Ask the Experts: Summary of the GAO Report: Observations on the Effects of the Home Care Rule

Through a partnership with Littler Mendelson P.C Labor & Employment Law Solutions, we are excited to share the “Ask the Experts” Article. Each week, we will feature a new question, from you our members, related to workplace issues and topics that will be answered from our experts and partners at Littler.

This week, our experts at Littler share a summary with us of the recent GAO report and the observations on the effects of the home care rule.

Thank you to our expert authors Angelo Spinola, Will Vail, and Elizabeth Barrera.

Summary of the GAO Report:
Observations on the Effects of the Home Care Rule

In 2013, the U.S. Department of Labor (DOL) revised its regulations on domestic service employment and companionship services under the Fair Labor Standards Act (FLSA).  The final rule, known as the Home Care Rule, extended minimum wage and overtime protections to most non-medical home care workers.  The DOL anticipated that the new rule would increase wages for caregivers by providing for overtime wages, reduce worker turnover and result in higher quality of care being delivered to the consumers of home care services.  After protracted litigation, the Home Care Rule became effective in November 2015.  

Several Members of Congress requested the Government Accountability Office (GAO) to examine the impact (if any) the Home Care Rule has had on workers and consumers of home care services.  The GAO interviewed 15 national-level organizations and analyzed national survey data on workers and consumers.  It also observed the impact of the COVID-19 pandemic on home care workers and the consumers of home care services.  On October 19, 2020, the GAO issued its report.  

Ultimately, the GOA found that the Home Care Rule has not increased caregiver wages and in some cases has resulted in consumers of home care services receiving fewer services.  For example, some states changed their Medicaid programs to limit home care workers’ hours to avoid overtime costs.  Some provider agencies discontinued programs that provided 24-hour or live-in care, as well as respite care.  These changes have caused additional stress on family caregivers.  Restricting work hours also has led to increased costs for recruitment, training, scheduling, and recordkeeping activities, such as tracking overtime hours and time spent traveling between clients.  

Little Positive Impact on Workers

Below is a summary of the GAO’s findings of the impact of the Home Care Rule on home care workers:

  • Home care workers saw a slight increase in the average number of hours typically worked (33 hours per week in 2010 to 34 hours in 2019).
  • There was an increase in the proportion of home care workers who reported working full-time hours (defined as 35+ hours per week) (49% in 2019 versus 38% in 2010).
  • Home care workers’ weekly pay did not meaningfully increase relative to workers with similar occupations ($352 per week in 2010 versus $400 in 2019, as compared to other industries: $347 per week in 2010 and $390 in 2019).
  • The number of home care workers working overtime did not change after implementation of the Home Care Rule (about 10%), but the number of overtime hours a home care worker worked did decrease following implementation (20 hours in 2010 to 17 hours in 2019).
  • Part-time home care workers may have benefited from hours redistributions. 
  • Home care workers are more likely to work for multiple consumers or third-party employers to maintain their pre-Home Care Rule hours (about 7% work for multiple employers).  Note, there was no change in the proportion of home care workers working for multiple employers following implementation.

Tremendous Negative Impact on Consumers

For consumers, the GAO found the Home Care Rule exacerbated the challenges in finding and hiring home care workers.  Where states or provider agencies have added hour restrictions to avoid incurring overtime costs, some consumers have hired additional workers to ensure their needs are covered.  In other instances, family or informal caregivers fill the gap.  And in still other situations, their needs go unmet.  Needless to say, continuity of care has been negatively impacted.  But, interestingly, the GAO found that there was an actual decrease in the number of individuals living in institutions from before to after the Home Care Rule was implemented.  

Final Observation

One final note, as the U.S. population ages and the demand grows for home care workers, employment in the industry is expected to increase nearly 40 percent in the next decade.  But even now, many home care organizations face continuing difficulty in finding workers.  The GAO report seems to make clear that the Home Care Rules limitations will have a negative impact on the ability of consumers to find the quality and quantity of caregivers needed.

 1. 52% of workers in occupations with similar entry requirements reported usually working full-time, an increase of 6% from 2010.  These similar occupations are: food preparation workers; combined food preparation and servicing workers, including fast food; waiters and waitresses; janitors and cleaners, except maids and housekeeping cleaners; maids and housekeeping cleaners; cashiers; retail salespersons; and stock clerks and order fillers.

About Littler 

At Littler, we understand that workplace issues can’t wait. With access to more than 1,500 employment attorneys in over 80 offices around the world, our clients don’t have to. We aim to go beyond best practices, creating solutions that help clients navigate a complex business world. With deep experience and resources that are local, everywhere, we are fully focused on your business. With a diverse team of the brightest minds, we foster a culture that celebrates original thinking. And with powerful proprietary technology, we disrupt the status quo – delivering groundbreaking innovation that prepares employers not just for what’s happening today, but for what’s likely to happen tomorrow. For over 75 years, our firm has harnessed these strengths to offer fresh perspectives on each matter we advise, litigate, mediate, and negotiate. Because at Littler, we’re fueled by ingenuity and inspired by you.

GAO Report: Home Care Rule Led to Difficulty Accessing Care, Not Higher Pay

The Home Care Rule, created by the Department of Labor in 2015 to extend wage and overtime provisions to home care workers, resulted in patient difficulty accessing care, the end of some services, and limits on working hours for home care aides, but did not result in higher pay for those workers, according to a…

GAO Report Examines Hospice Disposal of Controlled Substances

A new Government Accountability Office (GAO) report on disposal of controlled substances found substantial challenges for hospices, but also some key best practices that point the way toward new industry standards. According to the GAO report, challenges include the costs of certain disposal methods, a lack of a witness to the disposal process, and inconsistencies…

GAO Report Recommends CMS Receive More Authority to Enforce Safety Requirements on Hospice

GAO report compares non-profit and for-profit hospices In recent months several reports examining aspects of the Medicare hospice benefit have been issued by oversight bodies including the Health and Human Services’ Office of the Inspector General (OIG) (previous coverage available HERE and HERE).  Most recently (November 14, 2019), the Government Accountability Office (GAO) released a…

The Challenges States Face to Promote Advanced Care Planning

Efforts by the various states to promote advanced care planning vary widely in their techniques and success, often leading to confusion for patients and access problems for clinicians, according to a new study by the Government Accountability Office (GAO). An advance care directive is a written instruction recognized under state law and relating to the…

CMS Chief: Prior Authorization Needed to Fight “Fraud and Abuse”

CMS Administrator Seema Verma complained that the federal government needs more legal authority to conduct Medicare prior authorization reviews she says work well in the private sector during a speech to the America’s Health Insurance Plans 2018 National Conference on Medicare on Tuesday, October 16. Interestingly, according to a report from Inside Health Policy, Barbara…

GAO: State Medicaid Home-and-Community-Based Services Face Funding and Workforce Challenges

States struggle to provide home-and-community-based services through their Medicaid programs due to workforce issues related to low pay, the complex needs of many patients, and limited funds from state governments, according to a new report from the Government Accountability Office (GAO). All state Medicaid programs provide some financial support for long-term services and supports (LTSS)…

Report: Improvements Needed to Prevent Medicaid Managed Care Payment Risks

The Centers for Medicare & Medicaid (CMS) should require states to report and document the amount of overpayments by managed care organizations to providers in order to eliminate improper payments, according to a new study from the Government Accountability Office (GAO). Under this Medicaid model, states pay a set periodic amount to MCOs for each beneficiary and…

CMS Plans to Bring Back Pre-Claim Review

The Centers for Medicare & Medicaid Services (CMS) plans to bring back an altered version of the pre-claim review (PCR) demonstration that was halted at the end of March 2017 after it was revealed that it found mere paperwork errors instead of the fraud that it was intended to uncover, according to May 29 offer…

GAO Calls for CMS to Resume Prior Authorization Experiment

A new report from the Government Accountability Office (GAO) calls on the Centers for Medicare & Medicaid Services (CMS) to resume or extend prior authorization experiments that have either been halted or are due to end soon. CMS began using prior authorization programs in September 2012 to ensure Medicare coverage and payment rules were met…