2013 was an eventful year within the legal and regulatory realms for home care and hospice providers. Below are the most significant developments from the legal and certain regulatory issues from this past year:
1. Obama Administration delays the start of the employer mandate provisions of the health care reform law
Responding to the pleas of thousands of small businesses in home care and otherwise, President Obama moved the effective date of the ACA provision mandating that companies either provide health insurance to their employees or pay significant monetary penalties. A NAHC study showed that the vast majority of home care companies, particularly those that provide Medicaid and private pay services, do not currently provide all full-time workers with health insurance. NAHC advocated for the delay, explaining to administration officials that care access would be significantly jeopardized by these requirements.
2. US Department of Labor issues final rule on the companionship services overtime exemption
After maintaining a consistent policy for over 37 years, the US Department of Labor completely changed its interpretation of the Fair Labor Standards Act and revised the “companionship services” exemption from minimum wage and overtime compensation. The longstanding rule had been successfully defended by NAHC twice at the United States Supreme Court. The new rule redefines companionship services to virtually eliminate any potential application in home care by removing personal care as a central part of “companionship services.” Additionally, DoL eliminated any application of the remaining exemption to workers employed by third parties such as home care agencies. NAHC is evaluating a lawsuit to challenge the changes while working to get payers such as Medicaid to cover any new costs.
3. CMS Issues Home Health Rate Rebasing Rule
The Centers for Medicare and Medicaid Services (CMS) issued the Final Rule setting out payment rates for home health services in 2014. This rule includes the start of the 4-year rate rebasing required under the Affordable Care Act. CMS reduces the base episode rate by the equivalent of 3.5% of 2010 rates while increasing LUPA per visit rates by 3.5%. The Final Rule was a modest improvement over the proposed rule due to a recalibration of case mix weights and a reduction of the amount of the rate cut. NAHC continues to pursue revisions to the rebasing rule through Congress and potential litigation.
4. Moratorium on New Home Health Agencies in Certain Areas Instituted
CMS applied the authority it was given under the ACA to establish moratoria on new home health agencies for the first time in Miami-Dade County and an area around metropolitan Chicago. NAHC has long recommended the use of moratoria as a program integrity measure to deal with abuses that surface in market-saturated areas. It is expected that the six month moratoria will be extended another six months in both locations in 2014, and that CMS may add other geographic areas as well.
5. CMS Initiates Post-Acute Care Bundling Demonstrations
As the first big step towards innovation in Medicare payment policy directly affecting home health services, CMS approved, for Phase 1, a series of bundling proposals for post-acute care. These proposals including bundling with hospitalization payment and post-acute care only. NAHC views bundling as a positive for home health care as the cost-effectiveness of care in the home far exceeds that available on an institutional basis.