Our parents are aging. Many of them need or will need assistance to "age in place." For those with health problems, home "healthcare" that is subsidized by Medicare or Medicaid has always been available. For those who are blessed to age without significant health problems, non-medical or companionship care will be the option many families use to support their aging parents.
Will it be cheaper? Maybe not. Non-medical home care services and the firms that provide it are intensely regulated. And, unlike home "healthcare," companionship care is totally unsubsidized and thus paid completely out of pocket.
A relatively new law and related regulations proposed by the state in August 2017, threaten to significantly increase the cost of non-medical home care. The state has turned a blind eye to these cost increases and the additional red-tape will do nothing to improve elder care or safety.
Non-medical home care service agencies are no strangers to government regulation. In fact, these New Jersey agencies have been governed by statute and regulation since 2004. However, it is a 2014 law, N.J.S.A. 34:8-45.1, that expanded the scope of the requirements governing these businesses, by adding an "accreditation" element and requiring audits by CPAs that threatens to drive the cost of senior citizen home care way up.
In late August, the NJ Division of Consumer Affairs ("DCA") proposed new regulations, PRN 2017-201, to implement this 2014 law; and, if adopted, the regulations will have an undue economic impact on the operations of these non-medical firms.
The non-medical home care provider is the quintessential small business. New Jersey small businesses, are guaranteed statutory protection from strangulation by red tape. The Administrative Procedures Act ("APA") requires any agency proposing a new rule for adoption "shall utilize approaches that will accomplish the objectives of applicable statutes while minimizing any adverse consequences to small businesses of different types and of differing sizes." N.J.S.A. 52:14B-18. PRN 2017-201 fails this test.
By law, all new regulations must include and publish an economic impact analysis. Here, the analysis provided by the state falls somewhere between incomplete and useless. Its conclusion that the impact of accreditation is $2,500 per year is at best a "guesstimate" and that "costs (will be) incur(red) in preparing an audit for the Division every three years," never comes close to meeting the statutory threshold to justify added requirements.
New laws and regulations virtually never decrease the cost of doing business. When non-medical home care agencies became regulated in 2004, the cost of compliance doubled. The 2014 law is no different. It created new obligations; and with them, significant new costs.
The 2014 law requires that homecare agencies obtain and maintain an "accreditation" from some third-party and demanded CPAs conduct financial audits every three years. The scope of the "audits" is undefined and is unheard of for businesses that do not receive some form of government subsidy. The state has utterly failed to demonstrate how its vaguely stated goal of achieving an "assurance that homecare agencies are prepared to offer services in a safe and effective manner" will be met by either an audit or an accreditation certificate.
The cost impact of these additional, administrative burdens necessarily will be passed onto the elderly consumers, who in turn will be forced to spend down assets at a quicker rate. Many will be forced onto Medicaid, creating a substantial and additional financial obligation to the state. The economic impact analysis published by the state completely ignores this potential result.
Previously published on October 19, 2017 on the Daily Record
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