Agenda Item 5C
July 25, 2017
Introduction
MEMORANDUM
July 21, 2017
TO:
County Council
rc1£'
FROM:
Josh Hamlin, Legislative Attome\f'
' \
SUBJECT:
Introduction:
Bill 28-17, Human Rights and Civil Liberties - County Minimum
Wage -Amount - Annual Adjustment
Bill 28-17, Human Rights and Civil Liberties - County Minimum Wage - Amount -
Annual Adjustment, sponsored by Lead Sponsor Councilmember Eirich, and Co-Sponsors
Councilmembers Leventhal, Riemer, Hucker and Navarro, is scheduled to be introduced on July
25. A public hearing will be scheduled at a later date.
Bill 28-17 would:
increase the County minimum wage by a certain amount;
require the Chief Administrative Officer to adjust the County minimum wage rate
each year; and
require the Office of Legislative Oversight to conduct an annual analysis of the the
impact of the County minimum wage.
Background
In 2013, the Council enacted Bill 27-13,
1
which established a County minimum wage for
private sector employees working in the County, unless the State or federal minimum wage is
higher. The County minimum wage established under Bill 27-13, as amended, was phased in
over several years. The rate was set at $8.40 per hour effective October 1, 2014, and increased to
$9.55 per hour on October 1, 2015, $10.75 on July 1, 2016, and $11.50 per hour on July 1, ofthis
year. There are no requirements in County law for further increases in the County minimum
wage.
The County minimum wage law has been amended twice since being established by Bill 27-13. Bill 59-14
modified some of the effective dates for increases, and Bill 24-15 modified the method for calculating the ''tip
credit" allowed to employers of tipped employees.
1
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The County minimum wage does not apply to a worker who is exempt from the State or
federal minimum wage, is under the age of 19 years and is employed no more than 20 hours per
week, or subject to an "opportunity wage" under the State or federal law. Employers of tipped
employees may include in the computation of their wage amount a "tip credit" not exceeding the
County minimum wage less $4.00 per hour.
In
2014, the Maryland General Assembly enacted a law raising the State's minimum
wage from $7.25 to $10.10 per hour over four years, with incremental increases to $8.25 in 2015,
$8.75 in 2016, $9.25 in 2017, and $10.10 in 2018. The federal minimum wage is $7.25 hour and
has not changed since 2009.
2
There is a nationwide effort to increase the minimum wage at the
federal, state, and local levels to $15.00 per hour, which has thus far had some success.
3
California and New York have enacted statewide laws that would increase the minimum wage in
those states to $15.00 per hour over a period of years. In addition, several local jurisdictions and
the District of Columbia have passed laws gradually increasing their minimum wage to $15.00
per hour.
Bill 12-16
In January of this year, the Council enacted Bill 12-16,
4
which would have extended the
incremental increases set in County law by Bill 27-13 to go up to $15 per hour. The scheduled
increases under Bill 12-16 were based on the size of the employer: workers whose employers
have 26 or more employees would reach $15.00 per hour by 2020
5
and those of employers with
25 or fewer employees by July 1, 2022.
6
Bill 12-16 would also have required, beginning in 2023,
annual adjustments to the minimum wage by the annual average increase, if any, in the
Consumer Price Index for urban wage earners and clerical workers for the previous calendar
year.
Bill 12-16 also included a "safety-valve" prov1s10n that would allow the County
Executive the ability to pause implementation of a scheduled increase under certain adverse
economic conditions. These conditions included: if total private employment for Montgomery
County decreased by 1.5 percent over the period from April 1 to June 30 of the previous year;
total private employment for Montgomery County decreased by 2.0 percent over the period from
January 1 to June 30 of the previous year; the Gross Domestic Product of the United States
experienced negative growth for the preceding two quarters: or the National Bureau of Economic
Research determined that the United States economy is in recession.
A chart showing the federal minimum wage rates from 1938-2009 is at:
http://www.dol.gov/whd/minwage/chart.htm
3
A summary of jurisdictions approving some form of minimum wage increase in 2016 is at:
http://raisetheminimumwage.com/21-states-localities-approved-minimum-wage-increases-in-2016/
4
The packet for Council action on Bill 12-16 is at:
http://www.montgomerycountymd.gov/COUNCIL/Resources/Files/bill/2016/Packets/20170117 6.pdf
5
The scheduled increases in the minimum wage paid by employers of26 or more employees under Bill 12-16 were:
· $12.50/hr. effective July 1, 2018; $13.75 in 2019; and $15.00 in 2020.
6
The scheduled increases in the minimum wage paid by employers of25 or fewer employees under Bill 12-16 were:
$12.00/hr. effective July 1, 2018; $12.75 in 2019; $13.50 in 2020; $14.25 in 2021; and $15.00 in 2022.
2
2
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On January 23, 2017, the Executive vetoed Bill 12-16. In a memorandum explaining his
veto (©8-10), he expressed support for "the effort to move toward $15 per hour" but indicated
that the enacted Bill went "too far, too fast." The Executive expressed hope that a new bill, with
broader support, could be introduced "in the near future," and called for a study, to be completed
by July of this year, examining the anticipated fiscal and economic impact of an increased
County minimum wage. In addition to the study, the Executive cited exemptions for small
businesses and youth workers, and the provision for reaching a $15/hour minimum wage by
2022, as preconditions for him to fully agree with a new bill increasing the minimum wage.
Bill 28-17
Bill 28-17 would replicate the changes that would have been implemented under Bill 12-
16, but with two key distinctions aimed at addressing issues that were raised during that Bill's
consideration. Under Bill 28-17, two additional classes of employers would be subject to the
slower phase-in schedule for smaller employers (i.e., $15.00/hr by 2022). This schedule would
apply to employers who: (1) employ 25 or fewer employees; (2) have tax exempt status under
Section 501(c)(3) of the Internal Revenue Code; or (3) provide "home health services" or "home
or community-based services," as defined under federal Medicaid regulations (see ©11-19), and
receive at least 75% of gross revenues through state and federal medical programs. The third
group (Medicaid funded employers) would have to be determined eligible by the Office of
Human Rights. Bill 28-1 7 would retain the annual adjustment based on increases in the
Consumer Price Index and the requirement that the Office of Legislative Oversight provide the
Council with an annual analysis of the impact of the County minimum wage on the local
economy. The Bill will also include the "safety-valve" provisions of Bill 12-16, which allow the
Executive to temporarily suspend scheduled increases during the phase-in.
Legal Authority
Montgomery County can set its own minimum wage by law even though the State of
Maryland has a minimum wage law. In
City of Baltimore v. Sitnick,
254 Md. 303 (1969), the
Maryland Court of Appeals upheld a city ordinance establishing a minimum wage standard that
was higher than the State standard. In that case, the plaintiffs argued that State law had
preempted the field of minimum wage. In rejecting that argument, the Court held that the City of
Baltimore could pass its own minimum wage law based on the city's exercise of concurrent
power because the city law did not conflict with the State law.
This packet contains:
Bill 28-17
Legislative Request Report
County Executive veto memo
42 C.F.R.
§
440.70. Home health services
42 C.F.R.
§
440.180. Home and community-based waiver services
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Bill No.
----=2=8-_,_1-=--7_ _ _ __
Concerning: Human Rights and Civil
Liberties - County Minimum Wage -
Amount - Annual Adjustment
Revised:
07/13/2017
Draft No.
_2_
Introduced:
July
25, 2017
Expires:
January
25, 2019
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: ----'N=on'"'"'e"--------
Ch. _ _ , Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Elrich
Co-Sponsors: Councilmembers Leventhal, Riemer, Rucker and Navarro
AN ACT
to:
(1)
increase the County minimum wage by a certain amount;
(2) require the Chief Administrative Officer to adjust the County minimum wage rate
each year;
(3) require the Office of Legislative Oversight to conduct an annual analysis of the
impact of the County minimum wage; and
(4) generally amend the laws governing the minimum wage
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XI. County Minimum Wage
Section 27-68
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XI. County Minimum Wage
Section 27-70A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or de.fined term.
Added to existing law by original bill.
Deleted.from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL No. 28-17
1
Sec 1. Section 27-68 is amended and Section 27-70A is added as follows:
27-68.
(a)
Minimum Wage Required.
County minimum wage.
2
3
4
Except as provided in Subsection (b ), an
employer must pay wages to each employee for work performed in the
County at least the greater of:
(1)
the minimum wage required for that employee under the Federal
5
6
7
8
9
Act
(2)
'
the minimum wage required for that employee under the State
Act; or
10
11
(3)
(b)
[$11.50] $15.00 per hour.
Annual ad;ustment.
The Chief Administrative Officer must adjust the
12
13
14
15
16
17
18
19
minimum wage rate required under Subsection (a)(3), effective July
2023, and July
L
l
of each subsequent year,
~
by
the annual average
increase, if any, in the Consumer Price Index for Urban Wage Earners
and Clerical Workers, CPI-W, or
successor index, for the previous
calendar year. The Chief Administrative Officer must calculate the
adjustment to the nearest multiple of five cents, and must publish the
amount of this adjustment not later than March
l
of each year.
(£}
Exclusions.
The County minimum wage does not apply to an employee
20
21
who:
(1)
is exempt from the minimum wage requirements of the State or
Federal Act;
(2)
is under the age of 19 years and is employed no more than 20
hours per week; or
(3)
[(
c)
]@
22
23
24
25
26
27
is subject to an opportunity wage under the State or Federal Act.
Retaliation prohibited.
A person must not:
(1)
retaliate against any person for:
0
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BILL
NO. 28-17
28
(A)
(B)
lawfully opposing any violation of this Article; or
filing a complaint, testifying, assisting, or participating in
any manner in an investigation, proceeding, or hearing
under this Article; or
29
30
31
32
33
34
35
36
(2)
obstruct or prevent enforcement or compliance with this Article.
*
*
*
27-70A. Annual impact analysis.
The Office of Legislative Oversight must submit
£!
report to the Council, by
January
11
of each year, analyzing the impact of the County minimum wage on the
local economy.
37
38
39
Sec. 2. Transition.
Notwithstanding Section 27-68, as amended in Section 1, except when the
scheduled increases are suspended under subsection ( e), the County minimum wage,
until July 1, 2022, must be the greater of the minimum wage required under the
Federal or State Act or:
(a)
for an employer who employs 26 or more employees:
(1)
(2)
(3)
(b)
effective July 1, 2018, $12.50 per hour;
effective July 1, 2019, $13.75 per hour; and
effective July 1, 2020, $15.00 per hour.
40
41
42
43
44
45
46
47
48
49
for an eligible employer under subsection (c):
(1)
(2)
(3)
(4)
effective July 1, 2018, $12.00 per hour;
effective July 1, 2019, $12.75 per hour;
effective July 1, 2020, $13.50 per hour; and
effective July 1, 2021, $14.25 per hour.
50
51
52
53
54
(c)
An
employer is eligible for the implementation schedule in subsection
(b) if the employer:
(1)
employs 25 or fewer employees;
@
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BILL
No. 28-17
55
56
57
58
59
(2)
has tax exempt status under Section 501(c)(3) of the Internal
Revenue Code; or
(3)
provides:
(A)
"home health services" as defined by 42 C.F.R.
§
440.70
or "home or community-based services" as defined by 42
C.F.R. § 440.180;
(B)
receives at least 75% of gross revenues through state and
federal Medicaid programs; and
(C)
is certified by the Office of Human Rights as meeting the
requirements of subparagraphs (A) and (B).
60
61
62
63
64
65
(d)
For the purposes of subsections (a) and (b), an employer's number of
employees must be calculated based upon the employer's average
number of employees per calendar week during the preceding
calendar year for each week at least one employee worked for
compensation. For employers that did not have any employees during
the preceding calendar year, the employer's number of employees
must be calculated based upon the average number of employees who
worked for compensation per calendar week during the first 90
calendar days of the current year in which the employer engaged in
business.
66
67
68
69
70
71
72
73
74
75
(e)
(1)
On or before January 31 of each year beginning in 2018
through 2022, to ensure that economic conditions can support a
minimum wage increase, the Director of Finance must
determine and certify to the Executive and Council if:
(A)
total private employment for Montgomery County
decreased by 1.5% over the period from April 1 to June
30 of the previous year. The calculation must compare
76
77
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79
80
81
8
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BILL
No. 28-17
82
total private employment in June to total private
employment in April, as reported by the Maryland State
Department of Labor, Licensing, and Regulation's
Quarterly Census of Employment and Wages data series;
(B)
total private employment for Montgomery County
decreased by 2.0% over the period from January
1
to
June 30 of the previous year. The calculation must
compare total private employment in June to total private
employment in January, as reported by the Maryland
State Department of Labor, Licensing, and Regulation's
Quarterly Census of Employment and Wages data series;
(C)
the Gross Domestic Product of the United States, as
published by the U.S. Department of Commerce, has
experienced negative growth for the preceding two
quarters; or
(D)
the National
Bureau of Economic
Research has
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
determined that the United States economy is in
recess10n.
(2)
If, in any year, the Director of Finance certifies that a condition
in subparagraphs (A) through (D) of paragraph (1) occurred, the
Executive may, on or before February 10 of that year, suspend
the minimum wage increases scheduled under subsections (a)
and (b) for that year.
(3)
100
101
102
103
104
105
106
If
the Executive suspends the scheduled mm1mum wage
increases for a year, all dates specified in subsections (a) and
(b) that follow the temporary suspension must be postponed by
an additional year.
107
108
0
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BILL
NO. 28-17
109
11 O
111
112
(4)
The Executive must not suspend scheduled mm1mum wage
increases under this Section more than two times.
Sec. 3.
Effective Date.
This Act takes effect on July I, 2018.
Q
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LEGISLATIVE REQUEST REPORT
Bill 28-17
Human Rights and Civil Liberties
-
County Minimum Wage -Amount
-
Annual Adjustment
DESCRIPTION:
The Bill would increase the County minimum wage that must be paid
to certain employees working in the County for a private sector
employer or the County government to
$15.00
per hour by
2020
for
employers with 26 or more employees. Employers who
(1)
employ
25
or fewer employees
(2)
have tax exempt status under Section
501 (c)(3)
of the Internal Revenue Code; or
(3)
provide "home health
services" or "home or community-based services," as defined under
federal Medicaid regulations and receive at least
75%
of gross
revenues through state and federal medical programs would be
required to pay at least
$15.00
per hour by
2022.
It
would also
require annual adjustments to the County minimum wage each year
beginning in
2023.
The existing County minimum wage of
$11.50
per hour is
insufficient to support a full-time worker in the County, and existing
law does not provide for annual increases based on inflation.
To maintain a reasonable living wage for workers in the County
when the State and federal minimum wage is insufficient.
Human Rights Commission, Office of Management and Budget,
Department of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, Legislative Attorney,
240-777-7892
To be researched.
PROBLEM:
GOALSAND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Class A civil citation and equitable relief.
F:\LAW\BILLS\1728 Minimum Wage - Annual Adjustrnent\LEGISLATIVE REQUEST REPORT.Doc
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
· January 23, 2017
TO:
Roger Berliner;President
County Council
Isiah Leggett, County Executive
Bill 12-16, Human Rights and Civil Liberties-County Minimum
Wage - Amount - Annual Adjustment
FROM:
SUBJECT:
There continues to be a great deal of discussion since the passage of Bill 12-16,
Human Rights and Civil Liberties - County Minimum Wage - Amount - Annual Adjustment,
and my position regarding this bill. I understand that there is a strong interest by some
councilmembers to even reconsider the bill. However this is no longer a possibility since this bill
has been signed and transmitted to the executive branch. At present, I have only three options:
sign the bill and it becomes law as is, not sign the bill and it will go into effect without my
signature or veto the bill. The only way to express my position regarding this bill at this time is
to reluctantly veto and return it to you with what I believe is a more reasonable path to moving
·
the County to a $15 wage.
That said, I wish to congratulate the County CoW1cil on the very full and
thoughtful discussion it held on the bill. In particular, I want to commend Councilmember Eirich
for his commitment to the issue. I respect his very principled position on a matter that is
extremely important to our County and the nation as a whole.
As
I have said on numerous occasions, I support the effort to move toward $15
per hour over an appropriate timeframe and under certain conditions. And that sentiment was
expressed by you and your Council colleagues who voted against the bill. Indeed, the Council
unanimously passed Bill 27-13, the 2013 Minimum Wage bill, and we celebrated together with a
public bill signing ceremony. But this year's effort became much more contentious and divided
resulting in only a 5-4 majority. Many believed it went too far, too fast, and I am disappointed
that we did not find a broader consensus.
It
is my hope that a modified bill can be introduced in the near future and, similar
to the 2013 bill, receive greater support. Such an effort would send a stronger and clearer
·
message to our County and to the rest of the State.
montgomerycountymd.gov/~11 ·,
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.....
Roger Berliner, President
January 23, 2017
Page2
·
While the Council adopted several amendments intended to address some of the
issues I raised in my November 22, 2016 memorandum, I do not believe they went far enough to
address the very serious issues that I am concerned about or to gain more widespread support. I
wish to thank the Council for adopting my recommendation for the so-called "off ramp" to
address concerns about increasing the minimum wage during economic downturns. Other issues,
however, were not addressed satisfactorily.
As mentioned previously, Montgomery County has already put itself in the
forefront on the minimum wage issue and several other initiatives to assist our more vulnerable
residents. Montgomery County's minimum wage is, and will continue to be, higher than both the
federal and State minimum wage, as well as that in
all
surrounding jurisdictions except the
District of Columbia. I remain concerned, however, about the competitive disadvantage Bill 12-
16 would put the County in compared to our neighboring jurisdictions. Additionally, we must
realize that Bill 27-13 would put our County in a different position compared to the few
jurisdictions that have already passed a $15 minimum wage. Unlike Seattle or New York City,
we are not a "destination city" that draws great numbers of business travelers or tourists that will
be able to afford higher costs for short-term visits. Our residents will essentially shoulder the
bulk of the cost. Also, in California the $15 minimum wage does not go effect until 2022, and
there is an additional one-year phase-in for small businesses with less than 26 employees. For
this reason and others, we must act in a more measured way based on the best information
available and the potential unintended negative impacts to Montgomery County.
While some experts may disagree, I believe in an expeditious and timely study of
relevant issues on the fiscal and economic impact of an increase in the minimum wage on
Montgomery County, I maintain that
a
study will better inform the Council on the direct and
indirect impacts on private employers' bottom line as well as the impact on County government.
As you know, there are very few jurisdictions that provide the array of health and human
services to help vulnerable populations at the same level that Montgomery County does. For
example, all things remaining equal, if the Council continues the policy of providing financial
support to our non-profit partners for imposed legislated wage adjustments, when the minimum
wage reaches $15, there will .be a significant financial impact to the County. The County's
budget for Developmental Disability providers alone would be $21.1 million over the current
FYI 7 base of $13.8 million. Based on our current budget projections, this would be a very
difficult amount to absorb, and this does not address the challenge faced by all of our non-profit
partners.
·
Another example of the financial impact of the increase
in
the minimum wage
comes from our Medicaid providers. I will send to you separately a letter and data I received a
few days ago. In sum, they estimate that the move to $15/hour will result in an approximate
5.5% increase
in
the cost of operations each year. Unlike some businesses, Medicaid providers
(i)
_
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Roger Berliner, President
January 23, 2017
Page 3
cannot legally pass these increases on to the consumer and will be unable to absorb the
significant increased costs .
. It is my view that a study addressing these issues can be accomplished in a
relatively short time. I propose that it be completed by no later than July of this year. This study
would give the Council ample time to propose and enact a new bill long before the first new
increment under Bill 12-16 would have taken effect.
In
my November 22, 2016 memorandum,
I
urged the Council to consider a longer
timeframe for raising the County minimum wage, noting that California would not reach $15
until 2022. While the Council provided an extension to 2022 for small employers (25 or fewer
employees), the bill retained 2020 as the date for the County minimum to reach $15/hour for all
other employers. I think that is too fast and believe we should not reach $15/hour for all
employees until 2022. In addition, small employers will be hit particularly hard, and thus should
be exempted entirely from the increased minimum wage requirement.
In summary, for me to
fully
agree with a bill, it should:
Be based on an expeditious study on the direct and indirect financial impacts on private
employers, non-profits and County government;
Include an exemption for small business, the definition of which can be informed by the
study;
Include an exemption for youth workers; and,
Provide for reaching $15/hour in 2022
It
is clear that there is broad support in the community and on the Council for an
increase in the minimum wage to $15/hour. The real questions are how quickly
we get
there and
what exemptions should be made. By adopting a revised bill that addresses these issues, I believe
we can work toward a broader consensus and a better outcome for Montgomery County residents
and businesses.
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§
440.70 Home health services., 42 C.F.R.
§
440.70
Code of Federal Regulations
Title 42. Public Health
Chapter
IV.
Centers for Medicare & Medicaid Services, Department of Health and Human Services (Refs
&Annas)
Subchapter C. Medical Assistance Programs
Part 440. Services: General Provisions (Refs & Annas)
Subpart
A.
Definitions
42 C.F.R.
§
440.70
§
440.70 Home health services.
Effective: July
1, 2016
Currentness
(a) "Home health services" means the services in paragraph (b) of this section that are provided to a beneficiary-
(1)
At his place of residence, as specified in paragraph (c) of this section; and
(2) On his or her physician's orders as part of a written plan of care that the physician reviews every 60 days, except
as specified in paragraph (b
)(3)
of this section.
(b) Home health services include the following services and items. Paragraphs (b)(l),
(2)
and
(3)
of this section are
required services and items that must be covered according to the home health coverage parameters. Services in
paragraph (b )(4) of this section are optional. Coverage of home health services cannot be contingent upon the beneficiary
needing nursing or therapy services.
(1)
Nursing service, as defined in the State Nurse Practice Act, that is provided on a part-time or intermittent basis
by a home health agency as defined in paragraph (d) of this section, or if there is no agency in the area, a registered
nurse who-
(i) Is currently licensed to practice in the State;
(ii) Receives written orders from the patient's physician;
(iii) Documents the care and services provided; and
(iv) Has had orientation to acceptable clinical and administrative recordkeeping from a health department nurse.
(2) Home health aide service provided by a home health agency,
@
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§
440.70 Home health services., 42 C.F.R. § 440.70
(3) Medical supplies, equipment, and appliances suitable for use in any setting in which normal life activities take
place, as defined at§ 440.70(c)(l).
(i)
Supplies are health care related items that are consumable or disposable, or cannot withstand repeated use by
more than one individual, that are required to address an individual medical disability, illness or injury.
(ii) Equipment and appliances are items that are primarily and customarily used to serve a medical purpose, generally
are not useful to an individual in the absence of a disability, illness or injury, can withstand repeated use, and can be
reusable or removable. State Medicaid coverage of equipment and appliances is not restricted to the items covered
as durable medical equipment in the Medicare program.
(iii) A beneficiary's need for medical supplies, equipment, and appliances must be reviewed by a physician annually.
(iv) Frequency of further physician review of a beneficiary's continuing need for the items is determined on a case-
by-case basis, based on the nature of the item prescribed;
(v) States can have a list of preapproved medical equipment supplies and appliances for administrative ease but
States are prohibited from having absolute exclusions of coverage on medical equipment, supplies, or appliances.
States must have processes and criteria for requesting medical equipment that is made available to individuals to
request items not on the State's list. The procedure must use reasonable and specific criteria to assess items for
coverage. When denying a request, a State must inform the beneficiary of the right to a fair hearing.
(4) Physical therapy, occupational therapy, or speech pathology and audiology services, provided by a home
health agency or by a facility licensed by the State to provide medical rehabilitation services. (See § 441.15 of this
subchapter.)
(c) A beneficiary's place of residence, for home health services, does not include a hospital, nursing facility, or
intermediate care facility for individuals with intellectual disabilities, except for home health services in an intermediate
care facility for Individuals with Intellectual Disabilities that are not required to be provided by the facility under subpart
I of part 483. For example, a registered nurse may provide short-term care for a beneficiary in an intermediate care facility
for Individuals with Intellectual Disabilities during an acute illness to avoid the beneficiary's transfer to a nursing facility.
(I)
Nothing in this section should be read to prohibit a beneficiary from receiving home health services in any
setting in which normal life activities take place, other than a hospital, nursing facility; intermediate care facility
for individuals with intellectual disabilities; or any setting in which payment is or could be made under Medicaid
for inpatient services that include room and board. Home health services cannot be limited to services furnished
to beneficiaries who are homebound.
(2) Additional services or service hours may, at the State's option, be authorized to account for medical needs that
arise in the settings home health services are provided.
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---·-----------------·---·--··-··-·-·---··""
(d) "Home health agency" means a public or private agency or organization, or part of an agency or organization,
that meets requirements for participation in Medicare, including the capitalization requirements under§ 489.28 of this
chapter.
§
440.70 Home health services., 42 C.F.R.
§
440.70
(e) A "facility licensed by the State to provide medical rehabilitation services" means a facility that-
(I) Provides therapy services for the primary purpose of assisting in the rehabilitation of disabled individuals through
an integrated program of-
(i) Medical evaluation and services; and
(ii) Psychological, social, or vocational evaluation and services; and
(2) Is operated under competent medical supervision either-
(i) In connection with a hospital; or
(ii) As a facility in which all medical and related health services are prescribed by or under the direction of individuals
licensed to practice medicine or surgery in the State.
(f) No payment may be made for services referenced in paragraphs (b)(I) through (4) of this section, unless the physician
referenced in paragraph (a)(2) of this section or for medical equipment, the allowed non-physician practitioner, as
described in paragraph (f)(3)(ii) through (v), with the exception of certified nurse-midwives, as described in paragraph
(f)(3)(iii) documents that there was a face-to-face encounter with the beneficiary that meets the following requirements:
(I) For the initiation of home health services, the face-to-face encounter must be related to the primary reason the
beneficiary requires home health services and must occur within the 90 days before or within the 30 days after the
start of the services.
(2) For the initiation of medical equipment, the face-to-face encounter must be related to the primary reason the
beneficiary requires medical equipment and must occur no more than 6 months prior to the start of services.
(3) The face-to-face encounter may be conducted by one of the following practitioners:
(i) The physician referenced in paragraph (a)(2) of this section;
(ii) A nurse practitioner or clinical nurse specialist, as those terms are defined in section 1861(aa)(5) of the Act,
working in collaboration with the physician referenced in paragraph (a) of this section, in accordance with State law;
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§
440.70 Home health services., 42 C.F.R.
§
440.70
(iii) A certified nurse midwife, as defined in section 186l(gg) of the Act, as authorized by State law;
(iv)
A
physician assistant, as defined in section 186l(aa)(5) of the Act, under the supervision of the physician
referenced in paragraph (a) of this section; or
(v) For beneficiaries admitted to home health immediately after an acute or post-acute stay, the attending acute
or post-acute physician.
(4) The allowed non-physician practitioner, as described in paragraph (f)(3)(ii) through (v) of this section,
performing the face-to-face encounter must communicate the clinical findings of that face-to-face encounter to the
ordering physician. Those clinical findings must be incorporated into a written or electronic document included in
the beneficiary's medical record.
(5) To assure clinical correlation between the face-to-face encounter and the associated home health services, the
physician responsible for ordering the services must:
(i) Document the face-to-face encounter which is related to the primary reason the patient requires home health
services, occurred within the required timeframes prior to the start of home health services.
(ii) Must indicate the practitioner who conducted the encounter, and the date of the encounter.
(6) The face-to-face encounter may occur through telehealth, as implemented by the State.
(g)(l) No payment may be made for medical equipment, supplies, or appliances referenced in paragraph (b )(3) of this
section to the extent that a face-to-face encounter requirement would apply as durable medical equipment (DME) under
the Medicare program, unless the physician referenced in paragraph (a)(2) of this section or allowed non-physician
practitioner, as described in paragraph (f)(3)(ii) through (v) of this section documents a face-to-face encounter with the
beneficiary consistent with the requirements of paragraph (f) of this section except as indicated in paragraph (g)(2) of
this section.
(2) The face-to-face encounter may be performed by any of the practitioners described in paragraph (f)(3) of this
section, with the exception of certified nurse-midwives, as described in paragraph (f)(3)(iii) of this section.
Credits
[43 FR 45224, Sept. 29, 1978, as amended at 45 FR 24888, April 11, 1980; 62 FR 47902, Sept. 11, 1997; 62 FR 49726,
Sept. 23, 1997; 63 FR 310, Jan. 5, 1998; 81 FR 5566, Feb. 2, 2016]
SOURCE: 43 FR 45224, Sept. 29, 1978; 51 FR 41338, Nov. 14, 1986; 77 FR 29028, May 16, 2012, unless otherwise noted.
AUTHORITY: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
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§
440.70 Home health services., 42 C.F.R.
§
440.70
Notes of Decisions (35)
Current through
July
6, 2017; 82 FR 31277.
End of Document
©
2017 Thomson Reuters. No claim to original U.S. Government Works.
@
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§
440.180 Home and community-based waiver services., 42
C.F.R.
§
440.180
Code of Federal Regulations
Title
42.
Public Health
Chapter IV. Centers for Medicare & Medicaid Services, Department of Health and Human Services (Refs
&Annos)
Subchapter C. Medical Assistance Programs
Part
440.
Services: General Provisions (Refs & Annos)
Subpart
A
Definitions
42
C.F.R.
§
440.180
§
440.180
Home and community-based waiver services.
Effective: March
17, 2014
Currentness
(a) Description and requirements for services. "Home or community-based services" means services, not otherwise
furnished under the State's Medicaid plan, that are furnished under a waiver granted under the provisions of part 441,
subpart G of this chapter.
(1) These services may consist of any or all of the services listed in paragraph (b) of this section, as those services
are defined by the agency and approved by
CMS.
(2) The services must meet the standards specified in § 441.302(a) of this chapter concerning health and welfare
assurances.
(3) The services are subject to the limits on FFP described in§ 441.310 of this chapter.
(b) Included services. Home or community-based services may include the following services, as they are defined by the
agency and approved by CMS:
(I)
Case management services.
(2) Homemaker services.
(3) Home health aide services.
(4) Personal care services.
(5) Adult day health services.
(6) Habilitation services.
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§
440.180 Home _and community-based waiver services., 42 C.F.R.
§
440.180
(7)
Respite care services.
(8) Day treatment or other partial hospitalization services, psychosocial rehabilitation services and clinic services
(whether or not furnished in a-facility) for individuals with chronic mental illness, subject to the conditions specified
in paragraph (d) of this section.
(9) Other services requested by the agency and approved by CMS as cost effective and necessary to avoid
institutionalization.
(c) Expanded habilitation services, effective October 1, 1997-
(1)
General rule. Expanded habilitation services are those services specified in paragraph (c)(2) of this section.
(2) Services included. The agency may include as expanded habilitation services the following services:
(i) Prevocational services, which means services that prepare an individual for paid or unpaid employment and that
are not job-task oriented but are, instead, aimed at a generalized result. These services may include, for example,
teaching an individual such concepts as compliance, attendance, task completion, problem solving and safety.
Prevocational services are distinguishable from noncovered vocational services by the following criteria:
(A) The services are provided to persons who are not expected to be able to join the general work force or
participate in a transitional sheltered workshop within one year (excluding supported employment programs).
(B)
If
the beneficiaries are compensated, they are compensated at less than 50 percent of the minimum wage;
(C) The services include activities which are not primarily directed at teaching specific job skills but at
underlying habilitative goals (for example, attention span, motor skills); and
(D) The services are reflected in a plan of care directed to habilitative rather than explicit employment
objectives.
(ii) Educational services, which means special education and related services (as defined in sections 602(16) and (17)
of the Education of the Handicapped Act) (20 U.S.C. 1401 (16 and 17)) to the extent they are not prohibited under
paragraph (c)(3)(i) of this section.
(iii) Supported employment services, which facilitate paid employment, that are-
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§
440.180 Home and community-based waiver services., 42 C.F.R.
§
440.180
(A) Provided to persons for whom competitive employment at or above the minimum wage is unlikely and
who, because of their disabilities, need intensive ongoing support to perform in a work setting;
(B) Conducted in a variety of settings, particularly worksites in which persons without disabilities are employed;
and
(C)
Defined as any combination of special supervisory services, trammg, transportation, and adaptive
equipment that the State demonstrates are essential for persons to engage in paid employment and that are not
normally required for nondisabled persons engaged in competitive employment.
(3) Services not included. The following services may not be included as habilitation services:
(i) Special education and related services (as defined in sections 602(16) and (17) of the Education of the
Handicapped Act) (20 U.S.C. 1401 (16) and (17)) that are otherwise available to the individual through a local
educational agency.
(ii) Vocational rehabilitation services that are otherwise available to the individual through a program funded under
section 110 of the Rehabilitation Act of 1973 (29 U.S.C. 730).
(d) Services for the chronically mentally
ill-
(1)
Services included. Services listed
in
paragraph (b)(8) of this section include those provided to individuals who
have been diagnosed as being chronically mentally
ill,
for which the agency has requested approval as part of either
a new waiver request or a renewal and which have been approved by CMS on or after October 21, 1986.
(2) Services not included. Any home and community-based service, including those indicated in paragraph (b)(8) of
this section, may not be included in home and community-based service waivers for the following individuals:
(i) For individuals aged 22 through 64 who, absent the waiver, would be institutionalized in an institution for mental
diseases (IMD); and, therefore, subject to the limitation on IMDs specified in§ 435.1009(a)(2) of this chapter.
(ii) For individuals, not meeting the age requirements described
in
paragraph (d)(2)(i) ohhis section, who, absent
the waiver, would be placed in an IMD in those States that have not opted to include the benefits defined
in
§
440.140 or§ 440.160.
Credits
[46 FR 48540, Oct. 1, 1981; 50 FR 10026, March 13, 1985; 59 FR 37716, July 25, 1994; 65 FR 60107, Oct. 10, 2000; 71
FR 39229, July 12, 2006; 72 FR 38690, July 13, 2007; 79 FR 3029, Jan. 16, 2014]
SOURCE: 43 FR45224, Sept. 29, 1978; 51 FR41338, Nov.14, 1986; 77 FR29028,May 16, 2012, unless otherwise noted.
WESTL4/,
(i;_::2C',7 --
,.._·.:
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§
440.180 Home and community-based waiver services., 42 C.F.R. § 440.180
AUTHORITY: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
Notes of Decisions (19)
Current through July 6, 2017; 82 FR 31277.
End of Document
©
2017 Thomson Reuters. No claim to original U.S. Government Works.
4
®