NAHC Fighting for the Companionship Exemption

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By Terry Miller, RN 
Regulatory Advisor, McKesson

Fighting for the Companionship ExemptionThe National Association for Home Care and Hospice is mounting a vigorous campaign to re-establish the companionship exemption—one of the topics addressed during a recent NAHC webinar. The outcome could have a profound impact on your agency’s operations.

In September, the U.S. Department of Labor issued a final rule that redefined the “companionship services” and “live-in domestic services” exemptions from minimum wage and overtime compensation. The change takes effect on January 1, 2015. This new definition of “companionship services” excludes all Medicaid-covered services from minimum wage and overtime exemptions. The definition limits “incidental services” – such as feeding, dressing, grooming, driving to appointments, laundry and bathing – to no more than 20% of the work done. Medicaid home care benefits do not cover “fellowship and protection” within “companionship services.”

The change in the companionship definition means that, in each state, Medicaid programs will face a new cost that they can’t easily meet, the association explains. Unless Medicaid raises its payment rates, providers should carefully monitor expenditures to have sufficient funds to cover any overtime costs.

NAHC has evaluated several options. The possibility of legislation to reverse the rule change has been discussed, but that option has limited chance of success considering the Obama Administration fully supports this companionship exemption rule.

Legal action is also a possibility. Twice in the past, NAHC successfully defended the current rule before the U.S. Supreme Court, most recently in 2007. However, legal action would be more difficult this time because NAHC would seek to invalidate the rule. That action would require revising the definition of “companionship services” as well the exclusion of third-party employers from exemption.

Private-pay home care would be handled differently, since those businesses set their own rates—and patients are protected from higher care costs by a tax credit program.

Either way, the resolution of this issue will require tremendous advocacy efforts at NAHC and is an issue that you should be watching.

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