Home Health Industry: Care Will Suffer Under New Wage Rule

Home health care providers are fighting back against an Obama Administration proposal to require that all home home health companies pay their workers the federal minimum wage. The companies have long been excluded from federal wage law; instead they have been subject to local and state rules, USA Today reports.

The companies have been more profitable than in many industries, the report states.

One of the industry’s leading companies, Home Instead Senior Care, spent at least $362,000 in 2011 fighting the proposal while it also touts an 18.8 yield ratio of investment to revenue, which was the highest in the group reviewed by the magazine Franchise Business Review.

A spokesman for Home Instead sent a news release from the Private Duty Homecare Association stating that the proposed rules would cut employees’ hours and, ultimately, hurt caregivers.

Home health companies have been more profitable in the past two years, even as other businesses have been hit hard by the economy, said Michael Lubansky, an analyst with Sageworks, which analyzes financial data for privately held companies.

…Minimum wage is currently $7.25 an hour, and a Labor Department proposal issued in December calls for home health agencies to follow federal wage and hour laws for their workers, overturning a decades-old law that exempted home health care aides from federal wage laws.

In light of cuts to Medicaid reimbursement rates, the industry may be unable to keep up under the wage increase.

Read the full article at USA Today.

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