Employment issues: Home care vs. hospital

Different situations require different policies

By John C. Gilliland II

Health Care/Employment Attorney

Covington, KY

Dealing with employment and other human resource issues constitutes a significant portion of any company’s operations. Certainly, home care is no different. One only has to look at the percentage of a home health agency’s budget that is devoted to wages and benefits to see how important employment-related issues are to the agency’s operation.

But when you take the time to consider that some of the very qualities that make the home care profession so appealing to some can become a headache for the home care human resource professional, you might think the industry has more than its share of employment-related issues and the headaches that follow.

Hospital connections won’t make it easier

Whether it concerns minimum wage, overtime pay, unlawful discrimination, negligent hiring, or wrongful discharge, failure to comply with legal requirements can lead to significant liability for back wages, damages, and possibly the employee’s attorney fees.

It’s tempting to imagine that the backing of a hospital’s human resource department would make dealing with employment-related issues easier for a hospital-based or affiliated agency. Unfortunately, that’s rarely the case.

For many such agencies, the problem is quite often the hospital itself: The agency is expected to operate according to hospital policies and procedures that typically have little relevance to the reality of how a home health agency functions.

Hospital policies that inaccurately reflect the working environment of home care employees and the subsequent differences between hospital and home care employment create a vicious cycle of problems for the home health agency. First, recruiting new employees is significantly more difficult when it becomes clear that the hospital lacks a true understanding of how its own home care agency functions.

Without adequate and properly trained staff, Medicare and Medicaid reimbursement may be compromised as a result of poor or incomplete documentation, putting the agency at risk of failure to comply with legal requirements. The end result? An agency’s ability to succeed may be jeopardized.

Most commonly, the misconceptions are created when hospital management is either unaware or refuses to recognize the striking differences between employment in a hospital and in a home health agency. Such differences include:


The types of employees.

By their very nature, home health agencies use a variety of employees, the types of which are simply nonexistent within an inpatient hospital setting, such as home health aides, sitters, and companions. But more than just the type of employee, it’s the ways in which they are scheduled that differ so sharply with that of hospital staff. It’s not surprising then that employment policies devised to work in a hospital setting will not be 100% applicable to a home health agency.


Compensation arrangements.

In home care, staff compensation arrangements can be quite different from what prevails in a hospital. In a hospital, there are both salaried and hourly employees, whereas a home care agency additionally will compensate a percentage of its employees in a variety of nonstandard ways — per-visit pay, per-diem pay, salary plus bonus arrangements, daily instant pay, and bonuses for timely and complete documentation.

Rarely do hospital policies allow for the types of compensation arrangements a home care agency must be able to offer its employees, making the agency less attractive to employees and seriously jeopardizing its ability to attract and retain employees.

Even when home care compensation models are permitted by the hospital, its payroll department may not know how to properly calculate hours worked and overtime pay under those pay arrangements. Moreover, application of the wage and hour laws to home care can involve issues that simply never arise for hospital employees.


Employee benefits.

Most hospitals provide a comprehensive array of employee benefits. In contrast, due to today’s reimbursement environment, home health agencies have or are becoming quite lean in the benefits department. In more traditional work sectors that is seen as a large drawback. However this tends to work well for the home care employee who is, more often than not, more cash-oriented than benefits-oriented.

If a hospital-based home health agency is required to provide the same employee benefits as the hospital, rather than adapting to what is relevant to the home care operation, the additional costs of doing so may make it virtually impossible for the agency to remain competitive and profitable.


Autonomous employees.

Typically, a hospital employee works directly for a supervisor. In contrast, a home care employee functions autonomously in the field with little or no direct supervision. To address these differences in work environments, the hospital must adapt its employment policies to match the needs of the home care agency. Among the topics to be considered are scheduling, time-keeping, documentation, travel time, meal periods, and telephone use — to name only a few.


Employee-dependent reimbursement.

Unlike a hospital, a home health agency is reimbursed for services based upon the adequacy of documentation produced by an employee working in the field with little to no supervision.

Thus, if the employee fails to correctly document the work, not only may reimbursement be denied, but the agency might become subject to various government investigations into fraudulent activity.


Differences in working time.

In the hospital setting, it’s usually quite clear what constitutes an employee’s workday and how much time the employee has worked. In home care, though, there is no such thing as a "standard" workday, a situation that would be considered highly atypical in the hospital setting. For example, in home care, issues arise with regard to travel time, sleeping time, and work at home, which do not arise in a hospital. Even on-call time, which may exist in both a hospital and a home health agency, typically has different legal issues in a hospital than in home care, for example, exactly when the time counts as working time, how time spent on the phone is to be treated, travel time, and how to calculate overtime pay in light of on-call payments.


Differing applications of laws.

Even when the same law applies to both the hospital and the home health agency, it can differ significantly in its application and thus its ramifications for hospital and home care employees. For example, various occupational safety and health requirements require different responses, such as universal precautions, infectious waste, and respiratory protection.


Off-site employees.

In a hospital, most of the employee’s working time is spent on the hospital premises. But in home care, most of a field staff employee’s time is spent at patients’ homes and not the office.

Copies of policies and resources, which are available only at the office, are not particularly helpful to a home care employee who needs to have reference materials — including personnel policies — readily available for use and consultation in the field.


Competition by former employees.

It’s very easy for a home care employee to go to work for another agency only to have patients follow. From the patient’s perspective, the nurse or home health aide is the home health agency, so whatever company employs the aide is of little consequence. In contrast, although hospital patients can be just as attached to hospital employees, it would be very unusual for a patient to follow that nurse to another hospital.


Criminal history checks.

Background checks — especially into criminal activity — are becoming quite common in home care and are required by law in an increasing number of states. Such checks are especially important in home care because employees are usually alone with patients in their homes. In contrast, criminal history checks are not nearly as common in a hospital environment.


Corporate compliance programs.

The specific issues to be addressed in a hospital’s corporate compliance program are in many respects different than for a home health agency. For example, in home care, matters such as homebound status, medical necessity, and the assurance that falsified visits do not occur are critical. Such risks don’t exist in a hospital setting.

This listing of specific differences between hospital employment and home care employment is not exhaustive, nor will each of the stated difference exist in all circumstances.

What is true in most situations, however, is that many employment policies and practices, including employee handbooks, developed for use in a hospital setting may not be appropriate for home care employees and have little, if any, relevance to them. Home care is a different kind of business and provider than a hospital.

Attempting to use hospital policies, practices, and employee handbooks in home care without at least adapting them to the home care environment not only increases the risk of legal liability but can very well lead to an agency closing its doors.

Consider this: No hospital would think of taking the employment policies and practices of a home health agency and imposing them on the inpatient hospital environment: It wouldn’t work. Why do so many hospitals do the reverse to their home health agencies?