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Tags Posts tagged with "Proposed Rule"

Proposed Rule

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On July 2, the U.S. Department of Labor (DOL) took an important step to restore fairness and flexibility in the home care industry by issuing a proposed rule that would rescind restrictive provisions introduced in 2013 under the Obama administration. Those earlier changes, fully enforced in 2015, significantly narrowed the “companionship services” exemption under the Fair Labor Standards Act (FLSA), adding complex and costly wage requirements for home care agencies and Medicaid-funded services.

The 2013 rule redefined key terms, eliminated the exemption for third-party employers, and imposed overtime obligations on agency-employed direct care workers — contributing to increased costs and administrative burdens. These unintended consequences have strained both providers and public programs, particularly in Medicaid-funded home and community-based services (HCBS).

Now, DOL is proposing to correct course. In its justification, the Department noted that the previous regulations “might not reflect the best interpretation of the FLSA and might discourage essential companionship services by making these services more expensive.”

Why This Matters
This proposed rule is a welcome change for providers, participants, and state Medicaid leaders alike. Overtime costs are a major driver of financial pressure in long-term services and supports. When direct care workers live in the same home as the individuals they serve, current law allows participant-directed employers to avoid overtime pay. However, because of the 2013 changes, agency-employed workers doing the exact same job do not receive the same treatment — creating an inequitable and unsustainable two-tiered system.

If finalized, the proposed rule would allow third-party agency employers to once again access the same companionship exemption. This would create consistency across employer types and make it easier to recruit and retain direct care staff — particularly in shared living or live-in arrangements that are vital to participant independence and stability.

Act Now: Submit a Letter of Support
The DOL is accepting public comments on this proposed rule, and it is crucial that the provider community raise its voice. RCPA encourages home care agencies, managed care partners, and Medicaid stakeholders to submit letters of support highlighting how this change will:

  • Increase flexibility in service delivery;
  • Align federal and state wage policy;
  • Promote cost-effective care models;
  • Support direct care worker retention; and
  • Sustain vital programs that keep individuals in their homes.

Your voice matters. Together, we can ensure federal policy reflects the realities and needs of today’s home and community-based care system. View a sample letter for public comments here.

How to Submit Your Letter of Support
Visit the Regulations government website and search for the DOL proposed rule on companionship services. Comments must be submitted by July 31, 2025

If you have any questions, contact Fady Sahhar, RCPA PD&A Division Director.

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Last week, the Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2026 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) proposed rule, as well as an accompanying fact sheet. The rule does not include proposed changes to the IRF coverage requirements. On the payment side, the rule would provide an overall 2.8% increase to estimated payments per discharge, compared to the 2.5% payment update that CMS finalized for FY 2025. The rule is more substantive with respect to the future Quality Reporting Program (QRP) changes. Specifically, the rule proposes to remove certain quality measures and standardized patient assessment data elements (SPADE) implemented in recent years relating to COVID-19 vaccination and social determinants of health (SDOH), and to modify the process for reconsideration of IRF QRP non-compliance penalties. Finally, the rule includes various requests for information (RFI), soliciting feedback on the IRF QRP and IRF-Patient Assessment Instrument (PAI).

The proposed rule will be published in the Federal Register on April 30, 2025. RCPA will provide a more detailed overview of the proposed rule following this date. Comments on the rule are due to CMS by June 10, 2025.

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Image by Werner Moser from Pixabay

On November 7, 2023, RCPA submitted comments to the Department of Labor’s Hour and Wage Division regarding the proposed rule “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (RIN 1235-AA39).” While we understand the need to modernize and update the Fair Labor Standards Act exemption regulations, RCPA strongly urges DOL to re-examine the proposed new salary threshold in a manner that considers the unique pressures on health care providers, as well as regional variations in the cost of living and average salary for human services providers. As currently written, the proposal unfortunately does not consider the implications of current health care funding for safety net services. Thus, the current proposal would have a potentially devastating effect on health care organizations serving low-income individuals with serious and complex disorders and disabilities, resulting in the need for service cutbacks and program closures.

You can read the full comments here.

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Late yesterday, the Centers for Medicare and Medicaid Services (CMS) issued the fiscal year (FY) 2024 inpatient rehabilitation facility prospective payment system (IRF PPS) proposed rule.

The proposed rule includes a 3.7 percent payment increase, compared to the 3.9 percent payment update that CMS finalized for FY 2023. This payment update reflects the effects of the proposed IRF market basket update for FY 2024 of 3.0 percent, which is based on the proposed IRF market basket increase factor (3.2 percent), productivity adjustment (0.2 percent), and outlier payment increase (0.7 percent).
** Please note that these figures are subject to change in the final rule if updated forecasts become available, which typically occurs.

CMS is making a number of changes to the Quality Reporting Program (QRP), including the future addition of a discharge function score measure and patient-level COVID vaccination measure as well as a modification of the current healthcare personnel COVID-19 vaccination measure to reflect the latest vaccination recommendations.

In addition, CMS is proposing to allow hospitals to open a new IRF unit and begin being paid under the IRF PPS at any time during the cost reporting period (rather than the current restrictive enrollment rules). The proposed rule does not address any of the COVID-19 PHE waivers, including the three-hour rule and virtual team conferences, nor does it include any further discussion of the expanded transfer policy (to include certain discharges under the care of home health) that was the subject of a Request for Information (RFI) in last year’s rule.

A more detailed and extensive summary of the proposed rule will be forthcoming.

The proposed rule will be published in the Federal Register for April 7, 2023. Comments on the proposed rule will be considered until 5:00 pm on June 2, 2023. For additional information, CMS also released a fact sheet.

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