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20 Corporate Woods Blvd.

2nd Floor
Albany, NY 12211
(P) 518.463.1118
(F) 518.463.1606

October 14, 2015

Susan Bayerl
People Home Health Services
Mary Winters
Executive Vice Chairperson
James Rolla
People Care, Inc.
Richard Schaefer
Better Home Health Care Agency
Secretary and Long Island Chapter
Annette Horvath
All Metro Health Care
Vice Chairperson, LHCSA
Kenrick Cort
Tri-Borough Home Care
Vice Chairperson, CHHA
Sandra Lyons-Jackson
Companion Care of Rochester
Finger Lakes Chapter President
Iris Cognevich
BAYADA Home Health Care
Hudson Valley Chapter President
Amy Thomas
Best Choice Home Health Care
New York City Chapter President
Debra Obenhoff
Home Helpers and Direct Link
Northeastern New York Chapter
Patricia Dwyer
Health Force
Western New York Chapter President
Gary Carpenter
Associate/Allied Representative
Sheila Rabideau
Home Health Services of Westchester
Jewish Community Services
CHC Chairperson
Andrea Brown
Progressive Home Health Services
Public Policy & Government Relations
Committee Chair
Bader Reynolds
Immediate Past Chair

The Honorable Andrew M. Cuomo

Governor of New York State
Executive Chambers
NYS State Capitol Building
Albany, NY 12224
Dear Governor Cuomo:
On behalf of the members of the New York State Association of Health
Care Providers, Inc. (HCP) and the tens of thousands of homebound
clients we serve, I am writing to inform you of the serious negative
consequences that the recent changes to the Fair Labor Standard Act
(FLSA) rules regarding overtime pay and other current and pending
wage pressures and policies will have on the provision of home care
services in New York unless the State takes immediate action to
provide temporary and long-term relief to the home care industry.
Absent quick and significant financial assistance by the State, a home
care industry already in crisis by Wage Parity requirements, severe
payment delays from managed care plans, double digit Workers
Compensation increases and a mercurial pace of reforms, will be
confronted with unacceptable risks to our primary mission: the
community-based care of our frail, elderly, and disabled patients.
On October 13, changes to the FLSA companionship rule went into
effect requiring home health aides and personal care aides to be paid
overtime rates based on time and a half their regular rate of pay rather
than the State minimum wage. Home care agencies have received no
additional support, either through the State or through managed care
organizations, to cover the additional expenses of complying with the
new FLSA rule.
The new Federal overtime rule brings new urgency to the need to
comprehensively address the financial challenges facing New Yorks
home care agencies, particularly providers of long term care. These
services are now primarily funded through Medicaid Managed Long
Term Care (MLTC) plans. The increased overtime costs far exceed the
current level of reimbursement that home care agencies are operating
under, and there have been no guarantees from the New York State
Department of Health (DOH) or the MLTC plans that providers will
be reimbursed at rates that will permit them to meet the new overtime
costs required under the law.

Faced with mounting financial pressures due to rising costs and inadequate reimbursements,
many of our members have responded to the rule change by reducing their overtime as advised
to do by the MLTC plans, despite the significant disruption it will cause for both their patients
and their aides. However, due to the nature of home care, some amount of overtime will be
unavoidable, and many agencies, particularly in rural areas, will have no choice but to continue
paying overtime to their existing aides because they cannot recruit additional staff to handle the
additional hours. Many agencies are also limiting their availability to accept new 24-hour livein cases, despite the demand for these services, because of the overtime implications.
New Yorks home care industry cannot continue to absorb these increased costs without
commensurate reimbursement by Medicaid, managed care organizations, or other payers. We
are facing a tidal wave of financial and regulatory challenges that threaten the stability of the
industry and, ultimately, continued patient access to home care services. In addition to increased
overtime costs, these include scheduled increases to the State minimum wage, Home Care
Worker Wage Parity increases in New York City, Westchester, Nassau and Suffolk Counties,
steeply rising Workers Compensation rates, new Federally-mandated health insurance
requirements, and other unfunded wage and benefit mandates. Proposals to increase the States
minimum wage to $15 and additional overtime increases if a number of State lower court
decisions on overtime are upheld would jeopardize the entire home care industry unless
increased funding is put into the system.
At the same time, home care agencies are struggling to navigate a complex and rapidly evolving
health care delivery system that, to date, has not yielded benefits to the industry. The transition
to managed care has been fraught with challenges that have still largely remained unaddressed.
Consequently, agencies are experiencing significant cash flow deficits due to delayed
reimbursements, inadequate payment rates, system inefficiencies, and failure to be reimbursed
for services rendered. Rate cuts at both the Federal and State levels have removed even more
funding from the system. Compounding the problem, the transition to managed care has
dramatically increased administrative burdens on home care agencies; regulatory streamlining
is needed to reduce system inefficiencies and keep pace with the changes in the health care
delivery system.
Home care is a critical component of the States health care system, and is widely recognized
as the most cost-efficient and patient-preferred method of care delivery.
We urge you to take the following actions to ensure that there continues to be a robust
network of providers across the State available to meet the growing demand for long term
home care services in New York:
1) Immediately establish a transitional funding pool to reimburse home care agencies for the
costs associated with the new FLSA overtime rule and to ensure continuity of care for elderly,
disabled, and chronically-ill clients;
2) Ensure that there is adequate funding flowing into the States Medicaid managed care
system and ultimately to home care providers to cover the cost of compliance with all State
and Federal wage and hour requirements;
3) Require that managed long term care plans promptly and adequately reimburse home
care agencies for services rendered, and work to resolve costly system inefficiencies.

Due to limited data availability for long term care services, it is difficult to quantify the additional
costs of complying with the FLSA overtime rule and the upcoming increases in the State
minimum wage and Wage Parity, but HCP estimates that it will be hundreds of millions of
dollars. This does not include other costs borne by the industry, such as sharply escalating
Workers Compensation rates projected to increase nearly 30% this year - and the impact of
potential further minimum wage increases to $15 an hour. Nor does it include infrastructure
investments needed to effectively participate in new and evolving health care delivery and
payment models, such as the Delivery System Reform Incentive Payment (DSRIP) program and
value-based purchasing (VBP). HCP is working to identify these costs through member surveys
and will continue to assist the State in its data collection efforts.
In conclusion, the future of the home care industry in New York has never been more
precarious. Without immediate attention to infuse adequate funding into the system, there could
be devastating consequences for patients continuity of care and access to care for hundreds of
thousands of New Yorkers across the State. In order to ensure that home and community-based
care is able to play the integral role envisioned for it in the health care transformations that are
currently being developed, the State must significantly increase its investment now.
We look forward to working with you and your Administration to address these critically
important issues.

Claudia J. Hammar
Jim Malatras, N.Y.S. Director of State Operations
Paul Francis, N.Y.S. Deputy Secretary for Health
Howard Zucker, MD, Commissioner, N.Y.S. Department of Health (NYSDOH)
Jason Helgerson, Deputy Commissioner and Medicaid Director, NYSDOH
U.S. Senator Chuck Schumer
U.S. Senator Kristin Gillibrand
N.Y.S. Senate Majority Leader John Flanagan
N.Y.S. Assembly Speaker Carl Heastie
N.Y.S. Senator Kemp Hannon, Chair Senate Health Committee
N.Y.S. Assembly Member Dick Gottfried, Chair, Assembly Health Committee