Law In Limbo: Judge Halts Overtime Rule, Fate Uncertain
The new overtime rule, just days away from going into effect, was temporarily blocked by a Texas judge last week. The ruling, in concert with the upcoming change in the Oval Office, makes the rule’s fate murkier than ever.
Employers are now faced with a dilemma: do they move forward with changes they’d already implemented to comply with the rule? Or do they take a wait-and-see approach?
Details on the ruling, from the Wall Street Journal:
On Tuesday, Judge Amos Mazzant in Texas ruled in favor of the challengers, writing in an order that in setting the automatic salary increases, “the department exceeds its delegated authority and ignores Congress’s intent.”
The preliminary injunction essentially halts the implementation of a rule that would have required employers to start paying overtime to workers earning salaries of less than $47,476 a year, making millions more workers eligible for time-and-a-half pay.
Nearly two dozen states and a coalition of business groups filed two separate lawsuits to overturn the regulation, alleging that the government had overstepped its authority, including by stipulating that the $47,476 salary threshold would automatically increase every three years. The complaints were consolidated into a single case.
NPR talked to a CPA in Ohio about what he’s telling clients about how to move forward in the wake of the injunction. From NPR:
Well, first off, it’s a temporary halt. Plus, I’d like to point out that the law was not approved by Congress. It was enacted through an executive order by President Obama. And we have been under the belief that there will probably be some type of changes with a new administration since it was not congressionally approved.
I mean, we’re telling [clients], you need to now have time sheets for employees. You need to not just write eight hours each day. You need to record the time that they came in, the time that they went to lunch, the time they came back from lunch.
And we have told them some options. You know, if your employee is close to making the 47,500, you can give them a pay increase. You can do what our firm has done and put everybody on an hourly rate. If they are working 60 hours a week regularly on salary, their hourly rate just has to be above the federal minimum wage.
Video courtesy of PBS Newshour
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Fitch: Private Equity, Foreign Investors Swoop In On Senior Housing
Non-traditional buyers are swooping in to buy U.S. healthcare real estate, including senior housing, according to a Fitch report released last week. These investors come as the largest REITs offload skilled nursing facilities in their portfolios.
Foreign investors are increasingly looking to invest in US healthcare real estate, particularly those with longer term horizons such as sovereign wealth funds, pension funds and insurance companies.
Increasing institutionalization of healthcare real estate would be a credit positive for REITs to the extent it improves asset liquidity and financeability. These positive implications are tempered by the possibility that the rise of less-seasoned buyers as the highest bidders is a counterintuitive signal of peaking values and an aging cycle, as it has been in other sectors’ cycles.
REITs continued to dispose of skilled nursing facilities in third-quarter 2016 amid operator challenges, and the purchases by owner-operators and healthcare-focused funds likely reflect a disconnect between public and private market valuations.
This was a topic of discussion at the 2016 NIC Fall Conference, where one of the panelists was a senior official at PSP Investments, the $130 billion entity that manages money for one of Canada’s largest pension funds.
PSP is typically on the cutting edge of institutional investing; if it’s showing an interest in U.S. senior housing, it’s likely other mammoth institutions are thinking the same way.
Here’s what a senior VP at PSP had to say about the senior housing market at the NIC Fall Conference:
“The demographics are compelling,” said Neil Cunningham, senior vice president, global head of real estate investments, PSP Investments, a $130 billion fund that manages the pension assets of the Canadian armed services and public service employees. “We’ve made a tactical allocation to overweight U.S. seniors housing.”
Seniors housing has gained more acceptance among institutional investors, noted Cobb of Hamilton Lane, though she added that investors still need to be educated about the product. Cunningham believes that as transparency improves and the seniors housing market becomes better known, it will be a standard part of a portfolio because of the quickly aging population.
As an investor, Cunningham at PSP wants the operator to have at least a 20% investment in the property. With a stake in the project, the operator will have a solid knowledge of the market and submarkets, he said.
Institutional interest will only increase as transparency grows around performance metrics and institutional investment staff become more comfortable with the market.
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In Preventative Care, An Opportunity for Operators: Report
Potential opportunities await senior housing operators who adjust their business models to shift more focus to preventative care, according to a report published this month from Alvarez & Marsal.
Preventative care — whether it’s managing ambulatory care sensitive conditions, reducing fall risk or leveraging smart home technology — could lead to higher profits for operators.
In a blog post, NIC offers the sparknotes version of the 95-page report:
The mammoth report, titled Post-Acute Care: Disruption (and Opportunities) Lurking Beneath the Surface, dives deeper into the subject:
Aging demographics, combined with an opportunity to either directly or indirectly increase engagement in preventive care, increases the relative attractiveness of the senior housing market segment.
The age of senior housing residents suggests an opportunity to increase engagement in resident health and wellness. Opportunities exist to reduce the frequency of ambulatory care sensitive hospital admissions; i.e., those amenable to prevention. Elderly residents often have multiple chronic conditions. Given their knowledge of resident medical history and prescription drug use, and their ability to identify changes in physical and mental status, as well as activity levels, senior housing personnel are well positioned to serve as an “early warning” system for other providers to diagnose, manage and treat a variety of chronic conditions subject to acute deterioration. Improved health is likely to prolong life expectancy; i.e., residence time.
Technology can potentially serve as an important adjunct for the identification of changes in resident status, as well convenient provider access. Smart home technology, also known as the “internet of things,” can monitor activity levels and the environment. Passive and active sensors can monitor physiologic parameters, location and position. Fall prevention is critical to not only residents, but also liability. Remote monitoring of blood pressure, heart rate, respiratory rate, temperature and weight is desirable, especially for patients with more than four to five chronic conditions, the threshold for rising Medicare costs. And lastly, telemedicine represents a convenient and cost-effective method to triage patients.
Read the full report here
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Overtime Rule, Value-Based Care and More: What Trump Means for Senior Living
In just under two months, president-elect Donald Trump will take his seat in the Oval Office.
Senior living providers, along with everyone else, are waiting to see what the Trump presidency means for them.
In waiting for a President who has been light on policy specifics, informed speculation is all that’s possible.
The Overtime Rule
One big issue for senior living operators is certainly the Department of Labor’s overtime rule, which goes into effect on December 1 — but which may face a cold reception from the new administration.
He could try to repeal it himself, or through legislation, but that process could take a while — if it works at all. From Politico:
In theory, says Judy Conti, federal advocacy coordinator for the National Employment Law Project, the Trump administration could propose a new regulation undoing the old one. But that would require a notice and comment period that could last a year or more, and to comply with the Administrative Procedures Act Trump’s Labor Department would have to demonstrate a change in economic circumstances.
Congressional Republicans could introduce legislation to block the rule — but that, Conti said, wouldn’t likely survive a filibuster challenge from Senate Democrats.
Some Republicans might not go for a repeal, either, because the overtime rule polls well across party aisles — a majority of Republican voters like the rule.
The two most likely scenarios:
- The rule gets scaled back, but not repealed entirely. For example, the salary threshold for overtime could get rolled back.
- The rule is here to stay.
The Affordable Care Act as we know it very clearly appears to be in jeopardy — but that doesn’t necessarily mean a repeal of the specific provisions that so heavily incentivize value-based care.
Lawmakers in 2015 showed serious bi-partisan support for Medicare payment reform when the Senate passed MACRA by a 92-8 margin.
Over at RevCycle Intelligence, Jennifer Bresnick has penned a lengthy and comprehensive guide to how Trump might — or might not — affect value-based care. An excerpt:
The overwhelming approval of MACRA, coupled with across-the-aisle commitments to health IT development issues ranging from cybersecurity and interoperability to timeline changes easing the burdens of meaningful use, indicate that lawmakers are more united than divided on the importance of healthcare payment and technology reform.
This likely bodes well for providers who have made financial commitments to electronic health records, population health management tools, and other health IT infrastructure intended to help them succeed in a value-based environment.
None of these investments will be wasted – in fact, they may help prepare providers for a very lean operating environment after the likely removal of Medicaid expansion funds and a potentially sharp increase in self-pay patients keen to avoid unnecessary services, costly errors due to improperly informed decisions, and repetitious tests.
The whole article is worth reading.
Affordable Senior Housing
One of Trump’s clearest policy proposals has been to cut non-defense spending by 1 percent every year. That means affordable senior housing could be on the chopping block, via cuts to programs offering Section 8 housing, rent assistance or tax credits.
Diane Yentel, president of the National Low Income Housing Coalition, wrote an open letter speculating what housing policy might look like under the new Congress:
We will see efforts to lower domestic non-defense spending and to implement much of Speaker Ryan’s anti-poverty agenda, which could include welfare reform-type changes such as work requirements and time limits to all anti-poverty programs. Congress will move quickly to enact comprehensive tax reform – legislative drafts are already being written – that dramatically lowers corporate and individual tax rates by reducing or eliminating tax expenditures and credits, possibly including the Low Income Housing Tax Credit.
Reform of the mortgage interest deduction (MID) is on the table as another “pay-for” to lower tax rates. We’ll need to pull out all the stops to ensure that savings from MID reform are reinvested into affordable rental housing programs. The Republican Congress may also work towards dismantling Fannie Mae and Freddie Mac.
That brings us to the national Housing Trust Fund, which may be threatened from multiple angles. I expect efforts by House Republicans to eliminate the HTF to resurface quickly, and we could again see appropriators attempt to fill HUD budget holes with HTF dollars. FHFA Director Mel Watt could be replaced by someone who shares former FHFA Director DeMarco’s view that contributions to the HTF should be suspended while Fannie and Freddie remain in receivership.
Of course, much depends on who Trump appoints to lead the Department of Housing and Urban Development (HUD). Yentel covers the cast of candidates:
There are a few former HUD alumni from the Bush administrations working on the transition team, and several names have moved to the top of the short list for HUD secretary. Among them are Pam Patenaude, president of the Terwilliger Foundation for Housing America’s Families, and former Senator Scott Brown, who also serves on the Terwilliger Center’s executive committee. Both Ms. Patenaude and Senator Brown have deep knowledge of, experience with, and proven commitments to affordable housing. Both would be excellent choices.
Also on the shortlist for HUD secretary, however, are Westchester County Executive Rob Astorino, who has spent over a decade fighting his obligations under the Fair Housing Act, and Ken Blackwell, a senior fellow at the Family Research Council. Who President-elect Trump decides to nominate will give us important insights into his priorities for housing programs.
Read the full letter here.
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Dementia Rates Decline Sharply Among Senior Citizens
This story was originally published by Kaiser Health News, a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.
A new study finds that the prevalence of dementia has fallen sharply in recent years, most likely as a result of Americans’ rising educational levels and better heart health, which are both closely related to brain health.
Dementia rates in people over age 65 fell from 11.6 percent in 2000 to 8.8 percent in 2012, a decline of 24 percent, according to a study of more than 21,000 people across the country published Monday in JAMA Internal Medicine.
“It’s definitely good news,” said Dr. Kenneth Langa, a professor of internal medicine at the University of Michigan and a coauthor of the new study. “Even without a cure for Alzheimer’s disease or a new medication, there are things that we can do socially and medically and behaviorally that can significantly reduce the risk.”
The decline in dementia rates translates to about one million fewer Americans suffering from the condition, said John Haaga, director of behavioral and social research at the National Institute on Aging, part of the National Institutes of Health, which funded the new study.
Dementia is a general term for a loss of memory or other mental abilities that’s severe enough to interfere with daily life. Alzheimer’s disease, which is believed to be caused by a buildup of plaques and tangles in the brain, is the most common type of dementia. Vascular dementia is the second most common type of dementia and occurs after a stroke.
The new research confirms the results of several other studies that also have found steady declines in dementia rates in the United States and Europe. The new research provides some of the strongest evidence yet for a decline in dementia rates because of its broad scope and diverse ranges of incomes and ethnic groups, Haaga said. The average age of participants in the study, called the Health and Retirement Study, was 75.
The study, which began in 1992, focuses on people over age 50, collecting data every two years. Researchers conduct detailed interviews with participants about their health, income, cognitive ability and life circumstances. The interviews also include physical tests, body measurements and blood and saliva samples.
While advocates for people with dementia welcomed the news, they noted that Alzheimer’s disease and other forms of memory loss remain a serious burden for the nation and the world. Up to five million Americans today suffer from dementia, a number that is expected to triple by 2050, as people live longer and the elderly population increases.
The number of Americans over age 65 is expected to nearly double by 2050, reaching 84 million, according to the U.S. Census. So even if the percentage of elderly people who develop dementia is smaller than previously estimated, the total number of Americans suffering from the condition will continue to increase, said Keith Fargo, director of scientific programs and outreach, medical and scientific relations at the Alzheimer’s Association.
“Alzheimer’s is going to remain the public health crisis of our time, even with modestly reduced rates,” Fargo said.
Although researchers can’t definitively explain why dementia rates are decreasing, Langa said doctors may be doing a better job controlling high blood pressure and diabetes, which can both boost the risk of age-related memory problems. High blood pressure and diabetes both increase the risk of strokes, which kill brain cells, increasing the risk of vascular dementia.
“We’ve been saying now for several years that what’s good for your heart is good for your head,” Fargo said. “There are several things you can do to reduce your risk for dementia.”
Authors of the study found that senior citizens today are better educated than even half a generation ago. The population studied in 2012 stayed in school 13 years, while the seniors studied in 2000 had about 12 years of education, according to the study.
That’s significant, because many studies have found a strong link between higher educational levels and lower risk of disease, including dementia, Lang said. The reasons are likely to be complex. People with more education tend to earn more money and have better access to health care. They’re less likely to smoke, more likely to exercise and less likely to be overweight. People with more education also may live in safer neighborhoods and have less stress.
People who are better educated may have more intellectually stimulating jobs and hobbies that help exercise their brains, Lang said.
It’s also possible that people with more education can better compensate for memory problems as they age, finding ways to work around their impairments, according to an accompanying editorial by Ozioma Okonkwo and Dr. Sanjay Asthana of the University of Wisconsin School of Medicine and Public Health.
Yet Americans shouldn’t expect dementia rates to continue falling indefinitely, Haaga said.
Although educational levels increased sharply after the World War II, those gains have leveled off, Haaga said. People in their 20s today are no more likely to have graduated from college compared to people in their 60s.
“We have widening inequality in health outcomes in the U.S.,” Haaga said. “For people without much education, we’ve had very little improvement in health. The benefits really have gone to those with better educations.”
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