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.