Independent Contractor Changes And Other Legal Trends To Watch In Home-Based Care

As a number of regulatory and legal obstacles hang in the balance, it’s important for home-based care providers to understand the obstacles they face and how to potentially overcome them.

On the home health side, there’s the new payment rule for 2023 to navigate and the Home Health Value-Based Purchasing (HHVBP) Model. 

There’s also a lot going on with independent contracting that could have an effect on home-based care providers. And, of course, labor continues to be a challenge from recruiting, retention and legal perspectives.


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

It is particularly interesting, Poricanin said, seeing how states and the federal government have passed various laws to incentivize the recruitment and retention of the workforce into home-based care.

One example is the raise in 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 that has not been funded on a timely or adequate basis,” Poricanin said. “We’re seeing conflicts with managed care and providers to ensure the funds are there to pay these workers. It will be fascinating to see if the government gets their return on investment from all those dollars.”

A service like home-based care that is in high demand — combined with a more informed workforce that is insisting on their rights — creates a dynamic that requires proactive steps from providers.

“A culmination of employment-side legal issues is creating a perfect storm that has befallen providers, just as home care and community-based care is gaining momentum and finally getting the recognition in the health care community that it has long-deserved,” Poricanin said.

Independent contractor changes

Earlier this month, the U.S. Department of Labor (DOL) issued a proposed rule that would have a significant impact on the test used to determine whether someone is an independent contractor or an employee under the Fair Labor Standards Act (FLSA).

All home care and home health agencies should keep a close eye on the rule, Angelo Spinola, the co-chair of the home health and home care industry group at the law firm Polsinelli, told HHCN.

Essentially, the rule will affect the analysis of whether a potential employer — like a registry, virtual marketplace or other agency operating under a consumer-directed service delivery model — is exerting control over a caregiver.

“The registries and the independent contractor models have an unfair advantage by not having to pay for some of the labor costs,” Spinola said. “The way the DOL typically frames that is cracking down on the use of independent contractors, which will level the playing field. So I think that risk of misclassification may cause the agencies to have a better success rate around recruiting and retention. That’s certainly possible.”

If finalized, the rule could have a major impact on the whole home-based care industry.

“It affects everybody, because typically you’re going to find some form of independent contracting across any of these industries,” Spinola said.

Following the COVID-19 pandemic, and the issues that occurred in nursing homes and hospitals, home care has a solid seat at the table of the health care continuum. 

Now, many providers are trying to capitalize on that attention and recognition. In order to do that, Poricanin said, providers have to make sure they are maximizing all the government incentive programs for their agencies.

“Home care is in the spotlight, and operators do not have the time, energy or desire to be in the spotlight as a bad employer,” Poricanin said. “Or as an employer that cannot staff cases or respond to referrals.”

For providers, having a specific strategy and executing on it should be top priority moving forward, Poricanin said.

“Many providers have an ad hoc approach to these challenges and do not appreciate where home care stands today versus even five years ago,” Poricanin said. “To be successful, providers need to appreciate the big picture and have a plan to tackle these challenges.”

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