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Tags Posts tagged with "Proposed Rule"

Proposed Rule

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The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) published a proposed rule concerning the process and criteria used to determine a worker’s classification as an employee or an independent contractor under the Fair Labor Standards Act and related federal laws.

This proposed rule would rescind DOL’s 2024 Final Rule addressing the classification of independent contractors and replace it with an analysis for employee classification similar to the one adopted by DOL in 2021. The classification analysis in the proposed rule would:

  • Apply an “economic reality” test to determine whether a worker is in business for himself or herself as an independent contractor or is an employee economically dependent on an employer for work;
  • Identify and explain two “core factors” to help determine if a worker is economically dependent on an employer for work or in business for him- or herself:
    • The nature and degree of control over the work; and
    • The worker’s opportunity for profit or loss based on initiative and/or investment;
  • Identify other factors to help determine a worker’s status as an employee or independent contractor, including the amount of skill required for the work, degree of permanence of the working relationship, and whether the work is part of an integrated unit of production;
  • Advise that the actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible; and
  • Provide eight fact-specific examples applying the factors to real-life circumstances.

Last year, DOL published guidance advising WHD field staff on the analysis to apply when determining employee or independent contractor status. That guidance instructed agency investigators to stop applying the analysis from DOL’s 2024 rule in current enforcement matters but, instead, rely on the principles outlined in Field Assistance Bulletin No. 2025-1 and Fact Sheet #13.

The 2024 final rule prompted a number of federal lawsuits challenging its legality. As a result, DOL said last year that it would be “…reconsidering the 2024 Rule, including whether to rescind the regulation.”

DOL will be accepting comments on this proposed rule through 11:59 pm (ET) April 28, 2026.

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The Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2026 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems (OPPS/ASC) proposed rule in the July 17, 2025, Federal Register.

The rule outlines new proposed payment rates and related policies for a wide variety of Medicare providers, including not only physicians but other individual Medicare clinicians, such as physical and occupational therapists, speech-language pathologists, nurse practitioners, and physician assistants.

The proposed CY 2026 OPPS/ASC would implement a 2.4% increase to OPPS payment rates that reflects a market basket update of 3.2%, reduced by a productivity adjustment of 0.8 percentage points.

RCPA will provide a more detailed analysis of the OPPS/ASC proposed rule with a focus on the implications for rehabilitation providers. Additional information can be provided on this OPPS fact sheet.

Comments on the proposed rule are due by September 15, 2025. Members are encouraged to share comments and concerns to Melissa Dehoff by September 8, 2025, to include in RCPA’s comment letter.

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On July 14, the National MLTSS Health Plan Association submitted comments on the “Preserving Medicaid Funding for Vulnerable Population – Closing a Health Care-Related Tax Loophole” proposed rule. Per the Association:

This rule proposes to refine how CMS evaluates whether a health care-related tax is considered “generally redistributive.”

In our comments, we noted that we appreciate CMS’ efforts to strengthen the oversight and quality of Medicaid programs but raised concerns about the timelines and administrative burden on states, as well as the potential impact on individuals receiving long term-services and supports (LTSS).

The recommendations included:

  • Extending the transition period to three years for all states.
  • Providing clear implementation guidance and technical assistance to states.
  • Postponing finalization of the rule until further research and data analysis on provider-related taxes and impacts are conducted.

Read the full letter here.

In Pennsylvania, this rule would impact participants’ funding of approximately $1B in federal matching funds for HealthChoices, Community HealthChoices, and Behavioral HealthChoices. No immediate action is required. If you have any questions, contact Fady Sahhar.

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On July 2, the U.S. Department of Labor (DOL) took an important step to restore fairness and flexibility in the home care industry by issuing a proposed rule that would rescind restrictive provisions introduced in 2013 under the Obama administration. Those earlier changes, fully enforced in 2015, significantly narrowed the “companionship services” exemption under the Fair Labor Standards Act (FLSA), adding complex and costly wage requirements for home care agencies and Medicaid-funded services.

The 2013 rule redefined key terms, eliminated the exemption for third-party employers, and imposed overtime obligations on agency-employed direct care workers — contributing to increased costs and administrative burdens. These unintended consequences have strained both providers and public programs, particularly in Medicaid-funded home and community-based services (HCBS).

Now, DOL is proposing to correct course. In its justification, the Department noted that the previous regulations “might not reflect the best interpretation of the FLSA and might discourage essential companionship services by making these services more expensive.”

Why This Matters
This proposed rule is a welcome change for providers, participants, and state Medicaid leaders alike. Overtime costs are a major driver of financial pressure in long-term services and supports. When direct care workers live in the same home as the individuals they serve, current law allows participant-directed employers to avoid overtime pay. However, because of the 2013 changes, agency-employed workers doing the exact same job do not receive the same treatment — creating an inequitable and unsustainable two-tiered system.

If finalized, the proposed rule would allow third-party agency employers to once again access the same companionship exemption. This would create consistency across employer types and make it easier to recruit and retain direct care staff — particularly in shared living or live-in arrangements that are vital to participant independence and stability.

Act Now: Submit a Letter of Support
The DOL is accepting public comments on this proposed rule, and it is crucial that the provider community raise its voice. RCPA encourages home care agencies, managed care partners, and Medicaid stakeholders to submit letters of support highlighting how this change will:

  • Increase flexibility in service delivery;
  • Align federal and state wage policy;
  • Promote cost-effective care models;
  • Support direct care worker retention; and
  • Sustain vital programs that keep individuals in their homes.

Your voice matters. Together, we can ensure federal policy reflects the realities and needs of today’s home and community-based care system. View a sample letter for public comments here.

How to Submit Your Letter of Support
Visit the Regulations government website and search for the DOL proposed rule on companionship services. Comments must be submitted by July 31, 2025

If you have any questions, contact Fady Sahhar, RCPA PD&A Division Director.

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Last week, the Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2026 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) proposed rule, as well as an accompanying fact sheet. The rule does not include proposed changes to the IRF coverage requirements. On the payment side, the rule would provide an overall 2.8% increase to estimated payments per discharge, compared to the 2.5% payment update that CMS finalized for FY 2025. The rule is more substantive with respect to the future Quality Reporting Program (QRP) changes. Specifically, the rule proposes to remove certain quality measures and standardized patient assessment data elements (SPADE) implemented in recent years relating to COVID-19 vaccination and social determinants of health (SDOH), and to modify the process for reconsideration of IRF QRP non-compliance penalties. Finally, the rule includes various requests for information (RFI), soliciting feedback on the IRF QRP and IRF-Patient Assessment Instrument (PAI).

The proposed rule will be published in the Federal Register on April 30, 2025. RCPA will provide a more detailed overview of the proposed rule following this date. Comments on the rule are due to CMS by June 10, 2025.

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Image by Werner Moser from Pixabay

On November 7, 2023, RCPA submitted comments to the Department of Labor’s Hour and Wage Division regarding the proposed rule “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (RIN 1235-AA39).” While we understand the need to modernize and update the Fair Labor Standards Act exemption regulations, RCPA strongly urges DOL to re-examine the proposed new salary threshold in a manner that considers the unique pressures on health care providers, as well as regional variations in the cost of living and average salary for human services providers. As currently written, the proposal unfortunately does not consider the implications of current health care funding for safety net services. Thus, the current proposal would have a potentially devastating effect on health care organizations serving low-income individuals with serious and complex disorders and disabilities, resulting in the need for service cutbacks and program closures.

You can read the full comments here.

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