Did New Mexico DOH Know DD Waiver Provider Is Being Sued In Class Action Federal Suit For Failing to Pay Overtime to Direct Caregivers?

When a group of Las Cruces area direct care workers at Quality Life Services, LLC were paid as “independent contractors” they were denied being paid overtime – despite routinely working more than 40 hours a week.

Misclassification of an employee as an “independent contractor” is a violation of labor law.

Yet, a consultant for the New Mexico Department of Health’s Developmental Disabilities Support Division (DDSD) wrote in a rate study report regarding rates paid to provider agencies, like and including the one being sued, that, “Ensuring compliance with labor laws is not the responsibility of DDSD … ”

And, while writing in its report that DDSD is supposed to ensure adequate reimbursement for the cost of services for Developmental Disability Waiver participants, the consultant doubled down on its assessment that “DDSD does not have the responsibility to ensure providers follow labor laws.“

Is this a matter of “see no evil, hear no evil, speak no evil?”

Or maybe “ignorance is bliss?”

Well, this group of direct care workers, most of whom are paid at the lower end of the pay scales in New Mexico, are fighting back – regardless of the apparent indifference of state officials to the financial abuse by a business that the Department of Health contracts with for services to DD Waiver folks.

On or about August 3, 2022, they filed a lawsuit in U.S. District Court, District of New Mexico (Las Cruces), referred to as Golden v. Quality Life Services, LLC et al, CASE #: 2:22-cv-00579-GJF-GBW. (A copy of the Direct Care Workers’ Amended Complaint can be found at the end of this article.)

And last week, those direct care workers received a green light from United States Magistrate Judge Gregory J. Fouratt to litigate the matter as a class action for:

“All current and former Direct Support Personnel staff members of Quality Life Services, LLC, April Licon, and/or Sally Chavez who worked over forty hours during any week from August 3, 2019, to the present and who were not paid overtime wages for overtime hours worked.”

(A copy of the Court’s Order Approving the Class Action Status of the lawsuit can also be found at the end of this article.)

DOH Hires PCG About Same Time Lawsuit Filed

In September of 2023, the New Mexico Department of Health (DOH) entered into a contract with Public Consulting Group LLC, A wholly owned Subsidiary of Public Consulting Group Holding, Inc., (PCG), to conduct a rate study and a capacity study relative to “services for individuals with intellectual and developmental disabilities receiving services through both the Developmental Disabilities (DD) and Mi Via (MV) Waiver programs including cost of living annual adjustments.“

This was about a month after the direct care workers filed the federal lawsuit.

The Developmental Disabilities Support Division (DDSD) was the lead DOH division agency to work with PCG on both of the studies.

PCG was to receive $500,000 for the rate study and another $250,000 for the capacity study.

As far as PCG and the DOH are concerned, both the studies are completed, and it is assumed that PCG has been paid in full.

The reports that PCG, particularly the rate study has been criticized by provider agencies as not recommending a sufficient increase to enable them to adequately serve the state’s DD Waiver clients.

There are multiple types of providers that the rate study covered. And some of the provider groups seem happy with the rate increases suggested.

However, the rates recommended by PCG that cover the positions of direct care in home workers appear to have been established by blending “employee” status data with “independent contractor” data.

The use workers as employees but classifying them as independent contractors to avoid a number of related expenses is more than just problematic – it sets up provider agencies to potentially break the labor laws – such as situation being tried in the overtime pay case against the DOH provider referenced in the federal lawsuit above.

(The Candle is preparing another story which analyzes the two PCG studies more closely. It is expected to be released next week.)

Was the DOH Contractor Clueless? Or Did DOH Withhold Information?

The Department of Health’s Developmental Disabilities Supports Division uses a “Provider
Agreement” which serves as a binding agreement between the DEPARTMENT and the PROVIDER to serve persons eligible for Medicaid reimbursed services through the Developmental Disabilities (DD), Medically Fragile (MF) and/or Supports Medicaid Waiver programs.

The typical agreement requires notification by the PROVIDER to the Office of General Counsel of DOH as follows: “In the event that any action, suit or proceeding related to the service PROVIDER is initiated, the PROVIDER as soon as practical, but no more than two (2) working days after notice of such action, suit or proceeding, shall notify the Office of General Counsel of the DEPARTMENT by certified mail.”

The Candle is waiting on a response to an Inspection of Public Records Act (IPRA) request for a copy of the notification that Quality Life Services, LLC should have provided the DOH General Counsel. The IPRA request also seeks all DOH communications relative to the lawsuit.

If Quality Life Services, LLC did notify the DOH, then it would have been important for DDSD to to share any non-privileged information with the DOH contractor PCG for to help inform its rate studies.

Looking the other way and pretending a problem isn’t there is not a way to establish rates – let alone policy.

The Candle will be providing additional reporting on this matter over the next few weeks.

Below are copies of the Direct Care Workers’ Amended Complaint and the Federal Court’s Order Granting Class Action Status for Plaintiffs.