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Judge Blocks Minimum Wage, Overtime Rule For Medicaid In-Home Caregivers

A federal judge on Wednesday blocked implementation of a U.S. Department of Labor regulation that would have required state Medicaid programs to pay in-home care workers minimum wage and overtime.

“The judge vacated the regulation,” said Mike Oxford, executive director at the Topeka Independent Living Resource Center, a nonprofit program that helps arrange in-home services for people with physical disabilities. “That means he threw the whole thing out. It’s gone.”

The ruling by U.S. District Judge Richard Leon in Washington, D.C., upheld a 40-year-old provision in the Fair Labor Standards Act that allows some care workers to be paid less than minimum wage.

“This is a very good thing for Kansas,” Oxford said. “If the regulation had gone into effect like it was supposed to on Jan. 1, the state would have been in violation of the Fair Labor Standards Act, and every provider would have been exposed to lawsuits for overtime, double overtime, back pay and economic damages.”

The ruling, he said, in no way endorsed low wages for workers who care for the state’s frail elders and for people with disabilities.

“That’s not what this is about,” Oxford said. “This was about legislative process and how the Department of Labor went about doing what it did.”

In Kansas, he said, most attendant care workers are paid between $9.50 and $10 an hour — above the hourly minimum wage of $7.25. Most do not work more than 40 hours a week.

In August, Oxford and Kansas Department for Disability and Aging Services Secretary Kari Bruffett alerted legislators to the new rule’s potential for increasing costs and reducing access to Medicaid-funded services that help frail elders and people with disabilities live in community-based settings rather than in nursing homes.

At the time, Bruffett said the regulatory change could affect more than 10,700 Kansans receiving in-home services.

As many as 1,400 people, she said, could see reductions in sleep cycle support, a service that involves paying someone — often an adult family member — to stay with an individual who should not be left alone at night due to their disability or medical condition.

In Kansas, most sleep cycle support workers are paid about $25 per six-hour night, which is less than minimum wage. Many of these workers are related to those they are caring for.

Angela de Rocha, a KDADS spokesperson, declined to comment on the ruling, noting that department officials had not had time to review the 12-page decision.

The decision came in a lawsuit filed by the Home Care Association of America, International Franchise Association and National Association for Home Care and Hospice. The associations accused the Department of Labor of disregarding rejection of similar legislation by Congress on several occasions in recent years.

Bruffett filed a six-page affidavit in support of the plaintiffs’ claims, saying the regulatory change would create a “landscape of uncertainty” and potentially “disrupt services and supports for thousands of our most vulnerable Kansans.”

Offsetting the projected increases in sleep cycle support costs, she said, would cost “more than $30 million in all funds, or $21,428 per consumer.”

Last month, Judge Leon ordered the Department of Labor to temporarily delay implementation of the new rule.

In the order, Leon was harshly critical of the Labor Department, characterizing the new rule as “nothing short of yet another thinly-veiled effort to do through regulation what could not be done through legislation.”

The Department of Labor, Oxford said, could appeal Leon’s latest ruling. “They have that option,” he said, “but for now we can continue to provide home and community-based services like we have in the past.”

Dave Ranney is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team.

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