The healthcare industry is inundated with complex regulations and laws that most industries don’t have to navigate. But as executives and compliance officers dig their heels deep into ICD-10, Meaningful Use, HIPAA and other healthcare-specific regulations, the employee payroll – business’ great common denominator – still can’t be overshadowed. In this guest post, Keith Dennen, a member attorney with a full-service law firm, reviews two rules that’ll affect providers’ bottom line.
Employment law and rules governing employees’ provisioning of services respective to the healthcare industry has been rapidly changing in recent months, and it has real bottom-line implications for providers. Two notable changes have come from the Department of Labor (DOL) and the Department of Justice (DOJ). Both changes could require healthcare providers to address their current business structure and set protocols in place in order to prevent potential law suits, fines or other sanctions.
DOJ’s call for expanded equal treatment
This May, the DOJ issued its final rule for changes to the nondiscrimination provision – or Section 1557 – of the Affordable Care Act (ACA). Section 1557 expressly prohibits discrimination on the basis of race, color, national origin, sex, age or disability in the provision of services for any health program or activity that receives Federal financial assistance. To note, Medicare Part B payments are not “Federal financial assistance,” but any other payments received from the federal government may be deemed Federal financial assistance.
But the new rule takes nondiscrimination further still, recognizing four new bases of discrimination:
- Sexual stereotyping. Healthcare providers can’t discriminate because a person doesn’t fit pre-conceived gender notions, such as voice, dress, mannerisms, etc.
- Gender identification. An individual can’t be discriminated against because of his or her internal sense of gender, which may be different than the sex assigned at birth.
- Association. Healthcare providers cannot discriminate because a person is associated with a person of a protected class.
- Limited English proficiency. An individual cannot be denied service because he or she is not proficient in the English language.
The limited English proficiency protection will likely be most challenging for providers, as compliance may come with added financial burden. Turning a patient away, even because of an inability to communicate, can now be considered discrimination. Providers will now need to have translators available and ready to handle situations where communication barriers exist.
Compliance with the other three protected classes will not be as financially strenuous. However, healthcare employers shouldn’t assume that any of these discriminatory acts will be organically avoided. Employers should adjust employee handbook policies to include the new protected classes, and consider training staff and management on how to identify and prevent potential discrimination.
DOL’s expansion of overtime pay
The DOL recent expansion of overtime pay exemptions will also have a significant impact on providers and the management of their employees. This May, the DOL issued its final rule updating the requirements for employees to qualify for exemption from the overtime requirements outlined under the Fair Labor Standards Act (FLSA).
Under the new rule – which goes into effect Dec. 1, 2016 – in order for employees to qualify for the executive, administrative or professional exemptions, they will need to make $47,476 annually or $913 per week. That’s more than double the current threshold of $23,600 per year, or $455 per week for salaried employees. And beginning in January of 2020, that salary level will automatically be adjusted every three years to the 40th percentile of full-time salaried workers in the lowest-wage Census region (currently, the South).
As a result, providers could face a dramatic change in overtime payouts, particularly with support and operational staff like receptionists, office/practice managers, billing specialists and others who don’t directly care for patients.
To mitigate this, providers should perform a diagnostic overview of what their overtime costs look like under the new rule, taking into account employees who may currently be exempt but make less than $47,476 a year. The comprehensive audit will provide the information necessary to determine if any adjustments to work schedules or staffing are needed to keep operations financially sustainable and profitable.
It will also be important for providers to implement and consistently use time tracking tools. Whether by using software or employing a third-party service, providers will need an accurate account of all hours spent working – whether in the office or remotely – so that overtime pay is appropriately distributed. Such tools will also provide formal records of hours worked. Should there be any type of overtime dispute or lawsuit, providers will have objective evidence at their fingertips.
Proactively aligning health care business strategy to comply with new laws and regulations is one of the best ways to ensure that employees and patients don’t pursue litigation. After all, the most cost-effective lawsuit is one that never needs to be filed in the first place.
Keith Dennen is a member attorney with the Nashville office of Dickinson Wright, PLLC. He focuses his practice on employment and healthcare law.