Proposed Rule Change by Department of Labor Would Harm the Frail Elderly and Adversely Impact Home Care Workers, the Businesses that Employ Them and the Government Programs that Allow Aging at Home
Survey of over 1,500 home care companies predicts major issues for the industry and consumers
For additional information:
Barbara D. Woolley
January 30, 2012 (Washington D.C.) – The Private Duty Homecare Association of America (PDHCA) and the National Private Duty Association (NPDA) today released the results of a national survey of home care agencies on the impact of the U.S. Department of Labor’s (DoL) proposed rule which effectively eliminates the companionship services overtime exemption in private pay home care and live-in services. The survey results demonstrate the negative consequences which would occur for employed caregivers, the clients/patients they serve, and the home care companies if the exemption is eliminated.
The greatest negative impact on clients/patients reported by respondents is the loss of continuity of care brought on by the need to assign multiple caregivers to control overtime costs. A common belief is that clients are then driven into the underground economy, hiring workers “under the table” where quality control and oversight that an agency worker provides is lost, exposing the elder client to greater chances of abuse, fraud and inconsistency in care.
The DoL proposal has the potential to cut employed caregiver hours and compensation by imposing unaffordable overtime pay on the voluntary hours they work in excess of 40 per week. In addition to losing continuity of care, the cost for care will also increase. The survey indicates that 81.8 percent of companies expect to increase their private pay billing charges with 23.7 percent anticipating a need to scale back their availability of care. These expectations are warranted as 45.2 percent of companies currently required to pay overtime under state laws have increased their charges and 10.4 percent reduced care access.
Shelle Womble, Chairman of PDHCA commented, “As an industry we believe that eliminating the companionship exemption will force many seniors and people with disabilities into assisted living or institutional care because of the increased cost of in-home care. It will increase federal spending by adding cost to in-home care provided through federal programs, and by increasing utilization of government-funded institutional care.”
Kevin D. Turner, Executive Director of NPDA, stated, One of the consistent findings referenced by agencies was restricting or expecting to restrict overtime hoursfor employees. So, instead of making more money through overtime wages, the average home care worker will simply work for multiple agencies to get the hours they want to work in a week. This makes it harder for the home care employee who will have to match total hours desired with piecing together schedules that will also include additional expenses for travel to more locations.
The predominant impact on the employed caregivers is the restriction in working hours. Nearly 63 percent of the respondents currently obligated to pay overtime under state law report that they restrict overtime hours. More than 86 percent of the companies that will face a new overtime requirement if the proposed rule takes effect report that they will restrict the hours worked by staff to prevent overtime costs.
Over 93 percent of the home care companies reported an expectation of a moderate to significant increase in business costs. This mirrors the actual experiences of companies with a current overtime requirement where nearly 69 percent report moderate to significant business cost increases. The primary cost increases are in human resources, 67.4 percent expected/38.2 percent actual, and staff training costs, 67.9 percent expected/38.3 percent actual.
Some of the potential tactics and adjustments that companies are or will make as a result of the ruling, should it be put into place, include cutbacks on employee benefits and pay increases, withdrawal from Medicaid services, terminating live-in care, and reduction of current base pay of personal care workers.
The full survey report is available here.
The survey was conducted in December 2011 as a joint project between the Private Duty Homecare Association (PDHCA), an affiliate of the National Association for Home Care & Hospice (NAHC) and the National Private Duty Association (NPDA). Nearly 1500 responses from home care companies in all 50 states, the District of Columbia, U.S. Virgin Islands, and Puerto Rico were received.
The Private Duty Homecare Association (PDHCA) was established by the National Association for Home Care & Hospice (NAHC). It is a trade association of home care providers dedicated to providing an array of home care services, including non-medical and supportive services to the aged, infirm, or disabled client to help maintain safety and independence at home, wherever home is. PDHCA focuses on providing valuable information and education to its members as well as educating consumers as to the options to remain at home with home care. The focus of member services is in consumer education, industry advocacy and agency support. PDHCA is designed to answer all the questions that private duty home care providers may have regarding their businesses and practices. Please visit PDHCA on the web at www.pdhca.org, on Twitter @PDHCA or www.facebook.com/PDHCA.
The National Private Duty Association (NPDA) is the nation’s first association for providers of private duty home care, which includes non-medical home care services. The NPDA is the recognized resource for information and definition of private duty home care practice, supported by a strong national membership of providers. The NPDA currently represents more than 1,200 member organizations throughout the United States that provide private pay in-home care services for the elderly and disabled. For more information about the National Private Duty Association visit www.privatedutyhomecare.org or call (317) 663-3637.