May 10, 2017

In recent months, politicians and the public have focused their attention on health care — and almost exclusively on proposed changes to the Affordable Care Act. In this environment, it is easy to forget that the health care industry consistently faces numerous other challenges. With as many as one in eight American workers employed in health care, labor and employment issues are certainly among these challenges. And by recent indications, these challenges are not going away anytime soon. Following are some of the most pressing employment issues facing health care employers today.

Wage and Hour Rules Remain Uncertain

As for most employers, wage and hour issues continue to confound health care companies. The U.S. Department of Labor’s (DOL) long-anticipated “Final Rule,” issued last year, updated the federal white collar overtime exemptions. Per the updated regulations, the new minimum salary level for the executive, administrative, and professional employee exemptions is intended to be $913 per week, or $47,476 per year — more than doubling the current minimum salary level of $455 per week, or $23,660 per year. To comply with the Final Rule, employers were supposed to either increase salary levels to maintain their exempt status or convert previously exempt employees to nonexempt status and pay them overtime compensation when they work over 40 hours in a work week. 

This change was expected to significantly impact health care, where many currently exempt employees (such as nurses, medical and physical therapist assistants, medical and pharmacy technicians, and paramedics) are paid less than $47,476 annually. Indeed, the DOL projected that millions of workers in the health care industry would potentially be impacted by the new rule.

Employers caught somewhat of a break late in 2016, when a federal court temporarily blocked the change from being implemented. While the case works its way through the court system, there are several reasons why health care employers may be well advised to nevertheless implement measures to ensure compliance should the Final Rule go into effect. 

First, the injunction blocking the change is only a temporary order that may be overturned. Second, although the federal changes have been delayed, states such as New York and California have begun trying to adopt variations of the federal requirement at the state level. And perhaps most importantly, many employers have misclassified employees irrespective of the rule change (i.e., treating non-exempt employees as exempt). The new federal rule offers employers an opportunity to self-correct without drawing undue attention to current misclassification of employees, and may minimize the possibility that employees begin questioning whether they were paid correctly in the past. 

NLRB Scrutiny of Anti-Organized Labor Activity

Another challenge for the health care industry has been the National Labor Relations Board’s (NLRB) increased scrutiny of work rules and policies. Under the National Labor Relations Act, employees have the protected right to form or join labor unions and to engage in “concerted activity,”  free of employer interference. The law does not allow even well-intentioned rules, if the anticipated effect of such rules is to inhibit employees from engaging in activities protected by the. 

In the last several years, the NLRB has focused much attention on employment policies that it believes unlawfully inhibit employee rights to engage in concerted activities. Simply defined, “concerted activity” is when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.  And regardless of whether organizations are unionized or not, the NLRB has been aggressively challenging employer policies that could be interpreted to discourage employees from exercising their protected rights. As examples, the NLRB has found the following to be unlawful:

  • Policies that prohibit employees from using social media to post incomplete or inaccurate information and from making disparaging or misleading statements.
  • Policies that prohibit employees from making critical comments about the employer.
  • Policies that prohibit employees from engaging in solicitation (such as union organizing activity) during nonworking time in working areas if the solicitation would be within visual or hearing range of patients.
  • Policies that limit information that an employee can disclose to individuals within or outside an organization (i.e., confidentiality policies) — HIPAA and trade secrets excepted.

Health care organizations frequently have been caught in the crosshairs of this trend toward protecting employee organization. Even with the recent change in presidential administrations, health care employers are well advised to review and revise existing policies to minimize the possibility that they could be found unlawful. Not only are unfair labor practice charges costly to defend, they can also serve as springboards to union organizing efforts.

False Claims Enforcement Gaining Steam

With the rising costs of health care continuing to make headlines, detecting health care fraud remains a key priority among government regulators. State and federal laws, including the False Claims Act, allow individuals to file a lawsuit to recover taxpayer money when someone has committed fraud against the government. Last year, the federal government recovered $2.5 billion in health care fraud claims, much of it derived from industry whistleblowers who report claims against nursing homes, hospitals, drug companies, physicians, medical device companies, and other entities. 

Practices that have landed employers in trouble include billing for services that were never provided, providing excessive care that is not medically necessary, and pursuing upcoding schemes that increase Medicare reimbursement. And while employers can face exposure for engaging in such practices, they also risk liability for retaliating against employees who “blow the whistle,” even if there is no merit to the employee’s allegations. Indeed, retaliation claims are the fastest-growing form of employment claims against employers, and they are among the most difficult to defend against. 

Health care employers can take a variety of steps to minimize their vulnerability to whistleblowers. These include adopting policies to detect and prevent fraud before it happens, establishing welcoming, non-punitive processes that encourage employees to share concerns, and adopting strong prohibitions against retaliation. All of these practices can reduce the likelihood that employees will feel a need to contact outside agencies with allegations of impropriety.

Along with the inherent complexity of navigating the broader, still-evolving health care regulatory landscape, health care employers cannot turn their attention away from compliance with labor and employment laws and regulations. Experienced counsel can help them avoid a myriad of pitfalls that are out there. 

To find answers to your health law questions and better understand how you can manage the changing landscape of labor and employment compliance, please contact your Much Shelist attorney.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.