Letter to OMB about the Companionship Exemption

March 19, 2013

Brenda Aguilar
Office of Information and Regulatory Affairs
Office of Management and Budget
New Executive Office Building, Room 10235
725 13th Street, N.W.
Washington, DC 20503

RE:     OMB Review of Department of Labor’s Proposed Changes to the Application of the Fair Labor Standards Act to Domestic Service, RIN 1235-AA05

Dear Ms. Aguilar:

Thank you for meeting with the National Council on Disability (NCD) and members of the disability and aging communities on March 15, 2013, to discuss the Department of Labor’s (DOL) proposed changes to the Companionship Exemption to overtime compensation under the Fair Labor Standards Act. The complexity of this issue is reflected in the extensive time that DOL, your office, and others have spent crafting and reviewing the proposed rule and the many opinions expressed to guarantee that consistent and fair standards of pay are ensured for the growing industry of companion and service provider caregivers. There is a clear concern expressed by consumers that the proposed rule will create changes that have a significantly adverse impact on the community of Americans with disabilities and seniors that rely on such services. Therefore, NCD urges OMB to require DOL to engage in further research and negotiation in order to fairly balance the complex needs of both the service providers and the disability and aging communities.

Our nation has a longstanding commitment to ensuring that individuals are afforded the opportunity live in the community with the appropriate supports, while addressing the growing costs associated with long-term service and supports. NCD acknowledged the many complex issues in its report, “The State of 21st Century Long-Term Services and Supports: Financing and Systems Reform for Americans with Disabilities”:

NCD believes that America needs a coherent and comprehensive framework for its LTSS policies, programs, and funding based on five interrelated assumptions. First, that people who are elderly and people with disabilities both desire and deserve choices when seeking assistance with daily living that maintains their self-determination and maximum dignity and independence. Second, the current financing mechanisms (public and private) will become unsustainable in the near future without significant reform. The system must be affordable to all Americans regardless of income levels and must consider opportunities to leverage public and private support in new ways without impoverishing beneficiaries. Third, there is an opportunity with the changing demographic picture of the United States to explore the possibilities of a universal approach to the design and financing of supports that is responsive to individuals under the age of 65, as well as Americans over 65 who may or may not have disabilities, without sacrificing individual choice and flexibility. Fourth, formal and informal caregiving must be sustained, including examination of family needs and workforce recruitment and retention challenges. Fifth, the approach to quality must examine consumer direction and control of resources in addition to traditional external quality assurance mechanisms.[[i]](https://ncd.gov/publications/2013/03192013/#fn1)

Consumer Concerns

NCD was alerted to the possible problematic impact of the proposed changes in July 2012, after stakeholders in the disability and aging communities came to NCD with their concerns. In August 2012, NCD met with DOL officials to discuss the concerns of the disability and aging communities. Subsequently, in October 2012, NCD requested that DOL engage in further dialogue with stakeholders, preferably through negotiated rulemaking, before proceeding further with the rulemaking process. 

NCD held a roundtable discussion on January 30, 2013 which included more than thirty-five representatives from diverse perspectives on DOL’s proposed changes. The disability and aging communities identified a number of concerns, including:

• affordability for people with disabilities and elders, particularly those who private pay, and the unintended impact of increased institutionalization;
• impact on publicly-funded programs and their inability to pay overtime;
• unique and informal nature of workers, many of whom are family or friends;
• unintended consequence of Medicaid agencies needing to limit the availability of home and community based services in order to comply with the proposed changes;
• DOL’s 20 percent threshold and the need to delineate between professional providers and informal caregivers;
• proposed administrative requirements that will likely be difficult for people with disabilities and seniors to execute and administer;
• detrimental impact on the need for continuity of care;
• negative effects on live-in caregivers;
• negative impact on workers who will likely see a reduction in wages and may need to obtain additional jobs;
• increased risk of institutionalization as recognized in the DOL NPRM;
• increasing the cost of home and community based services without increasing the Medicaid rates or raising the Medicaid caps for available funding, resulting in a reduction of personal assistance, which could force people with significant disabilities to go without services or be forced into an institution;
• Medicaid programs that differ widely from state to state; the significant differences between the homecare system and consumer-directed programs; and
• potential negative impact on individualized supports currently available to adults with intellectual or developmental disabilities living within the community.

20 Percent Threshold

To follow up on our discussion regarding the proposed 20 percent threshold, NCD provides the following concerns regarding its potential detrimental impact if adopted. In most state Medicaid programs, caregivers are not typically career attendants; rather, they are usually family members and friends who are willing to help the individual who is in need of care. The disability and aging communities are concerned that the new definition of companionship services, especially the types of services that would be considered “incidental” and therefore limited to 20 percent of the caregiver’s time, would reduce the availability of family and friend caregivers, increase the strain on state home care systems, and threaten the consumer’s choice of provider. While we recognize DOL’s view that tasks more aligned with “homemaking duties” are not intended to be the primary functions of a companion, such services are, nevertheless, central to the provision of “fellowship and protection.” In fact, many of the services described by DOL as “incidental,” or even entirely excluded from companionship support, are the very ones a family member or informal caregiver might need to provide. That is, family and friends who function as paid caregivers routinely perform tasks such as dressing, grooming, toileting, feeding, doing the laundry, bathing, wound care, injections, blood pressure testing, and turning and repositioning. Additionally, contrary to DOL’s assertion, many of these personal care or health related services do not require “specialized training.” Many of the proposed “incidental services” are integral to the delivery of effective companionship services. DOL’s proposal to categorize and limit allowable services according to type of task is too restrictive and insufficiently captures the distinction between professional and nonprofessional caregivers. Therefore, NCD recommends that DOL work closely with Centers for Medicare & Medicaid Services (CMS), state agencies, providers, consumers and other stakeholders to further define the types of arrangements that may involve companions and non-professional caregivers, to ensure that the final rules do not jeopardize these valuable practices.

Concern has also been raised that the administrative burden related to the implementation and oversight of these provisions may prove to be excessive and ineffective. Consumers have said that as written, the rule would impose burdensome record-keeping requirements on the individual receiving services, the caregiver providing services, and the state funding and overseeing the quality of these services. Such an approach would be nearly impossible to administer, and quality assurance concerns could deter states from funding service arrangements that comport with the revised standards. NCD shares the concern that the rule’s administrative reporting requirements and thresholds for companions and live-in caregivers may be impractical to execute and administer. Accordingly, NCD recommends that DOL revise its approach for establishing a 20 percent threshold for “incidental services” in such a way that will reduce the administrative burden and more accurately reflect a holistic approach to addressing the needs of the disability and aging communities.

Further Engagement with the Disability and Aging Communities

NCD urges OMB and DOL engage in further discussion with stakeholders within the disability and aging communities before proceeding with the final steps of the proposed rulemaking process. NCD recommends the use of a negotiated rulemaking process to create further opportunities for direct dialogue with the disability and aging communities through the remainder of the drafting process, or proposing alternate means for continued engagement by the disability and the care providing communities to reach a balanced and equitable rule that respects and reflects the needs and entitlements of both communities. The serious concerns that have been voiced indicate that further dialogue between DOL, care providers, and the disability and aging communities over the impact of these proposed rules will help reduce or eliminate confusion or misconstruction, and the availability and deep commitment and interest of these communities suggests that further engagement will benefit everyone.

There is clear precedent for negotiated rulemaking, or further consideration and input from stakeholders and experts at this time. Federal agencies regularly utilize negotiated rulemaking process. The NCD is available to assist in identification of experts and stakeholders who could help formulate guidance and elements of the proposed rule in concerted negotiation with care servers and other providers. We are readily available to support the DOL in continuing its engagement with the disability and aging communities to eliminate confusion about the potential impact of the rule, and possibly expand this analysis prior to taking final action on the proposed rule. 

The disability and aging communities have specific information that which should become a formative part of the final rule. Consolidated sources of data on state consumer-directed programs have been published and are available, and can be accessed through contact with the National Council on Independent Living, ADAPT, and the Center for Personal Assistance Services. The government directed research and expert comment on this issue is also available from the Department of Health and Human Services and NCD. We would be delighted to assist in transmittal and consideration of the materials.

Conclusion

More work is necessary for the formulation and implementation of a solution that respects and fairly compensates personal care providers, while ensuring that supports and services for Americans with disabilities continue with efficiency, ease of access, and compassionate respect for personal dignity. NCD will continue to facilitate opportunities for further dialogue on the impact of these proposed rules and how they could be constructed to minimize the negative impact on people with disabilities and consumer directed personal assistance services. NCD encourages further consideration of research, consultation with experts, and facilitated discussion among all interested parties in order to ensure a clear, balanced and responsive solution to the issues justly addressed by the rule-making inquiry.  

Thank you for your ongoing attention to this issue.  Please do not hesitate to contact NCD through Joan Durocher, its General Counsel & Director of Policy, at (202) 272-2117 or jdurocher@ncd.gov if we may be of any further assistance. 

Respectfully,

Jeff Rosen
Chairperson

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[i] National Council on Disability, “The State of 21st Century Long-Term Services and Supports: Financing and Systems Reform for Americans with Disabilities,” December 2005, available at /publications/2005/12152005.