Moving the HME Industry Forward

General Healthcare

The Federal Employment Law is Changing in December 2016

July 4, 2016

AMARILLO, TX – Many of your companies have classified certain managers, assistant managers, and key personnel as “exempt” from the current overtime laws. Under the current law, an employee who is paid a predetermined and fixed annual salary of $23,660 which is not subject to reduction because of variations in the quantity or quality of work, and who performs certain exempt duties, can be paid a regular salary, regardless of the number of hours the employee works each week. This law allows employers to entrust certain employees with significant responsibilities without concern about whether that employee should be paid overtime for working extra hours to get the job done.

However, effective December 1, 2016, the law will change to the detriment of most employers.  Under the new overtime regulations, an “exempt” administrative, executive, or professional employee not subject to overtime pay requirements must be paid an annual salary of at least $47,476.  This is a significant increase from the current requirement of $23,660.  In addition to this new “salary basis test,” an employee must still perform exempt duties.  This “duties test” is unchanged under the new regulations.

But, many employers might appreciate a quick refresher on the administrative, executive, and professional duties tests employees must meet in order to be exempt from federal overtime regulations:

Administrative Exemption:  The employee must regularly exercise independent judgment and discretion in matters of significance.  In addition, the employee’s main duty must be performing office or non-manual work directly related to running or servicing the business.  For example, Human Resources managers, accounting personnel, and employees in charge of purchases or procurement often qualify for the administrative exemption.

Executive Exemption:  The employee must have the authority to hire or fire other employees (or at least have input on the hiring, firing, and promotion of employees) and must regularly manage at least two other employees.  In addition, the employee’s main duty must be to manage the business or a department or subdivision of the business.  For example, call center managers and department managers often qualify for the executive exemption.

Professional Exemption:  The employee must have advanced knowledge in a field of science or learning, and must have received specialized academic training.  Usually, this means the employee holds a degree.  In addition, the employee must perform work requiring consistent exercise of discretion and judgment.  For example, pharmacists, doctors, and physician assistants often qualify for the professional exemption.

Many employees working in the healthcare setting qualify for one of the above exemptions.  However, employees must both perform exempt duties and be paid a salary of at least $47,476 to qualify as of December 2016.  Given the upcoming changes in the law, now is a good time to review your job descriptions and pay practices to determine whether your employees are properly classified.

Brad Howard is a health care and employment law attorney with Brown & Fortunato PC specializing in governmental investigations, litigation, including mediation and regulatory arbitration of disputes, compliance, and general business matters. He can be reached at 806.345.6310 or  

Jeff Baird will be presenting the following webinars:
Buying and Selling a DME Supplier
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Tuesday, July 12, 2016
2:30-4:00 p.m. EASTERN TIME
When a person intends to buy…or sell…a DME supplier, there are a number of documentation and regulatory issues that must be addressed.  First, the seller must take a number of steps to make itself more “attractive.”  The buyer and seller need to decide whether the transaction will be an “asset” sale or a “stock” sale.  The parties will need to engage in the normal transactional steps: mutual nondisclosure agreement, letter of intent, stock purchase agreement/asset purchase agreement, and other closing documents.  The buyer will need to engage in three types of due diligence: financial, corporate and regulatory.  And the parties will need to meet a number of regulatory requirements such as submitting change of ownership notifications.  This program will discuss all of these (and other) issues associated with the purchase and sale of a supplier.

Register for Buying and Selling a DME Supplier on Tuesday, July 12, 2016, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.
Contact Ika Sukh at if you experience any difficulties registering.
FEES: Member: $99.00    
Non-Member: $129.00

Webinar sponsored by PA Association of Medical Suppliers
Distancing Ourselves From Medicare Fee-For-Service
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Wednesday, July 13, 2016
3:00-4:30 p.m. EASTERN TIME
On June 23, 2016, CMS published the July Fee Schedule for DME suppliers. The rates encompass the expansion of competitive bid rates to non-CBAs. The cuts range between 45%-59% on common respiratory products, but reach 82% on TENS units and Enteral IV Poles. Said another way, the rates are ugly. This is an additional “wake-up call” to the DME industry: As much as possible, suppliers need to distance themselves from Medicare fee-for-service. This webinar will discuss ways that the DME supplier can accomplish this. For example, the supplier can elect to be nonparticipating and provide DME on a non-assigned basis. The supplier can work with hospitals to reduce the incidences of readmissions of patients soon after discharge; to accomplish this, the supplier and a hospital can jointly own a DME operation….or the supplier and the hospital can enter into a collaborative agreement in which the supplier serves as the hospitals “preferred provider” and the supplier agrees to work closely with the patient and his caregiver following discharge. The supplier can, and should, focus on selling products for cash in a retail setting. And yet another approach the supplier can take is to furnish DME that provides a higher profit and discontinue furnishing DME that is unprofitable.

Register now for “Distancing Ourselves From Medicare Fee-For-Service” on Wednesday, July 13, 2016, 3:00-4:30 p.m. ET, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.
FEES: Member: $59.00    
Non-Member: $89.00

Responding to Reimbursement Cuts: Billing Non-Assigned and other Options
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Wednesday, July 27, 2016
2:30-4:00 p.m. EASTERN TIME
We now know what Medicare reimbursement is……and it is not pretty. The bottom line is that Medicare will pay as little as possible for DME. And yet, with 78 million Baby Boomers retiring at the rate of 10,000 per day, the demand for DME will dramatically increase. This webinar will primarily focus on billing on a non-assigned basis. Specific issues to be addressed include: (i) What does it mean to bill non-assigned? (ii) If the supplier bills an item non-assigned, then can the supplier set the price without limitations? (iii) Can a supplier bill a rental item non-assigned? If so, can the supplier demand a purchase price up front or is the supplier obligated to take rental payments from the patient? (iv) If the supplier bills non-assigned, then is it required to submit a claim for reimbursement on behalf of the patient? (v) If a supplier is a non-contract supplier providing competitive bid products on a non-assigned basis in a CBA, must the supplier utilize an ABN? (vi) If a supplier provides products, on a non-assigned basis, to patients residing outside a CBA, must the supplier utilize an ABN? (vii) If a supplier provides a rental item on a non-assigned basis, and receives monthly rental payments from the patient, is one ABN at the beginning sufficient or must the supplier utilize an ABN every month? In addition to non-assigned billing issues, the webinar will discuss other options for the supplier to lessen its dependence on Medicare fee-for-service.

Contact Ika Sukh at for registration information.