Author: Sam Sadovic

Our firm has received numerous questions over the last several days as the June 1, 2022 deadline for wage parity compliance certification approaches. This year will be the first time that providers will be submitting documentation evidencing their compliance with the wage parity law. Here are some FAQs that we have received from clients on this topic:

Why are Plans Asking us for Compliance Information Now? Isn’t Our Deadline to Provide this Information June 1, 2022?

Providers and payors have different obligations insofar as this year’s certifications are concerned. The providers (i.e., LHCSAs and FIs) must produce LS300, LS301 forms, and any supporting documentation to each payor with which they do business, at some point in time before June 1, 2022. The deadline by which this information must be submitted to the payors will be set by the payor, but it will be some date before June 1, 2022. The providers will also have to certify to compliance online. Conversely, payors (e.g., CHHAs and MLTCs) need to evaluate the compliance of the providers that they contract with and certify to those providers’ compliance with wage parity by June 1, 2022. The reason that payors will be requesting providers’ wage parity information now versus later is because payors need time to review the providers’ data and be in a position to certify to those providers’ compliance by June 1.

What are Plans Going to do with the Wage Parity Information Received from Providers?

Payors are required to report any “reasonably suspected” violations of the wage parity law to the New York Department of Labor (“DOL”). The State, without resources to adequately audit and monitor providers’ compliance with the Wage Parity Law requirements, has effectively outsourced this function to the payors. Home care providers and FIs are advised to carefully prepare their LS300 and LS301 forms, in order to avoid triggering any referral of their agency to the DOL. In view of the immense responsibility for verifying wage parity compliance that has been delegated to the payors by the State, payors may be inclined to take the “better safe rather than sorry” approach and over-report providers that they suspect of noncompliance.

Who can serve as an Independent Auditor?

Providers’ wage parity hours and expenditures have to be audited and the providers’ compliance has to be certified by an independent auditor. The term “independent” is defined by “GAAP according to Financial Accounting Standards Board (FASB).” The provider does not define what “independent” means. The independent auditor that has to sign off on the LS301 has to certify that they are in fact independent.

How many LS300s do we need to fill out?

Providers must complete a single LS300 for every plan that they contract with.

For entities that are both a FI and a LHCSA under one EIN, the hours and payments reported will be aggregated in a single LS300 per plan.

Providers are advised to seek counsel about how to report benefits on a per-plan basis. Benefits are accrued based on all hours worked, regardless of what plan’s hours were worked. Thus, providers have no clear way of separating out, for example, PTO that was earned under hours worked for plan ABC versus plan XYZ.

Are Overtime Hours and Spending Reported?

It is our position that overtime hours and spending are reported, since overtime hours are also considered wage parity hours. Thus, providers will report overtime pay under wages paid, and under overtime hours of care.

How Should Providers Separate out “Universal” Benefit Programs for Purposes of Reporting?

This is a bigger topic than this blog allows. Benefits that are governed by the Internal Revenue Code are generally required to be maintained separately, as each benefit is subject to its own rules on accruals, usage, forfeiture, annual limits, etc. Comingling benefits is generally not allowed. Benefit programs that are structured improperly carry the risk of losing their nontaxable status, which means that the NYS Department of Taxation or the IRS could claim that payroll tax should have been paid on those benefits. And from a wage parity standpoint, the Wage Parity Law reporting requires that each benefit’s spending be separately reported as its own “line item.” Comingling transit benefits with prescription coverage, for example, prevents the provider from reporting how much was spent by the provider per benefit.

New York Senator John Mannion, the Chairman of Committee on Disabilities, has introduced a bill to repeal and replace the CDPAP RFO with a registration process for all fiscal intermediaries that are operating as of April 1, 2022. The proposed bill, if passed, would allow fiscal intermediaries that did not receive a RFO award to continue operating. Instead of complying with the RFO results, all fiscal intermediaries would instead be required to comply with the new requirements that have been proposed. Some of these new requirements in the Mannion bill include:

1. All fiscal intermediaries would have to register with the Department of Health (“DOH”) prior to providing fiscal intermediary services. The DOH would not deny registration to an existing fiscal intermediary in good standing as of April 1, 2022.
2. A registration would be effective for 5 years.
3.  The fiscal intermediary would need to pay a registration fee that will not exceed $5,000.
4.  A fiscal intermediary applying for an initial registration would require the applicant to attest to various items, including that the applicant is able to “appropriately” serve consumers, and can demonstrate compliance with all applicable laws. In addition, the fiscal intermediary would have to establish several of the factors that were used in the RFO, such as the ability to maintain a local presence and maintain and review a disaster preparedness and emergency plan, have an effective
   organizational structure with qualified administrative staff, ensure appropriate cultural and linguistic competencies to serve consumers and personal assistants, and maintain written policies and procedures.
5.  The Commissioner would have the right to impose penalties on any fiscal intermediary that fails to comply with the registration requirements and terminate the registration of any fiscal intermediary that the Commissioner finds is endangering the welfare of the public.
6. Registered fiscal intermediaries would be required to submit a cost report and a report listing quality measures and other data, including the number of timely processed payroll cycles, the number of accurate paychecks, the number of days to onboard a personal assistant, the total number of referrals made each month by a MCO or a LDSS, information related to social determinants of health, cultural or racial disparities or related information, and information about complaints filed with the fiscal intermediary or against the fiscal intermediary.
7. The fiscal intermediary would be required to comply with various data privacy and security laws and report annually the direct care and administrative costs of personal assistant services.

We will keep you posted about the progression of this bill as the budget season moves to conclusion by April 1, 2022. In the meantime, clients who have questions about the implications of this proposal on their RFO award or their status as a non-RFO recipient are welcome to reach out to us.

Effective Thursday, February 10, 2022, Governor Hochul lifted the “vaccinate or mask up” mandate for the majority of New York businesses. However, healthcare settings are excluded from this waiver and must continue to require their staff to mask up, regardless of vaccination status. Home care offices (and, of course, the home setting) are considered healthcare settings. If providers have any questions about these requirements, please let us know.

Last week, a grand jury indicted four managers of home health care agencies for allegedly conspiring to “suppress wages and restrict the job mobility of” essential workers. The indictment alleges that the four individuals conspired to eliminate competition for the services of personal support specialists (i.e., aides) by agreeing to fix the rates paid to the workers and by agreeing not to hire each other’s aides. The indictment alleges that, among other actions, the individuals “participated in conversations and communications regarding MaineCare’s rate increases,” including communications “using an encrypted messaging app,” attended virtual and in-person meetings and “engaged in discussions to collectively fix the hourly rates for workers and refrain from hiring each other’s workers, and exchanged a series of group messages agreeing to fix rates at $15 per hour for workers. The indictment follows on the heels of a statement by a representative of the U.S. Department of Justice (“DOJ”), announcing that the DOJ will continue to “target [] excessive concentration and abuses by employers in labor markets.”

In a tight market, employers that are considering pacts or agreements with other employers whereby each employer abstains from hiring the other employer’s workers are not uncommon. Indeed, the New York State Attorney General is investigating certain healthcare employers under this theory of violations. Employers should speak with counsel before entertaining or entering into these types of agreements, whether they are written or unwritten agreements.