Independent Contractor Changes and Other Legal Trends to Watch in Home Care

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As a number of regulatory and legal hurdles are at play, it is important for home care providers to understand the hurdles they face and how to possibly overcome them.

On the home health side, there’s the new 2023 payment rule to navigate and the home health value-based purchasing model (HHVBP).

There’s also a lot going on with independent contracts that could have an effect on home care providers. And, of course, the workforce continues to be a challenge from a recruitment, retention, and legal perspective.

“While the need for services has never been greater, the great exodus of workers from the market – combined with stricter immigration policies – has led to labor shortages in an industry that is already difficult to staff. Emina Poricanin, managing attorney at York-based New Poricanin Law, told Home Health Care News.

It’s particularly interesting, said Poricanin, to see how states and the federal government have passed various laws to encourage the recruitment and retention of the home care workforce.

An example is the increase in the minimum wage for caregivers in New York.

“In some states like New York, the government has addressed these difficulties by raising the minimum wage, but this has not been funded in a timely or adequate manner,” Poricanin said. “We are seeing conflicts with managed care and providers to ensure that the funds are there to pay these workers. It will be fascinating to see if the government gets its return on investment from all those dollars.

A service like home care that is in high demand—combined with a more informed workforce that insists on their rights—creates momentum that requires proactive action by providers.

“The peak of employment-related legal issues is creating a perfect storm that has descended on providers, just as home care and community care are gaining momentum and finally gaining recognition in the care community of health they have long deserved,” Poricanin said.

Independent contractor changes

Earlier this month, the US Department of Labor (DOL) released a proposed rule that would significantly impact the test used to determine if someone is an independent contractor or an employee under Fair Labor Standards. Act (FLSA).

All home care and home health agencies should be watching the rule closely, Angelo Spinola, co-chair of the health and home care industry group at law firm Polsinelli, told HHCN.

Essentially, the rule will affect the analysis of whether a potential employer – such as a registry, virtual marketplace or other agency operating under a consumer-driven service delivery model – exercises control over a carer.

“Registrars and independent contractor models have an unfair advantage in not having to pay some of the labor costs,” Spinola said. “The way the DOL generally frames the crackdown on the use of independent contractors, which will level the playing field. So I think the risk of misclassification can lead to agencies having a better success rate in recruitment and retention. It is certainly possible.

If finalized, the rule could have a major impact on the entire home care industry.

“It affects everyone, because you’re usually going to find some form of freelance contracting in one of these industries,” Spinola said.

Following the COVID-19 pandemic and issues in nursing homes and hospitals, home care has a strong place at the table of the healthcare continuum.

Today, many vendors are trying to capitalize on this attention and recognition. To do that, Poricanin said, providers need to make sure they’re maximizing any government incentive programs for their agencies.

“Home care is in the spotlight, and operators don’t have the time, energy or desire to be in the spotlight as a bad employer,” Poricanin said. “Or as an employer who cannot process cases or respond to referrals.”

For vendors, having a specific strategy and executing it should be the top priority going forward, Poricanin said.

“Many providers have an ad hoc approach to these challenges and don’t understand where home care is today compared to even five years ago,” Poricanin said. “To be successful, suppliers must see the big picture and have a plan to meet these challenges.”

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