Employment – Fiscal intermediary – Overtime – Wage Act

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Where a plaintiff personal care attendant who provided in-home services for an elderly man brought an action in Superior Court alleging that a corporate defendant was her employer and failed to pay her for her overtime hours, an order dismissing the complaint must be affirmed because pursuant to the MassHealth regulations governing the plaintiff’s work arrangement, she was employed by the consumer, not the defendant.

“The essential question posed by this case is whether [defendant] CPM may be considered [plaintiff Susan] Gallagher’s employer for the purposes of the Wage Act, the overtime statute, or both. …

“We apply [G.L.c. 149,] section148B here by asking whether Gallagher provided services to CPM. … Ordinarily, this inquiry presents a question of fact. … This is not the ordinary case, however, because here there exists a regulatory framework that describes the relationship between the various parties — Gallagher, CPM, and the consumer — in extensive detail. …

“… Importantly, for summary judgment purposes, there is nothing in the record to suggest that the regulations did not apply, nor that Gallagher’s relationship with CPM differed in any respect from the relationship, as contemplated by the regulations, between PCAs and fiscal intermediaries. Equally important, looking to Gallagher’s pleadings, there also are no allegations suggesting that her relationship with CPM differed in any way from that described by the regulations, much less that it differed by virtue of her providing services to CPM. …

“… Fiscal intermediaries such as CPM enter into contracts with MassHealth ‘to perform employer-required tasks and related administrative tasks.’ 130 Code Mass. Regs. section422.402. … Although the fiscal intermediaries are responsible for issuing payments to PCAs, they act only as a conduit for funds that are provided by MassHealth. 130 Code Mass. Regs. sectionsection422.411(A), 422.419(B)(12). Another regulation specifically provides that fiscal intermediaries are not responsible for paying PCAs for time worked in excess of what has been authorized by MassHealth, and the regulation does so with language that suggests that consumers would be responsible for payment of wages for that time. See 130 Code Mass. Regs. section422.416(E)(4)(e). …

“Nothing in these regulations suggests that PCAs provide services to fiscal intermediaries. While it is true that the very existence of PCAs does eventually inure to the benefit of fiscal intermediaries — MassHealth pays fiscal intermediaries ‘administrative fee[s]’ for their work, 130 Code Mass. Regs. section422.448 — there are two reasons why this does not alter our conclusion.

“First, CPM’s entitlement to administrative fees is the result of a work arrangement that was designed by Congress, the State Legislature, and regulatory agencies — not CPM. …

“Second, focusing our attention more directly on the threshold test under section148B, we conclude that the relationship between Gallagher’s work and CPM’s receipt of administrative fees is far too attenuated to permit the conclusion that she provided services to CPM. …

“We therefore conclude that, in the circumstances of this case involving a PCA and fiscal intermediary working wholly within the framework of the regulations, Gallagher did not provide services to CPM and cannot be deemed its employee for the purpose of the Wage Act or the overtime statute. …

“Although fiscal intermediaries play an important role in MassHealth’s regulatory framework, their ‘[m]ere participation in that system is insufficient’ to render them presumptive employers under G.L.c. 149, section148B(a). … Because Gallagher did not provide services to CPM, it cannot be deemed her employer for the purposes of the Wage Act, nor the overtime statute, and her claims were correctly dismissed.”

            Gallagher v. Cerebral Palsy of Massachusetts, Inc., et al. (Lawyers Weekly No. 11-117-17) (15 pages) (Lemire, J.) Motion to dismiss heard by Rosalind Henson Miller, J., in Superior Court. Paul L. Nevins for the plaintiff; Jeffrey S. Beeler, of Heinlein Beeler Mingace & Heineman, for the defendants (Docket No. 16-P-1152) (Sept. 13, 2017).