Governor Hochul’s plan to reform Medicaid’s fraud-plagued $9 billion home care program – which allows New Yorkers to get paid for caring for the elderly – is facing legal challenges from the “middlemen” who act as wage brokers between Medicaid and caregivers.
The governor quietly pushed through a measure during the state’s budget negotiations earlier this year that would replace the hundreds of financial intermediaries that pay caregivers under the popular Consumer Directed Personal Assistance Program (CDPAP) with a single company selected by the Department of Health.
A group representing the “middleman” companies it wants to cut out has now filed a lawsuit to stop the proposal.
“This sweeping change to an $8 billion annual program was quietly passed in the final days of the state budget process, without any public dialogue, discussion or debate, let alone input from stakeholders and program participants,” attorneys for the Save Our Consumer Directed Home Care Program wrote in the lawsuit.
“This will result in hundreds of businesses in New York State going out of business, thousands of jobs being lost, services being significantly disrupted and/or consumers being completely deprived of services in their own homes, forcing them to shelter in place,” it said.
Under CDPAP, New Yorkers can receive about $38,000 per year to care for family members or close friends.
Hochul’s proposal was brought into play to ensure oversight – and to reduce rapidly rising costs.
According to the latest figures from the Department of Health, spending on the program rose to just over $9 billion last year. In 2023, nearly 250,000 New Yorkers would receive treatment through the program, up from about 13,000 in 2015.
However, the lawsuit argues that the changes specifically target financial intermediaries and violate their ability to conduct business under the state constitution, the U.S. Constitution and federal Medicaid regulations.
The contract to replace hundreds of intermediaries with a single company is expected to be awarded by October 1.
Critics of the proposal, meanwhile, argue that the selection process for the new company is being rushed and carried out without transparency. For example, the State Audit Office is – as usual – explicitly excluded from reviewing the new contract.
Critics also complain that every potential company must meet extremely strict criteria, such as experience as a nationwide financial intermediary in another state.
In a statement to the Washington Post on Monday, Hochul’s office said the plan would lead to a more efficient use of taxpayer dollars.
“We are committed to protecting patients in home care, strengthening CDPAP and ensuring the sustainability of the program,” a spokesperson said.
“Our reforms will advance that goal by ensuring that taxpayer dollars go to the patients who need them.”
Attorneys for Save Our Consumer Directed Home Care Program did not immediately respond to a request for comment. New York State Department records show the group was formed in June of this year.
Bryan O’Malley, executive director of the Consumer Directed Personal Assistance Association of New York State, was not involved in the lawsuit, but his group also sharply criticized Hochul’s proposal.
“Governor Hochul is attempting to hand over a program that allows New Yorkers to receive critical care in the safety of their own homes to an out-of-state company,” O’Malley wrote in a statement Monday.
“This process has proven to be nothing more than an ill-conceived $8 billion backroom deal and must be stopped before the people it serves are forced into nursing homes,” he added.
