 1974.
I oppose the NPRM because there is no demonstrable need for regulatory alteration, and the proposed changes will have a profound, adverse impact on fragile, aging seniors and people with disabilities. These changes would severely harm in-home care companies and their employees.
I believe these outcomes are likely consequences should this rule be enacted:
In-home non-medical care providers, like my company, will face increased costs as we would be required to pay overtime, especially to caregivers who work 24 hour or live-in jobs. This requirement, coupled with new burdensome reporting requirements, will encourage employers to limit caregivers’ hours to 40 hours a week, transition to a shift model for 24 hour or live-in care, thus drastically harming our clients’continuity of care.
As the costs of home care rise, 24 hour or live-in care will not be affordable. Those dependent on this service may be forced away from trained, insured, bonded, licensed in-home care providers, opting instead for unskilled workers in the underground “grey market.” Most of these workers will likely not comply with FLSA requirements, nor will they be able to navigate the complexity of the exemption. These independent employees often come without background checks and are uninsured; leaving families without recourse should a crisis arise.
If in-home care becomes economically unfeasible for families, a greater number of those in need of care could be more likely to utilize public programs, such as Medicaid, leaving taxpayers responsible for the cost of care.
Ultimately, small-business private duty home care employers, which are labor-intensive and low-margin operations, will be forced to modify their service model in ways that will not benefit those we serve in order to avoid incurring significant increase in costs.
As an in-home care provider, my employees and I see firsthand how hastily-made regulations and laws can leave seniors without the support they need and can create unneeded expenses families can ill afford.
In short, the NPRM will significantly increase in-home non-medical costs. The changes will ultimately lower pay for caregivers, harm continuity of care, threaten the economic viability of private duty companies, increase federal spending on government
programs, create a significant loss of federal and state revenue, and incentivize an underground “grey market,” populated by untrained, unsupervised, and unregulated caregivers for whom taxes are not paid.
For these reasons, I urge the DOL to withdraw this NPRM due to the harm it will cause to those who need in-home care, the caregivers who provide it, the companies that employ those caregivers, and the taxpayers who pay for government-subsidized long-term care.
Sincerely,
Neil Rotter, MSG, MSW
Vice-President
Time to Talk to Your Parents About the Future
Thursday, March 8th, 2012
What happens when we suddenly become the
caregivers… When it’s suddenly our turn? America’s growing generation of Baby
Boomers now faces a challenge they were never prepared for: Taking care of
ailing or aging loved ones. In this new documentary series produced by KCET,
host Holly Robinson Peete takes viewers on journeys into this often
heart-wrenching passage of life exploring the overwhelming challenges faced by
caregivers of every ilk. Four half-hour episodes focus on different families
who find themselves at an important stage along the caregiving path, offering
viewers solutions and hope through inspiring stories and a multitude of
resources. Robinson Peete, an acclaimed actress and award-winning author, also
shares her own experiences of caring for her father who had Parkinson’s
disease.
http://www.kcet.org/shows/yourturntocare/your-turn-to-care.html
Hearing to Review Consequences of Labor Department’s Companion Care Regulation
Thursday, March 8th, 2012
WASHINGTON, D.C. | March 5, 2012 -
On Wednesday, March 7 at 10:00 a.m., the Subcommittee on Workforce Protections, chaired by Rep. Tim Walberg (R-MI), will hold a hearing entitled “Ensuring Regulations Protect Access to Affordable and Quality Companion Care.” The hearing will take place in room 2175 of the Rayburn House Office Building.
In 1974, the Fair Labor Standards Act was amended to cover workers who perform domestic services. At the time, policymakers recognized the need for seniors and individuals with disabilities to maintain access to affordable care in their home. As a result, Congress created an exemption for workers providing in-home companion care. Yet, a regulatory proposal released last year by the Department of Labor would severely restrict a worker’s ability to qualify for this exemption, with potentially negative consequences for individuals who rely upon these services.
Under the department’s proposal, only workers who comply with a number of arbitrary standards would qualify for the exemption. The proposed regulation also eliminates the exemption for companion care workers employed by a third-party. According to the department’s own estimates, the cost of companion care may increase anywhere from $420 million to $2.26 billion over the first 10 years.
Wednesday’s hearing will provide members an opportunity to examine the potential consequences of this proposal, including fewer hours of work for employees; higher costs for taxpayers, seniors, and individuals with disabilities; and fewer opportunities to receive in-home care. To learn more about this hearing, visit www.edworkforce.house.gov/hearings.
Undercover 82-year old Grandma exposes Home Health Fraud in Texas
Thursday, March 1st, 2012
I guess Medicare wasn’t listening when Texas proudly proclaims, ‘Don’t Mess with Texas’. Here’s another tragic bad apple in the home care community.
In the wake of an ABC News undercover investigation, federal authorities in Texas are investigating how an active 82-year-old grandmother was diagnosed as homebound, with a range of ailments that she did not have, including Type 2 diabetes, opening the door to potentially tens of thousands of dollars in Medicare payments for home health care, supplies and equipment she did not need.
A hidden camera recorded the undercover grandmother’s visit to a doctor in McAllen, Texas, where she told the doctor and nurses she exercised regularly and, other than some hypertension and arthritis, was in excellent health.
“I’ve really enjoyed good health all my life, God’s been good to me,” the doctor was told by Doris Ace, the grandmother of ABC News producer Megan Chuchmach.
Yet the official certification sent to Medicare for home health care services indicate she was homebound and suffered from two internal infections, incontinence and needs “assistance in all activities, unable to safely leave home, severe sob,” an abbreviation for shortness of breath.
Mrs. Ace had specifically told the doctor and her nurses she did not suffer from incontinence or shortness of breath.
On a patient referral form for home health care service, signed by the doctor, our undercover grandmother was also wrongly diagnosed with type 2 diabetes, even though she was not given a blood test which doctors say is the only way to authoritatively diagnose diabetes.
“That’s fraud,” said Tim Menke, senior adviser for investigations in the Inspector General’s office at the Department of Health and Human Services.
“Our Medicare system is an honor system,” said Menke after viewing the files and the ABC News undercover tape of the doctor’s office visit. “And there’s not much honor left in the system when you see things like that.”
McAllen is considered a hotbed of Medicare fraud by the Inspector General’s office which has already brought cases against a number of doctors and health care agencies and has many others under investigation.
“The fraud indicators are off the charts,” said Menke of McAllen and surrounding towns in the Rio Grande Valley. “We have ten of the top physicians who have billed nearly $200 million in one specialty last year alone.”
Nationwide, the Inspector General’s office estimates that $60 billion dollars of taxpayer money is lost to unchecked Medicare fraud every year.
“We’ve seen it in Miami, Detroit and now in McAllen and it’s very, very common,” he said.
“They’re lying in order to steal from you and me and the taxpayers,” he added.
The McAllen doctor, Dr. Padmini Bhadriraju declined to comment to ABC News but denied any wrongdoing through her lawyer.
The lawyer, John Rivas, said the doctor acknowledged an “error” in the diabetes diagnosis for ABC News’ undercover grandmother on the patient referral form but said, “this section was filled out by someone other than Dr. Bhadriraju,” even though he confirmed the doctor did fill out the majority of the form and signed it in her handwriting.
Her signature served as certification that “my clinical findings support that this patient is homebound.”
The doctor’s lawyer said neither the doctor nor others in her office knew who filled in the incorrect diabetes diagnosis.
Rivas also said the doctor played no role in the official certification form sent to Medicare, although records show she billed Medicare for the review of the form and its plan of care.
Response to USA Today’s Article on ‘High Turnover Affects Home Health Care Quality’
Thursday, March 1st, 2012
Barry Berger, Accredited Home Health Services’ Founder & President, responds to USA Today’s Article on ‘High Turnover Affects Home Health Care Quality’. http://www.usatoday.com/news/washington/story/2012-02-15/home-health-care-turnover-quality/53109424/1
Dear Editor:
The author of “High
turnover affects home health care quality” does readers a grave disservice by
not differentiating between home health care workers who work for agencies and those
who are hired privately through online websites, such as CraigsList. In
California all workers are required to be paid the minimum wage of $8 per hour,
and working for an agency helps ensure that caregivers are paid a fair, living
wage while providing quality, affordable care to clients. Unfortunately,
however, there is an underground world of home health care, where families can
hire caregivers outside of an agency through online websites. When
caregivers are hired outside of an agency, there are no consumer protections
for the client, and none for the caregiver. It is in instances such as
this where caregivers too often find themselves working for less than minimum
wage. The irony is onerous regulations and legislation that are being proposed
could have the unintended consequence of driving up the price of in home care,
sending potential clients away from agencies and toward online services such as
CraigsList, where caregivers have no protections. And, under this
proposed regulation, workers who stay at agencies would not benefit
either. Their shifts would be reduced to 8 hours to avoid overtime (which
most clients cannot afford) and their pay would fall to $64 per day.
While the proposed regulation may sound on paper like a good idea, the truth is
it would harm those who rely on home health care and the caregivers who make it
their livelihood.
CAHSAH Board Chair’s Monthly Update
Thursday, March 1st, 2012
February Chair’s Message
Last week I proudly sat and watched over 300 CAHSAH members
and Caregivers assemble in Sacramento as we walked the halls of the capitol and
made our voices heard. To see an industry organize and represent itself in such a professional manner is
something all the participants should be proud of. We took our anger over bad legislation and
redirected it into energy that permeated the halls of the capitol. What better timing, as we were the only trade
association in the capitol that day.
The day started with Lucy Andrews, CAHSAH PAPA Chair opening
up the program. Peter Kellison then took the stage and addressed the audience on the status of the bills and effective
lobbying. Dean Chelios, CAHSAH’s new Director of Policy was then introduced to
the audience. I was very impressed with Dean’s understanding of our issues, and his presentation to the audience. This was literally Dean’s sixth day on the job, and he performed as if he was with CAHSAH for years.
Joe Hafkenshiel then gave out the legislative awards. A group of home care providers from San Diego
won the grassroots legislative award. Lucy Andrews, Trevor O’Neil, Brittnei Salerno, and I (to my surprise) won
the individual grassroots award.
I had the privilege of awarding the legislator or the year
award to Assembly Member Mariko Yamada. Assembly Member Yamada gave a gracious
speech and noted that CAHSAH has not given out this award for a few years, and
she was humbled to accept it. We then
heard from Assembly Member Ed Hernandez and Jerry Hill.
After networking and lunch we walked to the capitol and
began the activity we were there for.
Over 300 members including 30-40 caregivers walked the halls and visited
all elected officials. We educated them
on our concerns for AB889, SB411, Medi-Cal managed care, and the need for the
licensing of hospice beds. In many instances
our numbers overwhelmed the officials we were meeting, and many of the meetings
were standing room only.
We accomplished exactly what we wanted. Our strength in numbers allowed us to make
noise, educate our legislators, and do it in a way that exhibited the passion
and professionalism of CAHSAH.
I want to thank all the participants, and especially the
caregivers who made our Lobby Day the most successful in the history of
CAHSAH. I also want to thank Mary
Adorno, and Ranesh Maharaj along with the entire CAHSAH staff for the hard work
and effort that was put into this day.
Respectfully,
Barry R. Berger
Board Chair
Another Bad Apple ruins it for the Bunch
Thursday, March 1st, 2012
This week, the Center for Medicare Services uncovered a $375 Million Home Health Fraud Scheme in Texas. Unfortunately, the media loves to cover news like this and it gives the home care industry a BAD RAP. Yes, there is a small percentage of companies that are abusing the system. No, this is not the norm. And no, targeting providers and creating many new laws and regulations to increase the governance of home health operations is not the solution. By adding more red tape to an already strenous process for providing, and getting paid for home care services, the government continues to weaken the most cost-effective and preferred method of delivering care – home health.
Here’s the article on the Texas Fraud Case – http://www.nola.com/crime/index.ssf/2012/02/7_in_texas_accused_of_375_mill.html
Years after Jacques Roy started filing paperwork that would have made his practice the busiest Medicare provider in the U.S., authorities say they’ve found most of his work was a lie. They accused Roy on Tuesday of “selling his signature” to collect Medicare and Medicaid payments for work that was never done or wasn’t necessary. Others charged in the scheme are accused of fraudulently signing up patients or offering them cash, free groceries or food stamps to give their names and a number used to bill Medicare.
Roy, 41, a doctor who owned Medistat Group Associates in DeSoto, Texas, faces up to 100 years in prison if he’s convicted of several counts of health care fraud and conspiracy to commit health care fraud. Six others, including the owners of three home health service agencies, are also charged. More than 75 agencies linked to Roy have had their Medicare payments suspended.
Roy’s attorney, Patrick McLain, said he had yet to review much of the evidence but that Roy maintained his innocence.
A host of top officials from the Justice and Health and Human Services departments announced the investigation Tuesday in Dallas. They argued that the announcement was proof that changes in how Medicare data is analyzed had worked. The scheme was the largest dollar amount by a single doctor uncovered by a task force on Medicare fraud, authorities said.
The officials said years of alleged “off the charts” billing by Roy went unnoticed because they did not have the tools to catch it. Health and Human Services has since beefed up its data analysis and can track other cases, HHS Inspector General Dan Levinson said.
“We’re now able to use those data analytic tools in ways — in 2012 and 2011 — that no, we really could not have done in years past,” Levinson said.
The department also is working on a system of “predictive modeling” to flag suspicious billings for investigation before they are paid, HHS Deputy Secretary Bill Corr said.
But others still have questions about how a fraud so big could have gone unnoticed for so long.
Patrick Burns, spokesman for the advocacy group Taxpayers Against Fraud, credited HHS for hiring Peter Budetti, CMS’ deputy administrator for program integrity, to upgrade its systems. But Burns said the department still had no excuse for missing obvious problems.
“You can’t have 11,000 bills from a single doctor if you’re the number one home health provider in the nation,” Burns said. “You can’t see that many patients. It’s not physically possible.”
HHS investigators noticed irregularities with Roy’s practice about one year ago, officials said.
Roy had “recruiters” finding people to bill for home health services, said U.S. Attorney Sarah Saldana, the top federal prosecutor in Dallas. Some of those alleged patients, when approached by investigators, were found working on their cars and clearly not in need of home health care, she said.
Medicare patients qualify for home health care if they are confined to their homes and need care there, according to the indictment.
Saldana said Roy used the home health agencies as “his soldiers on the ground to go door to door to recruit Medicare beneficiaries.”
“He was selling his signature,” she said.
For example, authorities allege Charity Eleda, one of the home health agency owners charged in the scheme, visited a Dallas homeless shelter to recruit homeless beneficiaries staying at the facility, paying recruiters $50 for each person they found. When the shelter’s security guards allegedly kicked Eleda out several times, she began to see patients listed as homebound at a church several blocks away, the indictment alleges.
A message was left Tuesday at Eleda’s Dallas-based company, Charry Home Care Services Inc.
Others indicted are accused of offering free health care and services like food stamps to anyone who signed up and offered their Medicare number.
Roy would “make home visits to that beneficiary, provide unnecessary medical services and order unnecessary durable medical equipment for that beneficiary,” the indictment alleged. “Medistat would then bill Medicare for those visits and services.”
The indictment says Roy’s business manager — identified only by his initials — recorded conversations between the two in January 2006.
A spokesman for Trailblazer Health Enterprises, which paid home health claims through a contract with federal authorities, did not return a phone message Tuesday.
Health care fraud is estimated to cost the government at least $60 billion a year, mainly in losses to Medicare and Medicaid. Officials say the fraud involves everything from sophisticated marketing schemes by major pharmaceuticals encouraging doctors to prescribe drugs for unauthorized uses to selling motorized wheelchairs to people who don’t need them.
Nomaan Merchant, Associated Press
Associated Press writers Ricardo Alonso-Zaldivar in Washington, D.C. and Juan Lozano in Houston contributed to this report.
California Health Insurers to Raise Premiums 8 to 14%
Thursday, February 23rd, 2012
California’s largest health insurers are raising average rates by about 8% to 14% for hundreds of thousands of consumers with individual coverage, outpacing the costs of overall medical care.
The cost of goods and services associated with medical care grew just 3.6% over the last 12 months nationally, government figures show. But insurance premiums have kept climbing at a faster pace in California.
Insurers defended their rate hikes, saying they are based on their claims experience with the customers they insure and not just the broader rate of medical inflation. They also say that healthier members dropped out of the individual market as premiums rose and the economy worsened in recent years, leaving behind a group of policyholders who have higher average costs.
“We will continue to examine the fundamental issues at the heart of rising healthcare costs, including the prevention of chronic disease, increasing the quality of care and reducing unnecessary health expenses,” said Darrel Ng, spokesman for Anthem Blue Cross, the state’s largest for-profit health insurer.
Consumer advocates and others are skeptical, however, questioning whether insurers are doing enough to hold down costs. These latest increases follow years of 20% to 30% rate hikes for families that are at the center of a looming fight between the insurance industry and its critics over a proposed ballot measure seeking tougher rate regulation.
“Consumers should be outraged that premiums continue to grow faster than underlying costs,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “There’s help on the horizon for millions of Californians from health reform, but things may get worse before they get better.”
Anthem has proposed raising premiums 9.6% to 13.8% on average, effective May 1 or July 1, for about 700,000 individual policyholders and their family members. The rate increases are under review by state officials.
Nonprofit Kaiser Permanente increased premiums 9% on average for nearly 300,000 customers last month.
Blue Shield of California, also a nonprofit, is boosting average rates by 7.9% for 265,000 members and by 8.9% for 56,000 members, both effective March 1.
Insurers in California must submit proposed rate hikes for review to determine whether they meet certain state requirements, but state officials don’t have the authority to reject rate hikes for being unreasonable. But regulators have been challenging insurers’ arithmetic in calculating rates.
Officials at the Department of Managed Health Care persuaded Blue Shield to lower a proposed 14.8% increase to the 8.9% boost. The agency said it disagreed with Blue Shield’s projection for future medical expenses. The California Department of Insurance convinced Aetna, based in Hartford, Conn., to lower a 13.7% increase to 9.3% for 50,000 members last month.
“Many of the health insurance carriers have projected significant increases in medical costs and utilization, but those projections have not been borne out by experience,” said Janice Rocco, the insurance department’s deputy commissioner for health policy. “Therefore the rate is higher than it needs to be.”
Rocco said some consumers may receive rebates in August. That would occur based on an upcoming state review of 2011 claims to determine whether insurers met a new federal requirement for spending at least 80% of premiums on medical care for individual policies.
Tom Epstein, a spokesman for Blue Shield, said the company consented to the change in its rates sought by managed health care officials because “we want to keep medical care more affordable for our members.” In its filings to regulators, Blue Shield said “the cost of hospital services, physician services and prescription drug coverage for our individual members continues to rise.”
In recent years, the rising cost of medical care and rate hikes for health insurance have been a major political issue that prompted congressional approval of President Obama‘s healthcare overhaul, much of which takes effect in 2014, and calls in California for tougher state regulation of health premiums.
Anthem tried to raise rates by up to 39% in 2010, sparking national outrage and helping Obama win support for his healthcare overhaul. The Woodland Hills company, a unit of WellPoint Inc., was forced to back down and accepted maximum rate increases of 20%. Last year, Anthem raised premiums 9% to 16% on average for individual policyholders.
Starting in October 2010, Blue Shield raised premiums by 23% to 35% on average for about 325,000 policyholders, a result of two separate rate hikes that spanned two years. Blue Shield also began issuing credits to customers if its net income exceeded 2% of revenue. The company said it returned about $450 million to individual policyholders last year as a result, which reduced members’ rates by about 7%.
Kerry Abukhalaf, a 37-year-old who owns a small technology services firm with her husband in Alameda, has seen her family’s Blue Shield premiums more than double in the last three years to $544 per month. Her latest increase of 9% “is especially hard for ourselves and others we know due to the hard economy right now,” she said. “I feel like my family is being penalized for doing the responsible thing and having insurance.”
Last month, Blue Shield notified Tom and Dana Richardson, who run a pool-cleaning business in San Diego, that their premium would rise 15% to $1,905 per month. The Richardsons chose to nearly triple their deductible to $11,000 from $4,000 to cut their monthly premium to $1,090.
“It’s like a kick in the teeth,” said Tom Richardson, who’s 63. His wife turns 60 next month. Because of their age and medical history, he said, they can’t find a cheaper policy.
These increases would affect many of the 2.2 million Californians who buy individual policies, but not the majority of working Californians who are insured through employer group plans.
Businesses and employees covered by group health insurance are seeing premiums rise too. Nationwide, the annual premium for family coverage through an employer increased 9% last year, according to the Kaiser Family Foundation.
The proposed ballot measure would give the California insurance department the same authority to approve or reject health insurance rate increases that the department now has over property and auto policies. Consumer Watchdog, the Santa Monica group that championed California’s Proposition 103 in 1988 that enacted rate controls on auto insurance, is leading the drive to get 505,000 valid signatures by May 1 to qualify the ballot measure for the November election.
Consumer groups have failed to win approval for similar measures in the state Legislature the last five years, encountering intense opposition from the insurance industry and other medical groups.
“In California, nobody can say no to an insurance company, and we’re paying the price for it with rate hikes every year,” said Doug Heller, executive director of Consumer Watchdog.
The insurance industry says the ballot initiative is unnecessary because health reform has brought extra scrutiny to premiums and company practices.
“Rate regulation might sound appealing,” said Steve Shivinsky, a spokesman for Blue Shield. But “it will layer in another complex bureaucratic level of rate review that will gum up the system.”
http://www.latimes.com/business/la-fi-0223-health-insurance-rate-hikes-20120223,0,7634380.story
Home Health Providers Fight Minimum Wage Rule
Thursday, February 16th, 2012
USA Today published an article on Obama’s Proposal to ensure home care agencies pay minimum wage. http://www.usatoday.com/news/washington/story/2012-02-15/home-health-care-minimum-wage/53110228/1
Here is an analysis of the article from Joe Hafkenschiel, CAHSAH’s President.
This article does not present a very balanced picture of the issue. First, it is not about minimum wage for home health workers. The federal companion regulation is an exception to the general rule to pay minimum wage and overtime for workers who are serving as companions to the elderly and disabled. By the nature of the work, the worker must often work more than 8 hours per day. The regulation provides a balance between paying the worker a living wage and keeping the care affordable for the client. In California, which requires all workers to be paid the minimum wage of $8 per hour, a live-in companion working 24 hours is paid between $128 and $192 per day. If the exemption is eliminated, that same worker would have to be paid $304 per day resulting in a charge to the client of $500 to $600 per day. Home care would no longer be less expensive than assisted living or a nursing home and many people would be institutionalized. Most importantly, the workers would not benefit. Their shifts would be reduced to 8 hours to avoid overtime (which most clients cannot afford) and their pay would fall to $64 per day. The Department of Labor has done a very poor analysis of this proposal and we should all be wary of the unintended consequences.
Home Health Spared from 10% Medi-Cal Reduction
Wednesday, January 11th, 2012
In October 2011, the Centers for Medicare & Medicaid Services approved the state’s proposed 10% reduction to Medi-Cal rates for all provider types except three: physician/clinic services for children, home health services, and distinct part subacute facilities. This was a crucial victory for Medi-Cal beneficiaries!
Neil’s Spin: The Medi-Cal Home Health Rates are already sub-standard and less than 1% of licensed home health agencies routinely accept Medi-Cal referrals. A 10% reduction would have been devastating to patients currently using Home Health and it would have created an access to care crisis in California.
