Paying home health pros: Do you know your options?

Fee-per-visit pay is a win-win situation for home health nurses, therapists, and their agencies, says John C. Gilliland II, an attorney in Indianapolis who specializes in home health and employee law. The motivated nurse who wants to earn as much as possible can take on extra visits, cover for vacationing colleagues, and be compensated for each visit, he says. The agency can be sure that nurses or therapists are paid only for their productive time, he adds.

At the same time, most agency directors contend that they do need to offer other pay incentives to make sure field employees attend inservices, complete paperwork in a timely manner, and attend staff meetings, Gilliland points out. This is how a home health agency stumbled into the losing side of a lawsuit in Elwell v. University Hospitals Home Care Services.1

How can you compensate nurses and therapists for patient visits but still assure that they meet other responsibilities such as inservice education without risking violation of the Fair Labor Standards Act? Gilliland suggests the following options:2

Continue per-visit pay without payment of overtime pay and with no additional compensation for time spent in inservices, on-call service, and staff meetings. This is supported by the Fazekas3 decision, but there are two risks:

1. Courts outside the 6th Circuit may not follow the Fazekas decision.

2. Even if they do, you will need to establish that the nurses’ visits are unique and not the same thing over and over.

Continue per-visit pay without paying overtime pay but manage schedules to avoid the nurses working more than 40 hours in a workweek. This approach manages the risk by avoiding overtime in the first place.

Continue per-visit pay but pay overtime pay for all hours worked more than 40 in a workweek. Under this option, the nurse simply would be treated as being entitled to overtime pay. Provided the overtime pay is properly calculated, no additional liability would result.

Continue per-visit pay with hourly payment for time not included in the per-visit payment. This, of course, is what the 6th Circuit held in Elwell results in the nurse being entitled to minimum wage and overtime pay. If you are in Ohio, Michigan, Kentucky, or Tennessee, you are bound by the 6th Circuit’s decision and your registered nurses will be held to be entitled to overtime pay if paid this way. If you are located in another state, you will have to convince your courts to not follow the Elwell decision — an uphill battle, at best. For these reasons, this option is not recommended.

Continue per-visit pay with lump-sum payments for time not included in the per-visit payment. This avoids the hourly pay problem that led the 6th Circuit in Elwell to say the nurse was nonexempt, but it is still risky. The fee basis of payment regulations does not expressly permit extra pay in addition to the per-visit pay. Consequently, a court could hold the extra lump-sum payments are incompatible with the fee basis concept.

Pay a salary plus a per-visit bonus. This avoids the fee basis of payment issue entirely by changing the compensation arrangement to be a salary with a per-visit bonus for each visit made over a stated minimum. For example, paying the nurse $400 per week with a per-visit bonus made for every visit more than 10 in the workweek. (This is just an example; adjust the numbers as you want, but keep the salary above $250 per week.)

If you do pay per-visit pay, as opposed to the salary plus per-visit bonus, you must still keep records of the hours worked by the registered nurse each workweek, Gilliland adds.

References

1. Wendy Elwell v. University Hospitals Home Care Services, No. 98-02472, U.S. Court of Appeals for the Sixth Circuit (Jan. 11, 2002).

2. Gilliland JC. Legal Ramifications of Per Visit Pay. Indianapolis. Web site: www.gilliland.com. 2002. Reprinted with permission.

3. Fazekas v. Cleveland Clinic Health Care Ventures Inc., No. 99-3059, U.S. Court of Appeals for the Sixth Circuit (2000).