The Top Legal, Regulatory Issues Home-Based Care Providers Are Facing In 2023

There are a number of key issues that home-based care providers looking to navigate legal and regulatory hurdles need to keep their eye on – some old, and some new. 

In some areas, it will be important for providers to increase their advocacy efforts, like when it comes to a potential ban on non-competes, Angelo Spinola, the chair of home care, home health and hospice at the law firm Polsinelli, told Home Health Care News.

“When the industry has pulled together, worked together, and spoken in a singular voice, that has been a very effective strategy,” he said.

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A potential ban on non-competes is just one of the many issues providers need to prepare for. HHCN recently caught up with Spinola and Katy Barnett – director of home care and hospice operations and policy at LeadingAge – to get a complete overview nearly halfway into the year.

Increased government investigations into the home-based care industry

During the height of the COVID-19 pandemic, many home-based care providers relied on the financial lifeline of government relief programs.

Moving forward, home-based care providers should expect to receive more attention from government watchdogs, as those relief programs — such as the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) and employee retention tax credit programs — receive more scrutiny, according to Spinola.

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“There’s been a lot of investigation around qualifications to participate in those programs, the use of funds from those programs, and I think we can expect to see that trend continue,” he said.

An increase in investigations means that providers will need to be more proactive.

“Understand what the requirements are, and take proactive steps to be in compliance with those requirements before the government investigation,” Spinola said.

Specifically, it will be imperative for providers to perform self-audits and be able to trace how they’ve spent these funds.

Aside from providers’ use of the aforementioned program funds, there is also more investigation activity around anti-kickback issues and referral relationships.

The Anti-Kickback Statute makes it a felony to “knowingly and willfully offer to pay, solicit or receive any remuneration in order to induce referrals of items or services reimbursable by a federal or state health care program.”

Many providers may not be aware that these laws apply to them, according to Spinola.

“There are a lot of providers that don’t realize that certain states, like Florida for example, that have all payer statutes,” he said. “This means it’s not a requirement that you’re involved in reimbursement with a federal program to be subject to those rules. You can be in a completely private-pay situation where there’s still anti-kickback implications.”

Public health emergency reverses waivers and flexibilities

With the end of the public health emergency — on May 11 — came the end of various waivers and flexibilities meant ease the challenges providers faced throughout the pandemic.

For providers, returning to pre-pandemic regulatory standards will be a major compliance effort moving forward, according to Barnett.

“If you took advantage of any of the waivers from the Centers for Medicare and Medicaid Services, you’ve got to start back tracking and retraining your staff, many of whom you might have hired during the pandemic who may not know the normal order of things yet,” she told HHCN.

Waivers such as the therapy assessment waiver – which allowed therapy staff to complete the initial or comprehensive assessment for patients where therapy was not the qualifying service – and the OASIS 30-day completion waiver are no longer available to providers.

“This means a totally different staffing model needs to be in place to get nurses out, and OASIS completed in five calendar days,” Barnett said.

Home-based care employment practices

At the start of the year, the Federal Trade Commission (FTC) took aim at non-competes, proposing a nationwide ban.

Many experts believe that the rule will be finalized. If it does go into effect, it will have significant consequences for the home-based care industry, according to Spinola.

“That has an impact in this industry, not not only with executives who are subjected to non- compete agreements because those agreements will be invalidated if the rule is implemented, as it’s drafted today, but also with respect to client service agreements,” he said.

It’s not rare to see home care agencies include a no-hire clause in a client-services contract that prevents a client or their family from hiring, either directly or indirectly, any employee of said company for a certain period of time.

Non-compete agreements are different from no-hire clauses, but an intensified focus on one could lead to home care providers’ employment practices being watched more closely.

Along these lines, independent contractor issues are also being watched more closely.

Last year, the U.S. Department of Labor closed comments on a proposed rule that would change the framework for determining whether a worker is an employee or an independent contractor.

“The department has expressed concern about misclassification in a variety of industries, including home care, and we expect continued scrutiny going forward,” Barnett said. “Different agencies use different models, so the impact of a final rule on those that classify caregivers as independent contractors will be an important issue to watch.”

Finally, the softening of joint employment standards should also be top of mind for providers.

Broadly, joint employment refers to individuals that work for more than one company. One of the companies is responsible for the individuals’ W2s and compensation, and the other company benefits from the individuals work services. Workers from staffing agencies are an example.

“The softening of joint employment standards makes it easier to establish liability across separate entities,” Spinola said. “That’s going to affect the franchise models, individual liability for founders and CEOs in lawsuits, both private and with the government. It will also impact the nurse registry model and virtual marketplaces and those who utilize independent contractors.”

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