Reminder: Home Care Providers cannot test for Marijuana Use, in Almost all Cases 

Given the recent legalization of recreational marijuana use in New York State, and the regular application of drug tests in the home care industry, it is imperative for employers to understand the limitations of their ability to screen and test for marijuana use.

The Marijuana Regulation and Taxation Act (“MRTA”) amended Section 201-d of the New York Labor Law – which prohibits discrimination by an employer against an employee because of certain lawful outside work activities – to include protections for recreational cannabis use. As such, employers are now prohibited from discriminating against employees based on their use of cannabis outside of the workplace, outside of work hours, and where use does not involve the employer’s equipment or property. Under the MRTA, employers cannot take adverse action against employees for their use of legal cannabis outside of the workplace and outside of working hours work hours, except where: (a) an employer is required to take such action by state or federal law; (b) the employer would otherwise be in violation of federal law or would lose a federal contract or federal funding; or (c) the employee, while working, manifests specific articulable symptoms of impairment that either decrease or lessen the employee’s performance or interfere with the employer’s obligation to provide a health and safe workplace.

We highlight below several Q&As from the New York Department of Labor guidance for employer’s

knowledge:

  • Can an employer test for cannabis? No, unless the employer is permitted to do so pursuant to the provisions of Labor Law Section 201-D(4-a) or other applicable laws.
  • Can an employer drug test an employee if federal law allows for drug testingNo, an employer cannot test an employee for cannabis merely because it is allowed or not prohibited under federal law. (See e.g., USDOL TEIN 15-90 explaining that neither the Drug Free Workplace Act of 1988 nor the rules adopted thereunder authorizes drug testing of employees.) However, an employer can drug test an employee if federal or state law requires drug testing or makes it a mandatory requirement of the position. (See e.g., mandatory drug testing for drivers of commercial motor vehicles in accordance with 49 CFR Part 382; see also e.g., NY Vehicle and Traffic Law Section 507-a which requires mandatory drug testing for for-hire vehicle motor carriers in accordance with 49 CFR 382.)
  • Can employers require that employees promise or agree not to use cannabis as a condition of employment? No, employers are not permitted to require employees to waive their rights under Section 201-D of the Labor Law as a condition of hire or continued employment.



  • Are existing policies prohibiting use permitted? No, unless an exception applies. Employers are encouraged to update or amend such policies to reflect changes to New York State law
  • Can employers prohibit use of cannabis during meal or break periods? Yes, employers may prohibit cannabis during “work hours,” which for these purposes means all time, including paid and unpaid breaks and meal periods, that the employee is suffered, permitted or expected to be engaged in work, and all time the employee is actually engaged in work.

If you have any questions about this article, or need assistance in preparing lawful marijuana use policies for your workforce, please contact us.

Merger and Acquisition Considerations for Healthcare Providers

As the year comes to a close and operators continue seeking ways to grow through acquisitions and capitalize on some of the COVID relief to grow their businesses, we provide this article and overview of the key issues to consider in corporate transactions.

While mergers and acquisitions present considerable potential benefit, they can also present substantial compliance risks. Key regulatory and employment law considerations include:

  • Regulatory considerations. In home care, a license does not “transfer” with the sale of stock or membership interests of an organization. Thus, the duration of any change of ownership process should be considered, as well as the practical operational issues related to the business as the buyer is waiting for the license transfer process to be completed. Who will run the business until the change of ownership is complete, and what protections will the seller have while the license is still under their name from any liabilities that the buyer-operator may incur? These are important issues to address before signing off on a transaction.
  • Implications of federal, state and local laws applicable to the specific type of service being provided by the seller. In home care, wage parity is a major financial and operational burden that, upstate or out-of-state buyers should carefully consider and analyze before undertaking the acquisition of a downstate entity.  
  • Proper classification of workers that qualify as exempt or independent contractors, especially sales personnelDepending on the nature of the transaction, wage and hour issues that exist with the seller entity could be deemed assumed, or “inherited,” by the surviving or buyer entity. Thus, these issues should be carefully reviewed to ensure the buyer is not buying a liability. Further, in healthcare generally, 1099 relationships with marketing and business development professionals could carry significant antikickback violations that the buyer might not wish to assume.
  • The status of the license, if any, or contracts for services that the seller holds. The value of a business or an asset for licensed providers depends in large part on the contracts and licenses that the business holds. Thus, a buyer will want to ensure that the license or contract is “secure” with the seller. Did the seller have a bad survey recently that could result in revocation proceedings? Is the seller a CDPAP FI that did not receive the “lead” FI award and, thus, will have to cease operations at one point? Is the seller currently under investigation by regulators for fraud or other serious issues that could result in asset diminution? These are all issues that should be considered by a buyer.
  • Inclusion of non-discretionary bonuses when calculating overtime. For a bonus to qualify as discretionary, three key standards must be met: the employer has the sole discretion in determining whether to pay the bonus; the employer has the sole discretion in determining the amount of the bonus; and the bonus payment is not made according to any prior contract, agreement or promise.
  • Billing errors. If the seller bills any government payors, a prudent buyer will conduct a review of the claims submitted and paid, as well as claims submission process, to assess the level, if any, of noncompliance with federal, state or contractual billing requirements. Depending on the structure of the transaction, regulators, like the Attorney General or OMIG, may seek recoupment of wrongfully paid claims against a third-party buyer.
  • Successorship obligations when acquiring a unionized workforce. If a purchaser is deemed to be a successor, the purchaser is obligated to recognize and bargain with the union representing the seller’s employees. Therefore, the obligations and costs of the union contract must be carefully assessed.
  • Immigration employment issues and associated I-9 obligations. Does the seller retain all the documentation necessary to comply with immigration laws? Common problems include incomplete or fraudulent documents, failure to retain documents, and failure to track expiration dates, among others.
  • Employee background check obligations and prohibitions. Employers must meet specific obligations at three different stages: before a background check is requested; before “adverse” action is taken based on a background check; and after adverse action is taken based a background check. In addition, exclusion checks in the healthcare field have to be conducted on staff as a condition of billing for such staff services. The seller’s procedures in regards to background checks should be a subject of due diligence. 
  • Affordable Care Act requirements and the penalties associated with non-compliance. Under the Act, employers with 50 or more full-time employees, or with a part-time employee equivalent of 50 full-time employees, must offer affordable minimum-value health insurance to employees working 30 or more hours per week. Employers failing to comply must pay considerable penalties.
  • Federal and state tax consequences of “Golden Parachute” arrangements. For example, such payments often are not deductible by the corporation and are subject to an excise tax on the recipient.
  • Federal and state Worker Adjustment and Retraining Notice (WARN) obligations. Generally, employers with 100 or more employees who work more than 20 hours per week must assess whether compliance with the federal WARN Act is required relative to any certain job-reduction action. The same assessment must be made concerning compliance with the New York State WARN Act.
  • OSHA COVID prevention and mitigation requirements. OSHA’s enforcement of Covid and non-Covid related workplace hazards remains robust. Employers must have in place a Covid-19 prevention and mitigation policy, and that policy must be distributed to employees.

DOH has taken Steps to Address Healthcare Worker Bonus Portal Challenges for LHCSAs

The Healthcare Worker Bonus Portal (the “Portal”) is not accessible to LHCSAs that have a “non-billing” provider number, the MMIS.  LHCSAs that only bill managed care and not Medicaid directly might have been assigned a MMIS that is a “non-billing provider” MMIS. Unfortunately, this non-billing MMIS precludes the LHCSA from accessing the Portal and  processing requests for the healthcare worker bonus.

Today, however, the Department of Health (“DOH”) sent a notification to providers, requesting that they complete a survey. The survey will create a process for these LHCSAs – who otherwise meet the requirements for the healthcare worker bonus program – to register their employees for the bonus.  Only employers who are eligible but not currently registered for the bonus program should complete this survey, which was sent through eMedNY. The survey is only available until December 6, 2022. Following the close of the survey on December 6, 2022, DOH will provide additional information regarding the bonus program registration procedures. Providers are reminded that they are required to “register” their eligible employees for the bonus program and could be investigated by OMIG if they fail to do so. Thus, all providers that have been unable to complete the portal registration to date should take steps to respond to this survey and pursue the bonus for their employees.

DOH Updates Return-to-Work Protocols for Healthcare Personnel  

The State Department of Health (DOH) has updated its guidelines on return-to-work protocols for healthcare personnel (HCP) with COVID-19 infection or exposure. The guidelines supersede the most recent guidance from the DOH, which had been issued on February 4, 2022 and point providers to the CDC’s guidelines, which are available here and here

The CDC guidelines provide that, generally, asymptomatic HCP who have had a higher-risk exposure do not require work restriction, regardless of vaccination status, if they do not develop symptoms or test positive for SARS-CoV-2. 

For HCP that have tested positive for COVID, rights to time off from work depend on the staffing levels of the health care provider.  If the provider’s staffing levels are so low that the provider is in a “crisis” mode (and crisis mode must be reported to the DOH), then the provider has to follow certain standards when staffing cases with staff who are reporting COVID-positive results. See the CDC guidelines here. In our experience, very few agencies have acknowledged that they are in crisis mode, and even fewer have reported the same to the Department.

For healthcare providers that are in the “contingency capacity” mode, the following rules apply for employees that test positive for COVID:

HCP with mild to moderate illness who are not moderately to severely immunocompromised can return to work when:

  1. At least 5 days have passed since symptoms first appeared (day 0), and
  2. At least 24 hours have passed since last fever without the use of fever-reducing medications, and
  3. Symptoms (e.g., cough, shortness of breath) have improved.

HCP who were asymptomatic throughout their infection and are not moderately to severely immunocompromised may return to work when at least 5 days have passed since the date of their first positive viral test (day 0).

Providers are reminded that COVID sick pay is still in effect and employees must be paid for the time that they are not permitted to work due to COVID. Further, such paid time off cannot be deducted from the employees’ PTO/sick time accruals. Rather, the COVID sick leave is an employer-funded separate “bank” of paid time off to which employees may be entitled.

DOH Extends Waivers of Regulatory Requirements

On November 23, 2022 Governor Hochul signed Executive Order (EO) 4.15, which continues certain regulatory relief measures for home care providers until December 23, 2022.  As its predecessor, EO 4.15 provides that:  

  1. Initial patient visits for CHHAs, LTHHCPs, and AIDS home care programs may be made within 48 hours of receipt and acceptance of a community referral or return home from institutional placement;
  2. CHHAs, LTHHCPs, AIDS home care programs and LHCSAs may conduct in-home supervision of home health aides and personal care aides as soon as practicable after the initial service visit, or permit in-person and in-home supervision to be conducted through indirect means, including by telephone or video communication;
  3. Nursing supervision visits for personal care services to be made as soon as practicable. 
  4. RNs, LPNs, and NPs licensed and in current good standing in any state in the United States may practice in New York State without civil or criminal penalty related to lack of licensure;
  5. Allows New York State-licensed providers without current registrations to practice without penalty for lack of registration;
  6. Expands the scope of practice for additional health care workers to allow for COVID-19 testing and vaccinations, including an expansion of the ability of midwives, registered nurses, physicians and nurse practitioners to more easily administer and order COVID-19 vaccinations and testing as well as flu vaccinations.

Note that while the above relief measures continue, the state Department of Health still expects agencies to adhere to existing state regulations and to provide services in patients’ homes. If the agencies cannot do so, then they should document what barriers they have encountered in these areas and their efforts to address such barriers that necessitate utilization of these relief provisions. 

NY CDPAP RFO Moves Forward

This afternoon, the New York State Department of Health released attestation forms and supporting information forms for fiscal intermediaries that had applied for the CDPAP RFO but which had not previously been selected as lead fiscal intermediaries. As home care insiders will recall, there was a first round of CDPAP RFO awardees (68 agencies in total) announced by New York State Department of Health in February 2021.  However, due to subsequent changes in the law, the Department re-opened the RFO to additional fiscal intermediaries that had applied for the RFO but did not “win” an award in the first round. This “second” round of RFO contracts is intended for fiscal intermediaries that met certain patient census requirements during the first quarter of 2020.  Today’s forms were issued in furtherance of this second round of awardees, to invite them to submit information to New York State and demonstrate that they meet the patient census requirements that are necessary to receive a lead fiscal intermediary RFO award.

As we had reported previously, based on the changes made in the law, fiscal intermediaries that actually applied and that were not awarded by the New York State Department of Health within the first round of awards, are still eligible to receive a lead contract with New York State. To be clear, this second round of potential awards does not apply to any fiscal intermediary that did not apply for a RFO in 2020. Thus, entities who wish to become a fiscal intermediary now or that somehow began providing FI services since the RFO was submitted in March 2020 cannot utilize this process to become a lead fiscal intermediary.  

For the entities that did apply in 2020, but were not yet notified officially by the Department that they are a lead fiscal intermediary, such entities can still qualify as a lead fiscal intermediary if they can demonstrate that they had 200 or more consumers being serviced during the period of January 1, 2020 through March 31, 2020 in any or all of New York, Kings, Queens, Bronx, and Richmond counties. In the alternative, a fiscal intermediary could be awarded a contract as a lead if it demonstrates that it serviced 50 or more consumers in any other county of New York State during the same applicable Q1 2020 period.

The Department has issued a one-page attestation form for this “second slate” of fiscal intermediary applicants to complete, alongside with a template “attestation supporting information spreadsheet,” which also has to be completed. The supporting documentation must provide sufficient evidence to confirm that the fiscal intermediary indeed was serving the requisite number of consumers, on the requisite dates, and in the requisite counties, otherwise the entity will not qualify to receive the lead fiscal intermediary award from New York State.

The deadline to submit the attestation and supporting documentation is November 29, 2022. The State has also announced that the anticipated contract award date for all the lead fiscal intermediaries (inclusive of first and second “slate” awardees) is now January 15, 2023. After the lead contracts are awarded by the State, the non-lead fiscal intermediaries will be required to begin transitioning consumers to lead fiscal intermediaries.

If you have any questions about the CDPAP RFO process, please let us know.

DOH Postpones Wage Parity Certification Deadline

Today, the Department of Health announced that it would be postponing the wage parity certification deadlines once again.  As relevant to home care providers covered by the Wage Parity Law, LHCSAs and FIs are now required to submit completed LS300 forms by December 1, 2022. The LS300 form will be revised by the DOH before December 1, thus providers should not rush to sign the current LS300 version.

The LS301 requirement for an independently audited financial statement for calendar year 2021 has been further delayed. Statements for calendar years 2021 and 2022 are now due on October 1, 2023.

CHHAs and MLTCs are required to receive and review network providers’ LS300 forms by December 1, 2022.  The compliance date for CHHAs’ and MLTCs’ receipt and review of independently audited financial statements for the LS300 forms for calendar years 2021 and 2022 is October 1, 2023.

The Department’s announcement also makes clear that, going forward, the deadline for compliance and certification under the LS300 and LS301 requirements will be October 1 of each year.

Lastly, any LS300, LS301 or audited financial statements already submitted by LHCSAs or FIs prior to the Department’s guidance may be reviewed and considered completed for the 2022 year.  LHCSAs and FIs who have completed these requirements do not have to revise or resubmit to their contracted CHHAs, LTHHCPs or MCOs once revised forms or procedures are posted by the Department.

If you have any questions about this development, please let us know. 

NYS Issues Guidelines for LHCSA Ownership Changes and New LHCSA Establishment

Today, the New York State Department of Health released extensive information and GUIDELINES regarding changes of ownership for LHCSAs and applications for licensure. This guidance has been in the making since 2018, when the Public Health Law was amended to prohibit the Public Health and Health Planning Council from approving new LHCSA applications unless there was a “public need” for such a LHCSA, the character, competence and “standing in the community” of the LHCSA’s owners, directors, and other stakeholders was established, and the LHCSA demonstrated that it had financial resources to operate the agency. 

Today’s Dear Administrator Letter establishes that:

  1. The public need methodology will apply to all LHCSA applications submitted on or after April 1, 2020.
  2. The public need methodology includes a rebuttable presumption of no need for additional LHCSAs in a county if there are 5 or more LHCSAs actively serving patients within the county as of April 1, 2020. 
  3. A LHCSA applicant can overcome the presumption of no need based on local factors related to an applicant’s services or planning area, including, but not limited to:
  • the demographics and/or health status of the patients in the planning area or the State, as applicable; 
  • documented evidence of the unduplicated number of patients on waiting lists who are appropriate for and desire admission to a LHCSA, but who experience a long waiting time for placement; 
  • the number and capacity of currently operating LHCSAs; 
  • the quality of services provided by existing agencies; 
  • the availability and accessibility of workforce; 
  • personnel and resources dedicated to adding and training additional members of the workforce including committed resources in an organized training program; 
  • cultural competency of existing agencies; and, 
  • subpopulations requiring specialty services.

Applications for licensure based on change of ownership for LHCSAs actively serving at least 25 patients will not be subject to public need review and shall be evaluated only on financial feasibility and the character and competence of the proposed operator, unless the proposed operator seeks to serve patients outside of the agency’s approved counties. 

LHCSAs affiliated with an Assisted Living Program (ALP), Program of All-Inclusive Care for the Elderly (PACE), Nurse Family Partnership (NFP), or Continuing Care Retirement Community (CCRC) will be exempt from the public need methodology if the agency exclusively serves patients within those programs. 

All applications will be reviewed for character and competence. 

The DOH’s DAL also provided a link to a new application for licensure, available HERE, and FAQs, which can be accessed HERE

If you are considering a LHCSA acquisition or sale, or are in the process of a change of ownership, or if you have general questions about this development, please contact us.  

NYS Operationalizes the Healthcare Worker Bonus Program

Your Employees may be Eligible for a $3,000 One-Time Bonus, paid mostly by the federal Government

As we reported in our April alert, the New York State Budget established a healthcare worker bonus (the “Bonus”) program that would pay up to $3,000 to qualified healthcare workers that are employed by qualified providers. On August 3, the Department of Health notified providers through eMEdNY that the healthcare worker bonus program (“HWBP”) has been activated, and that a portal has been established through which providers would submit required information to apply for their employees’ bonuses. The Department’s website for the HWBP is generally robust, and available here. The information that is plainly on the website will not be repeated here. Instead, this alert will focus on some common outstanding questions that have not been addressed by the Department, as they relate to home care providers. Clearly, the HWBP was designed around the hospital and, a little less so, the nursing home setting. Thus, much of the Department’s guidance and interpretation of the HWBP does not translate easily to the home care context.

Initially, insofar as entity eligibility, we know that CHHAs and LHCSAs are covered by the HWBP. There is generally a requirement that the provider be enrolled in Medicaid, but some avenues for non-Medicaid providers also appear to exist. In addition, although not mentioned by the Department on its website, the HWBP law itself states that other Medicaid-billing providers may participate in the program, so long as “at least [20%] of the provider’s patients or persons served are eligible” for Medicaid services. Thus, this 20% threshold is relevant to providers who not only operate a home care program but may offer related healthcare services.  

Providers who rely on staffing agencies for healthcare labor cannot seek and obtain bonuses for those healthcare staff that is assigned by the staffing agency, as per the DOH’s FAQs (available here).

Fiscal Intermediaries are outright considered ineligible employers by the Department, per the DOH’s FAQs.

Separately, insofar as employee eligibility, we know that New York State has determined that direct care staff, such as HHAs and PCAs, are not eligible for the Bonus. In their FAQs, the State has explained that, due to the $2.00 minimum wage increase taking effect October 1, home care workers have, effectively, been rewarded sufficiently.  However, other clinical staff employed by home care agencies are eligible for the Bonus, such as nurses and therapists. It Is not clear if such clinical staff, to the extent they worked remotely (as they were authorized to do during the vesting period under various regulatory waivers), would be eligible for the Bonus. This question has not been addressed, but we know that there is an emphasis in the HWBP in rewarding “front line” workers.

In addition, it is not clear if other office staff, such as coordinators, HR intake, and compliance employees would qualify for the Bonus. In the DOH’s list of eligible employees, various clerical and clerk positions are identified as “other health care support workers” who would be eligible for the Bonus. The names of these titles suggest that they are hospital and nursing home-setting positions, where there would be some potential of front-line work and patient-facing responsibilities. It is unclear if this rationale extends to home care, where the office staff rarely, if ever, interacts directly with patients of home care services. This is a pivotal issue for LHCSAs and CHHAs. In our conversations with the DOH, we were not given an explanation or any guidance. Rather, the DOH suggested that providers begin the enrollment process on the portal and address these worker eligibility issues through the application process. 

Separately, another outstanding issue has to do with the salary cap of $125,000. The HWBP limits the Bonus to individuals whose annualized base salary is $125,000, excluding overtime and bonuses. However, it is not clear whether other compensation (such as shift differentials, vacation pay) can be considered as part of the base salary.

Insofar as taxes and payroll obligations, the DOH takes the position that the $3,000 bonus is not subject to New York personal income tax. There is no mention of federal income tax implications.  There is also no mention of unemployment insurance or workers’ compensation implications of the $3,000 payment. We have sought clarification of these items, since there is no reimbursement to covered employers for these ancillary related costs of paying a $3,000 bonus.

Lastly, the HWBP is a mandatory-participation program. Employers must submit claims and seek the Bonus for their eligible employees’ bonuses. Any employee who does not receive a bonus that they may be entitled to is directed to complain to OMIG’s Fraud Hotline. Thus, for any employer that might be overly frustrated by the lack of clarity, or potential payroll and overhead obligations of the HWBP, such employer does not have the option to waive participation.

We will be following up with the DOH on these outstanding issues, and others. In the meantime, if you have any questions about the program, please let us know.

New York State Proposes Changes to Medicaid Fraud, Waste and Abuse Prevention Programs and its Compliance Program Requirements 

The New York State Office of Medicaid Inspector General (OMIG) has proposed regulations (the “Regulations”) to revamp its provider compliance program and enforcement. The proposed regulations are in the State Register and address (a) provider compliance programs; (b) Medicaid managed care plan organization (MMCO) fraud, waste and abuse prevention programs; and (c) the reporting and returning of Medicaid overpayments to OMIG.

Provider Compliance Programs

The Regulations propose to repeal the current Provider Compliance Program regulatory requirements and replace them with a new Subpart 521-1, which imposes obligations on “required providers” to adopt and implement effective compliance programs. “Required providers” include LHCSAs, other Article 36 entities, as well as Article 28, 16 and 31 entities (including MLTCs) and any other entity for which Medicaid is a substantial portion of its business.  

Additionally, the Regulations include several new requirements that do not appear in existing regulations, including:

  • 10-year document retention requirements for managed care organizations (“MCOs”) and a 6-year document retention period for all other “required providers.”
  • All compliance program requirements expressly apply to the required providers’ contractors, agents, subcontractors, and independent contractors.
  • A new “risk area” — contractors, subcontractors, agents and independent contractor oversight – must be considered by all required providers, and a number of additional “risk areas” must also be considered by MCOs (including MLTCs).
  • Providers that are “required providers” must submit a compliance certification to each MCO for which they are a participating provider upon execution of the MMCO’s participating provider agreement and annually thereafter (and the submission method shall be described on the MCO’s website).
  • Required providers must comply with OMIG’s regulations regarding Medicaid overpayments.
  • Specifically enumerating the compliance officer’s duties, including his or her reporting structure. Notably, under the proposed regulations, the compliance officer is no longer required to be an “employee” of the covered provider.
  • Establish and implement an effective system for the routine monitoring and identification of compliance risks, including the types of audits the provider must undertake and the frequency of such audits.
  • Establish and maintain procedures for responding to and addressing compliance issues as they are raised.

MMCO Fraud, Waste and Abuse Programs

The Regulations – with respect to Medicaid fraud, waste, and abuse programs – would apply to all MLTCs, regardless of member enrollment, and further require the establishment of a dedicated full-time Special Investigation Unit (with details about staffing, reporting and work plan requirements) if the MCO has an enrolled population of 1,000 or more.

Some of the more significant requirements in proposed Subpart 521-2 that do not appear in existing regulations, include:

  • Audit and investigation requirements which include the scope of such audits and investigations and the general requirements for conducting such audits and investigations.
  • Obligations to report cases of fraud, waste and abuse to OMIG in accordance with the MMCO’s contract with the Department of Health.
  • Obligation to file a fraud, waste and abuse prevention plan with OMIG 

Medicaid Overpayments

The Regulations reinforce that covered providers or individuals must report, explain and return Medicaid overpayments to OMIG. The term “person” includes home care agencies, hospices and MCOs (including MLTCs and their contractors and participating providers) and virtually any other provider or supplier that is enrolled in the Medicaid program. A reportable incident (and the timeline for reporting the same) begins when the covered individual “has or should have through the exercise of reasonable diligence, determined that they received an overpayment and quantified the amount of the overpayment.”

Comment Period

The regulation will be subject to a 60-day public comment period. Providers who might have comments to the proposed regulations can reach out to our firm and request that comments be formally submitted to the State on their behalf.