What’s the latest on auto reimbursement?
Who’s doing what and where
As home health agencies struggle to cope with reduced reimbursement rates, many are looking at ways in which to trim costs. First to go are discretionary expenditures, but still some agencies are finding it necessary to cut even further — in some cases into employees benefits.
With this in mind, Hospital Home Health took a look at agency policies on employee auto reimbursement. In an informal sampling, agencies across the country were asked whether mileage reimbursement was still on the list of employee benefits. In every case, the answer was a resounding "yes." Most are offering reimbursement for mileage only, ranging in amount from between 25 cents and 32 cents. A few home health agencies, however, offer more. Here’s what they’re doing and why:
o Karen Marshall, MS, RN, C, administrator for Portsmouth-based Home Care of Southern Ohio says her agency does have an auto expense reimbursement policy. "We reimburse mileage expenses and match the federal allowable up to 31.5 cents. I don’t know how you would get people to work for you if you didn’t pay mileage.
"The only additional reimbursement we provide to staff is, for example, if they incur an accident during the course of business or agency work. If they produce a police report and a supervisor’s documentation of the accident report, then we will pay their deductible up to a limit of $500. We’re lucky in that our overall accident rate is low, so this doesn’t get used a lot. This quite possibly will get cut, but we’re still in a position where we have other things we can cut prior to this. After all, while the federal requirements for allowable reimbursement are really generous and cover more than the gas to run the cars, our staff are using their cars for conducting business for the agency, so it’s a tough one to cut.
"The other thing we provide staff, although it’s an availability to be used infrequently, is that if their car is in the shop and they can’t use other transportation, we will provide a leased vehicle for the day so they can conduct their visits. It’s a business decision really. It costs us far more to cover visits on overtime than it does for us to lease a car for $18," she adds.
o Craig Chartier, director of home health at Marquette (MI) General Home Health and Hospice, says his agency takes a different tactic. "We have a fleet of 132 no-frills, compact cars that employees use. Employees are assigned a vehicle, and it’s garaged at their homes. Employees are limited as to the number of miles they can use for personal use — a maximum of 50 miles a week. They have to meet it as income and are taxed on it accordingly.
"It really is an employee-satisfaction issue. It’s funny because initially everyone was used to the mileage checks and were upset when they ended, but in reality only one out of 130 people was putting that check in the bank. It’s the kind of thing where people think of it as free money until they have to replace the vehicle and then they say you don’t pay them enough. It’s been an interesting change, and occasionally if we’re short of cars and have asked for volunteers to drive their own, we’ve had very few volunteers," he explains.
Community recognizes little white cars’
"We’ve had the fleet for 4½ years, and prior to this, we had mileage reimbursement for 26 cents a mile. At the time we bought the vehicles, we were able to provide them for essentially the same costs as paying for mileage but with the additional benefits of knowing that employees had dependable cars, something that had been a problem for us before. Our automobile insurance policy covers the fleet and our employees while they’re driving for personal reasons or for work. All repairs, maintenance, preventative and unscheduled, and tires — it’s all covered. Employees incur no expense.
"This is something we will continue to offer because we view it as a necessary expense, not an additional one. It’s nice, too, because the cars are all identifiable as being from our agency and they’ve helped us to establish a presence. Everyone knows our little white cars,’" Chartier says.
o Michael Caracci, CEO, Sta-home Health Agency in Jackson, MS, explains his agency’s policy. "We provide cars for some therapists, but for most people the only thing we’re doing is paying mileage at 25 cents a mile. We’ll probably have to do away with providing cars because of HCFA’s changes in auto reimbursement. In the past, if I drove a $7,000 car for the agency and half of its use was personal and half for work, $3,500 would be listed on the W2 form as compensation. But according to the Balanced Budget Act of 1997, HCFA won’t allow that any more so I would have to give up the company car and have my salary raised by $1,000 a month.
"In the past, we had a fleet of cars that we traded in after 150,000 miles. People who had to travel from branch to branch were offered the cars, and we also offered them to physical therapists as part of their benefits. We gave them car allowances, too, but we’re doing away with that and incorporating it into their salaries because of the changes with HCFA. We won’t even call it a car allowance. We’ll just lump it in with their salary and forget about it," he states.
"We won’t cut mileage though. The IRS allows 31.5 cents a mile, and whatever they allow we’ll offer. We offer our employees guidance on mileage reimbursement and tell them to track all their mileage and then deduct the difference from their taxes," Caraccci concludes.
• Michael Caracci, CEO, Sta-home Health Agency, 406 Briarwood Drive, Bldg. 200, Jackson, MS 39206-3003. Telephone: (601) 956-5100.
• Craig Chartier, Director of Home Health, Marquette General Home Health and Hospice, 420 W. Magnetic St., Marquette MI, 49855. Telephone: (906) 228-4325.
• Karen Marshall, MS, RN, C, Administrator, Home Care of Southern Ohio, 727 Eighth St., Portsmouth, OH 45662. Telephone: (614) 354-4663.