The House Education and Workforce Committee Subcommittee on Workforce Protections recently held a hearing entitled, "Redefining Companion Care: Jeopardizing Access to Affordable Care for Seniors and Individuals with Disabilities." The focus of the hearing was the Department of Labor’s recent Final Rule on the Companionship Exemption for home care workers.
For more on the Final Rule, please see NAHC Reportfrom September 18, 2013.
Lucy Andrews, RN, NAHC’s Board Vice-Chair was one of the witnesses. Ms. Andrews was joined be her fellow witnesses Mr. Joseph Bensmihen, President and CEO of United Elder Care Services, Inc; Ms. Karen Kulp, President and CEO, Home Care Associates; and Mr. Alexander J. Passantino, Senior Counsel, Seyfarth Shaw LLP.
In his opening remarks, Chairman Tim Walberg (R-MI) stated that:
“For nearly 40 years Congress has recognized the invaluable service delivered by in-home companion care workers…Congress deliberately exempted in-home companion care workers…Policymakers realized many Americans rely upon the support of companion care workers in order to maintain a safe, healthy, and productive lifestyle in their own homes.
The need for in-home companionship care is tremendous, especially among elderly and disabled individuals. Roughly 57 percent of people receiving these services are age 65 or older and approximately 73 percent have functional limitations. The intent of Congress was to protect a vulnerable group of Americans, yet that protection is being discarded by the Obama administration.”
Later in the hearing, Chairman Walberg reiterated his own experience with home care workers who were companions to his mother for “over two years.”
Ms. Andrews was the first witness to testify, and emphasized the problems that home care agencies will face under the Department of Labor’s Final Rule:
“The U.S. Department of Labor has issued a Final Rule that dramatically changes longstanding overtime compensation exemptions that would effectively eliminate the application of the exemptions for home care services. Specifically, the rule redefines “companionship services” to limit the application of the exemption to primarily “fellowship.” “Fellowship” is not care and does little or nothing to keep people out of nursing homes or higher acuity facilities…
Based on our experiences in states that previously have required overtime compensation to personal care workers, we believe that the rule will trigger the following:
- Moderate to significant increases in care costs
- Restrictions in overtime hours to the detriment of the workers’ overall compensation
- Loss of service quality and continuity
- Increased costs passed on to the patients and public programs such as Medicaid that would decrease service utilization, increase unregulated “grey market” care purchases, and increase institutional care utilization rather than absorbing and covering the higher cost of care.
With the requirement for overtime compensation, I will either need to restrict their working hours or increase my charges to my clients.
If I raise the charges to my clients, I know that most will then limit the amount of care they purchase even if it is to a level less than needed. For clients on fixed incomes, the cost of increasing care will be too much for them to carry and they will look to other options, going with less care or using the underground market that, at best, leaves them with a stranger caring for them without the protections a third party employer offers. By default, the consumer will become the employer of record with all of the employer responsibilities and risks.
If I restrict the employees’ working hours, they will be paid less than they get today. For example, a client who has 10 hours of care a day will either have to pay the overtime or have two caregivers dividing the 10 hours into two shifts. This decreases the hours each employee work and decreases the continuity of care clients are used to when paying privately for care services.
Another option is that I reduce the employees’ base hourly wage to accommodate overtime costs.
Either approach will likely lead to higher turnover in my caregiving staff, increasing my costs of recruitment and training of new employees. Our industry is already struggling with high turnover rates and a cut in pay puts us at the bottom of the list of desirable work. Ultimately, it impacts access to the care that the increasing numbers of Baby Boomers and the disabled community rely on to stay at home.”
One of the four panelists, Karen Kulp, was in favor of the Final Rule, while Ms. Andrews, Mr. Bensmihen and Mr. Passantino emphasized the negative consequences of the Final Rule.
The hearing is a strong indication that the issues involving home care and the overtime exemption changes will not be allowed to go away easily. Despite the issuance of the Final Rule, the House committee is not giving up on finding better ways to protect both the workers and the vulnerable elderly and disabled that they provide care. Further, as noted by Congressman Joe Courtney (D-CT), who favors the rule change promulgated by the Department of Labor, the effective date of January 1, 2015 provides an opportunity to have the Department fix any of the problematic aspects of the rule.
NAHC and other organizations continue to work to remedy the challenges presented by the new rule. Discussions have occurred with federal Medicaid officials designed to find solutions to the likely cost and rate pressures that the rule will instigate in Medicaid home care. Also, the Government Accountability Office (GAO) is engaged in an analysis of the rule and its process of development. Finally, litigation is under serious consideration among the stakeholders rom the provider and disability communities.
For more information on the hearing, please click here.
To read Ms. Andrews’ full testimony, please click here.