National Provider Organization Files Amicus Brief in Supreme Court Medicaid Rate Case

Court Strikes Down New FLSA Regulation Limiting Exemption for Home-Care Workers
 

Dec. 23 - A federal judge Dec. 22 invalidated part of a Labor Department regulation requiring employers to pay most home-care workers minimum wages and overtime, striking down the provision 10 days before it was slated to take effect.

 

The U.S. District Court for the District of Columbia granted partial summary judgment to the Home Care Association of America and two other groups on claims that the DOL violated the Administrative Procedure Act in issuing as part of the regulation a provision that home-care workers employed by a third-party business are no longer exempt from the Fair Labor Standards Act's minimum wage and overtime requirements.

 

The court found that Congress didn't delegate to the department the authority to change the FLSA's statutory terms, which exempt "any employee" providing "companionship services" from the minimum wage and overtime requirements and exempt "live-in" domestic service providers for the overtime obligation.

 

The new DOL rule on home-care workers "essentially would eviscerate a Congressionally-mandated exemption via a method Congress never envisioned," Judge Leon wrote. He said U.S. Supreme Court precedent affirming current regulations "does not grant the Department judicial cover for what can only be characterized as a wholesale arrogation of Congress's authority in this area!"

 

Companionship Services Definition Change Remains

However, the court didn't invalidate a separate provision of the new regulation that updates the definition of "companionship services" to narrow the types of duties for which workers are exempt from the FLSA's minimum wage and overtime requirements. Leon said the DOL acted "appropriately" in filling a gap left by Congress with respect to the specific exempted activities.

 

Labor Department spokesman Jason Surbey told Bloomberg BNA Dec. 23 that the DOL "strongly disagrees with the district court's opinion." He added that the new definition of "companionship services" will go into effect as planned.

 

"As of January 1, 2015, one of the Final Rule's central changes, the revision of the outdated definition of 'companionship services,' will go into effect," Surbey told Bloomberg BNA. "All employers of home care workers, including third party employers, will be obligated to consider the duties such workers perform in evaluating whether they must pay wages in compliance with the minimum wage and overtime requirements."

 

ADDP Attorney Tara Zeltner is reviewing the decision and will have more analysis to share later this month. 

 

When:
Thursday, January 15, 2015
9:00 AM - 12:00 PM

Where:
Assumption College
Hagan Campus Center
500 Salisbury Street
Worcester, MA 01609

 Agenda:
Annual Report
DDS Commissioner Elin Howe Remarks
Nominating Committee Report

Presentation on Federal Regulations and Challenges Ahead
Katherine Berland
ANCOR Director of Governmental Affairs, Katherine Berland

Medicaid Rate Case Could Have Significant Impact

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On December 23, 2014, the American Network of Community Options and Resources (ANCOR) filed an amici curiae ("friends of the court") brief in the Supreme Court case Armstrong v. Exceptional Child Center, Inc. (Docket No. 14-15).   

   

The case has the potential to significantly impact state Medicaid programs nationwide if the Court rules that private providers have legal standing to hold states accountable to having adequate Medicaid rates.  

 

ANCOR was joined in the brief by the American Health Care Association/National Center for Assisted Living, the National Community Pharmacists Association, the American Pharmacists Association, and America's Essential Hospitals. The brief was prepared and filed by Joel Hamme, Esq., of Powers Pyles Sutter and Verville, P.C. 

 

The case was originated in Idaho by a group of Medicaid waiver residential habilitation providers who brought suit against the state challenging the adequacy of existing Medicaid rates.  

 

The providers argued that the state was aware that existing rates were not sufficient to provide services prescribed by the state Medicaid program, and brought action against the state when the state legislature did not appropriate necessary funding. At issue is whether a private party, in this case, providers, has the right to bring a private right of action against a state under the Supremacy Clause of the United States Constitution. The Supremacy Clause establishes that federal law generally takes precedence over state law. Medicaid is operated by states with federal oversight, requirements, and funding. The Supreme Court granted review of the case to consider whether the Supremacy Clause applies under these circumstances. 

 

"Ensuring that Medicaid programs are funded appropriately is essential to providing quality supports and services to people with significant disabilities," said Chris Sparks, President of ANCOR Board of Directors. "We hope this case will reinforce the importance of regularly reviewing rate adequacy and making periodic adjustments to meet people's needs."

 

In its brief, ANCOR argues that while the Supreme Court should affirm the lower court's determination that private parties do have a private right of action under the Supremacy Clause, the court could also come to the same conclusion by applying a Congressional mandate that requires that certain causes of action relating to Title XIX of the Social Security Act (which authorizes Medicaid) be considered using standards established before 1992.  

 

Barbara Merrill, Chief Executive Officer of ANCOR said, "ANCOR is pleased to have the opportunity to advocate for the right of providers to challenge inadequate rates within their state Medicaid system. We are encouraged that the Court has taken up this issue which will hugely impact millions of people that rely on Medicaid funding for essential services."

 

Amicus briefs are filed by interested parties who are not litigants in a case. More than a dozen amici briefs have been filed to date, representing dozens of interested parties. (A complete list with links to court documents, including amicus briefs filed, is available here.) In addition to provider and other stakeholder organizations, several Democratic members of the U.S. Congress filed an amici brief supporting the argument that Congress intended to preserve the private cause of action for parties who seek to enforce Medicaid's federal authority over state actions to the contrary.

 

The Supreme Court will hear oral arguments on the case on January 20, 2015. 

 

Legislative Luncheon Reminder

 

Tuesday, January 27, 2015
Massachusetts State House
Great Hall of Flags
11:30 a.m. to 1:00 p.m.
Rep. Jay Kaufman has been selected as the 2015 Legislator of the Year in recognition of his life long support for empowering people with disabilities to live full and productive lives, as well as his strong courage in understanding the link between revenue, supports and services and the compassionate priorities of the citizens of the Commonwealth.


RSVP:  Jackie Lynch 508-405-8000
ADDP 2015 Calendar with Legislator Birthdays to be distributed
Photographer will be present for legislator/constituent photographs