In July, the Centers for Medicare and Medicaid Services (CMS) published an informational bulletin discussing the effect of recent regulations about wages paid for domestic workers assisting people with disabilities. Under the new regulations, workers who provide companionship and live-in domestic service workers will no longer be subject to exceptions from minimum wage and overtime laws if they are either employed by the state or jointly employed by the state and the individual receiving services. The new regulations also limit the exemption from overtime laws for “companionship services” even when the individual receiving services is the sole employer. The new CMS guidance provides advice to states on how to allocate overtime and travel time costs across Medicaid beneficiaries.
The new regulations may pose a challenge for workers with disabilities who rely on these kinds of services in order to remain in their homes and retain integrated employment. Medicaid programs will be required to pay overtime wages and pay for time spent in certain types of travel for many workers who had previously been considered exempt from such requirements. CMS acknowledged that many states, to avoid budgetary shortfalls, may seek to “limit the use of overtime or to minimize the need for compensable travel between beneficiaries.” These limitations may limit the ability of individuals with disabilities to stay in their homes with their preferred workers. The guidance clarifies that, if states do seek to limit travel and overtime costs, they must develop strategies—such as exceptions in the case of worker shortages or emergency situations—that minimize impact on beneficiaries.
The new guidance also addresses scenarios in which states must allocate travel and overtime costs across multiple beneficiaries, especially in situations when the beneficiaries opt to “self-direct” services using a set budget. For example, when a worker provides five hours of services for one beneficiary, then travels one hour and provides four hours of services to another beneficiary, five days per week, this worker would incur five hours of travel time and five hours of overtime per week. Because these costs cannot be considered administrative costs under the Medicaid program, they must be allocated as the costs of delivering services to beneficiaries. Nevertheless, because neither beneficiary can be held responsible for the distance that the worker has to travel between them or the hours that the worker spends with the other beneficiary, CMS “strongly urges” states not to deduct these added costs from individuals’ self-directed services budgets. Rather, states should allocate these costs across all individuals served by the “joint employer” (in this case, the state) without deducting them from selfdirected services budgets. States may use monthly service fees or other separate fees, separate from self-directed budgets, to allocate these costs across beneficiaries.