State Announces PPL as SFI.  What’s Next?

Fiscal intermediaries that applied to be a statewide fiscal intermediary (“SFI”) arrived to work on Monday to find email notifications from the New York State Department of Health (“DOH”), disqualifying their application for the single SFI. Over the course of the day, an ANNOUNCEMENT was published by the New York State Governor’s office, announcing PPL as the winner of the State’s consumer directed RFP process. The Governor’s announcement came as no surprise to a number of insiders who had heard, for months, that PPL would be receiving the SFI contract.

Aside from announcing PPL as the winner of the SFI award, the Governor’s announcement contains a number of other important points:

  1. The Governor emphasized that the transition process will take months that would “take effect by mid-2025.” This should provide assurances to the fiscal intermediaries who are understandably very concerned about their business viability over the next few weeks.
  2. The announcement identifies four large and long-standing fiscal intermediaries that have been selected as “Four Core Regional Home Care Partners.” It is unclear what part of the single statewide fiscal intermediary law actually creates this “regional partner” structure.
  3. The announcement also references that the RFP involves a “a diverse alliance of more than 30 regional partners that will strengthen” the CDPAP program.” These agencies are “currently active in New York’s CDPAP who provide a wide array of multilingual, culturally sensitive care to communities across the State. The list of additional agencies participating in this strategic partnership alliance will be announced in the near future.” Presumably, these 30 “regional partners” are the subcontractors that meet the January 1, 2012 fiscal intermediary operations requirements under the law, but that point is not clear. The subcontractors were not to be selected by the State but rather by the SFI. Yet, the Governor’s announcement refers to these entities as if the State has selected them. Thus, it is unclear what the statutory authority is for the State to select these additional agencies.
  4. The Governor’s announcement then highlights that State officials and partners will “now begin a comprehensive transition process focused on ensuring communication, dialogue and support for CDPAP home care users and caregivers. This transition process will continue throughout the coming months and will ensure home care users and caregivers are protected before the new statewide partnership takes effect. This process will include:

    • Direct in-person and virtual meetings with home care users and caregivers throughout the State.
    • Coordination with disability and senior advocacy groups.
    • Open dialogue with elected officials across the State.
    • Ongoing review by State officials to ensure the needs of home care users and caregivers are thoroughly addressed before the new statewide partnership takes effect.
    • Additionally, PPL highlighted that the new statewide partnership will include a robust, multilingual, accessible communications plan that is focused on print, digital and social media content to ensure that home care users and their families understand the CDPAP services available to them and make it easy for home care users to choose the appropriate caregiver for addressing their needs.”

It is expected that yesterday’s announcement concerning consumer direct will now set off a renewed campaign to “convert” personal assistant workers into licensed personal care aides or home health aides (“PCA” or “HHA,” respectively).

As noted on our webinar, an agency needs to be licensed as a LHCSA before it can provide the services and the family caregiver cannot be in a certain family relationship to the patient/consumer. State regulations restrict what family members can provide care to another family member in the traditional LHCSA setting. Failure to adhere to these rules and limitations could result in New York State ordering the provider to refund all money billed for prohibited family care services under LHCSA.

Further, as discussed on the Poricanin Law webinar last week, ultimately, the consumer has freedom of choice as to whether to transition their personal services care into a LHCSA. Providers should be mindful of lawfully educating and offering the choice of care to the consumer. The DOH could ultimately seek to penalize providers who overstep boundaries in their zest to convert cases from CDPAP to LHCSA.

Providers wondering about their next steps should speak with their counsel. In addition to the SFI challenges that fiscal intermediaries are facing regarding the SFI, providers should not overlook the PMPM’s disastrous impact on the reimbursement rates of this program, potentially removing all incentives for providers to continue providing FI services. Therefore, even if the SFI was not going into effect, providers should re-evaluate the consumer direct business model from a financial standpoint and assess whether to convert cases, to the extent permitted, into a LHCSA.

Lastly, as a reminder to all providers, any contracts entered into with New York State, with the SFI, or any other entity that is providing services to the home care provider related to any transition matters or services, should be reviewed by counsel to ensure compliance with an array of healthcare laws but, also, business terms (e.g., noncompetition clauses, indemnification limits).

NYS DOH Delays Deadline for Submission of CDPAP RFP
All FIs are Encouraged to Apply

This morning, the New York State Department of Health announced that the deadline to submit an application for the Consumer Direct Personal Assistance RFP has been delayed until August 16, 2024 (the original deadline was August 2, 2024). In addition, the answers to questions are now expected to be released by August 2, 2024 (the original deadline for the release of these answers was July 19, 2024).

The prevalent counsel that has emerged for fiscal intermediaries related to this RFP is that all should apply. The reasons for doing so, however, should be carefully discussed with counsel, under attorney-client privilege. If Poricanin Law can offer any guidance in that regard, please let us know.

NLRB Moves Closer to Banning Use of Noncompetes and Other Restrictive Covenant Agreements

On May 30, 2023, the National Labor Relations Board (“NLRB”) General Counsel, Jennifer Abruzzo, issued a memo titled “Non-Compete Agreements that Violate the National Labor Relations Act.” The memo details how the NLRB views non-compete agreements between employers and employees and suggests that, generally, non-compete agreements violate employees’ rights under the NLRA. Importantly, a memo is not a decision, meaning there is no decision holding that a non-compete violates the NLRA.

By way of background, Section 7 of the NLRA protects employees’ rights, and it is an unfair labor practice “to interfere with, restrain, or coerce employees in the exercise” of rights guaranteed under Section 7. The NLRA applies to employees that are represented by a union, and those that are not represented by a union.

According to the memo, non-compete agreements violate the NLRA unless they are “narrowly tailored to address special circumstances justifying the infringement on employee rights.” The memo describes the following types of protected activities that non-compete agreements allegedly suppress:

  1. Concertedly threatening to resign for better conditions: Non-compete agreements can discourage employees from collectively threatening to quit as a negotiation tool for better working conditions due to fear of limited employment opportunities and potential legal consequences.
  2. Carrying out concerted resignations for better conditions: The agreements can discourage group resignations intended to improve working conditions, as employees might fear being unable to secure new employment due to the non-compete restriction.
  3. Seeking or accepting employment with a competitor: Non-compete agreements can deter employees from pursuing employment with local competitors to improve their working conditions, as this could potentially breach the agreement.
  4. Soliciting co-workers to work for a local competitor: Employees may fear inviting co-workers to join a local competitor due to the potential legal ramifications associated with breaches of non-compete agreements.
  5. Seeking employment to engage in protected activities: Non-compete agreements can discourage employees from seeking new jobs to engage in protected activities, like union organizing, at the new workplace, as the agreements limit their mobility and potential employment opportunities.

The potential implications of this memo could be vast. It suggests that employers should exercise caution when requiring non-compete agreements and that such agreements should be narrowly tailored to specific, valid business interests. It specifies that “a desire to avoid competition from a former employee is not a legitimate business interest that could support a special circumstances defense.” The memo could also potentially open the door for legal challenges against overbroad non-compete agreements.

Employers should review their template noncompetition agreements to ensure that they do not run afoul of the NLRB’s memo and, where appropriate, update and re-issue amended agreements to current employees.

Further Update on NY Healthcare Budget

Since our alert on the status of the healthcare (and home care) budget was issued, we have received more information about the wage (not benefit) changes to home care worker compensation. We’ve also received a significant influx of questions about the minimum wage, benefit, timeline, programmatic, and other implications of what is – to our best understanding – a very rough draft of the final budget language regarding the home care worker minimum wage and wage parity provisions. Although the ink has not even been run on this language (let alone dried), here’s a high-level overview of our current understanding of the numbers and the timeline for home care worker wages.

Although the ink has not even been run on this language (let alone dried), here’s a high-level overview of our current understanding of the numbers and the timeline for home care worker wages.

CMS Releases Guidance Regarding End of COVID Staff Vaccination Requirements and Other Protocols

The Centers for Medicare & Medicaid Services (CMS) released a new regulatory memo QSO-23-13-ALL entitled Guidance for Expiration of the COVID-19 Public Health Emergency (PHE) on May 11, 2023. The memo outlines each waiver CMS put into place during COVID-19 and how the end of the PHE will affect those waivers. Additionally, the memo outlines timelines for certain regulatory requirements issued through the PHE. This memo applies to Long Term Care, Intermediate Care Facilities, and other provider types.

NLRB Decision Restores Protection for “Worker Outbursts”

In a decision that will impact employers’ ability to enforce civility and professional conduct rules in the workplace, the National Labor Relations Board (“NLRB” or the “Board”) released a decision in Lion Elastomers LLC II, 372 NLRB No. 88 (2023), that has profound implications for both employers and employees. The underlying facts involved an employee who was disciplined and dismissed after a heated exchange with managers allegedly concerning working conditions. In its decision, the NLRB determined that the employee’s conduct was protected conduct and the Company was barred by the National Labor

Relations Act from taking adverse employment action against the employee on that basis. The result of the decision is that employees engaged in workplace activism and union-related activity will have significantly greater legal protection, even when such activism involves profane, harassing, or vulgar conduct. Employers contemplating disciplinary action will need to be mindful of yet another basis of “protected activity” in their analysis.

NYC Passes Law Prohibiting Employment Discrimination on the Basis of Height or Weight

On May 11, 2023, the New York City Council adopted a bill to amend the New York City Human Rights Law to include prohibitions on discrimination based on height and weight. This bill adds “height and weight” to the list of categories protected by Title 9 of the New York City Administrative Code, specifically to prohibit discrimination in connection with employment, housing, and access to public accommodations because of a person’s actual or perceived height or weight. Today, May 26, 2023, New York City Mayor Eric Adams signed the bill into law, announcing that “[n]o one should ever be discriminated against based on their height and weight.” The Bill will be effective 180 days from now, or November 22, 2023.

Of importance to employers, the law provides for exemptions (i.e., there is no prohibition on discrimination based on height or weight) where:

  1. Preferential treatment on the basis of height or weight is required by federal, state, or local law or regulation;
  2. An individual’s height or weight could prevent them from performing the essential functions of the job with or without an accommodation; or
  3. A certain height or weight is reasonably necessary for the normal operation of the business.

The Bill charges the New York City Commission on Human Rights with identifying particular jobs or job categories that fit into the above exceptions. Employers should update their employee handbooks (yet again) to account for these new protected characteristics and review any job descriptions that may be affected by these legal changes.

Update on NY Healthcare Budget: Implications on Home Care

Sections of the health care budget seem to be slowly being released as the Legislature and the Governor work feverishly to finalize the New York State budget this week. By all accounts in Albany, the New York State budget will be finalized by the end of this week.

We have received what appears to be a close-to-final summary of the Minimum Wage Act and Wage Parity Law amendments that would take effect upon the adoption of the final budget. As relevant to our readers, this document indicates that the Budget would amend the law to provide the following:

  1. The home care worker wage parity hourly amounts of $3.22 and $4.09 would be reduced by $1.55 effective as of January 1, 2024. This would result in a New York City wage parity rate of $2.54 (instead of $4.09) and the Long Island/Westchester rate of $1.67 (instead of $3.22). If this is indeed the final budget language, we expect that this will not only reduce the wages of those workers who receive their wage parity as a wage (instead of a benefit), but that the plans will also reduce their reimbursements. It remains to be seen whether any such reduction will be by $1.55 or $1.55+overhead. Providers are advised to very carefully implement any wage reductions; the New York Labor Law governs (with strict penalties for noncompliance) the process of reducing wages or changing benefits.
  2. The $1.00 minimum wage increase that is scheduled for October 1, 2023 would be postponed to January 1, 2024. The new law would also cap the minimum wage of home care workers at the general minimum wage + $3.00.
  3. The law would be amended to allow the Department of Health greater authority to collect information from payers and providers about the wages and benefits being paid to home care workers. The owners of agencies would need to certify that the payroll records they are providing to the Department are “true,” under penalty of perjury. Failure to make such payroll records available may result in immediate suspension of the agency from Medicaid (including MLTC Medicaid), and the Department of Health will be empowered to direct MLTCs to suspend any payments to the provider.
  4. The law would be amended to allow the Department of Health greater oversight over managed care organizations, including the contracted rates of payments between such plans and the providers. The stated intent of this amendment is to provide for greater transparency and better enforcement of wage violations. This amendment could also open the door to providers making more kickback-type complaints against plans related to rate-setting between plans and providers.
  5. The Verification Organization program would be void and replaced by EVV.

We do not yet have access to the other parts of the Budget that are being discussed, such as the potential repeal or amendment of the CDPAP RFO. We will provide an update as more information becomes available.

Home Care Employers Take Note “Sweat Bill” Moves Closer to Becoming Law

The SWEAT Bill (full text available here) is yet another well-intentioned but completely unnecessary anti-business piece of legislation that has been resurrected and gained traction with the New York Legislature in the last few days. As the legislative session is wrapping up this week, employee advocacy groups are working diligently in the last few days to ensure that this bill becomes a law. Employers that are in industries that are susceptible to wage claims, such as employers in the home care industry, should contact their local elected officials immediately to object to this bill becoming law.

As we had reported previously when this law was originally introduced several years ago (and, thankfully, had stalled in the Legislature since that time), the SWEAT Bill would allow alleged “victims” of wage theft to obtain a temporary lien against their employer’s (or alleged employer’s) assets upon the filing of a “wage claim.” (The term “wage claim” is not defined in the law and, thus it is unclear if a lawsuit has to be filed in order for the law’s provisions to be triggered, or whether a complaint to the Department of Labor would suffice).  In other words, a current or former employee could file a claim against their employer (or former employer) and immediately place a lien on that employer’s personal and real property. The problematic part of this bill is that it allows an employee to secure the lien without having prove any wrongdoing or error by the employer. The lien, once filed, would be in the amount of the alleged claim (which could be a class claim), plus liquidated damages. In effect, the employee lien could prevent an employer (or alleged employer in cases of fiscal intermediaries) from conveying, selling or transferring real or personal property while the employee lien is in place. The lien could impede a business’s attempts to sell the business or secure financing.

If the SWEAT bill is passed, employees and their attorneys will have significant new leverage to elicit, through threatened litigation or claims, favorable wage and hour payouts from employers. Employers, facing the prospect of expensive litigation and a lien, would be pressured into settling even the most meritless of claims. 

The SWEAT Bill was previously vetoed by Governor Cuomo. Perhaps the same fate will follow the bill with Governor Hochul, but no employer should sit idly by given the potential ramifications of this law. We encourage all our readers to contact their lobbyists, associations or attorney and the legislative officials directly to object to this bill becoming a law.