Reflecting on the past year, the home care industry faced a few major changes that will influence providers in 2016. One of the biggest changes was the Supreme Court ruling in August, which reinstated regulations on home care agencies and removed the “companion exemption” for caregivers. Providers are now required by law to offer overtime to all caregivers. This change came as a bit of a blow to many home care providers, who were hoping for a different outcome and now find themselves scrambling to prepare their agencies for the effects of the new law.
Last month, Home Care Pulse sent out an industry survey to gauge the impact of the Companion Exemption Removal Act on their agencies, and we were pleased to receive a considerable response from 444 providers. Our survey started by asking providers to rate the impact of the act on a scale from Highly Positive to Highly Negative, and the results may not surprise you. 62% of providers said the act would have a negative or highly negative impact (29.8% of them rated it as highly negative), and only 10.5% of providers, rated the impact as positive or highly positive. Providers have expressed concern about the strong influence the act may have on services and caregiver retention, especially in the coming year, and they have begun searching for and implementing changes to accommodate the shift.
In our survey, the top 3 expected actions by providers in response to the Companion Exemption Removal Act were 1) cutting caregiver hours (67.8%), 2) rescheduling to avoid paying overtime (55.5%), and 3) raising fees to cover added costs (50.2%). Those who plan to raise fees expect to increase their rates, on average, by $1.50 for hourly and $55 a day for live-in care. Other solutions included cutting back on live-in cases, sharing caregivers with competition, etc. The solutions vary across regions and agencies, but as providers approach the start of 2016, they need to develop detailed plans of how they’ll implement these changes in the upcoming year. The good news is that the majority of providers in certain regions, particularly the Pacific area (California, Oregon, Washington, etc.), were paying caregiver overtime prior to when the ruling came into effect on October 13th, and they will not experience major effects from the change. In contrast, approx. 79% of agencies in the Southern states region were not paying overtime prior to October 13th, and they may be behind in their preparations to comply with the new ruling.
There were many other takeaways from our latest industry survey on this subject that we’d love to share with you. To view other data points from the survey, you can download the full report from our online resource library or directly from your VANTAGE account. If you participated in the survey, you should have received a copy; if not, please let a member of my team know. As December begins, now is a great time to sit down with your team to review this data and to discuss necessary changes in your agency for the upcoming year.
Aaron Marcum, Founder & CEO