Oct 18, 2024
A well-funded advertising campaign has charged Gov. Hochul with depriving needy New Yorkers of home care services. In truth, the campaign is an attempt to derail the governor’s efforts to end fraud and abuse in the state’s Medicaid program. The target of reform is the Consumer Directed Personal Assistance Program (CDPAP). It provides Medicaid dollars to fund in-home personal care for chronically ill or physically disabled individuals. It is different from other Medicaid-funded home care because it allows recipients the flexibility to choose their caregivers, including family members or close friends. A change in how the program is managed, led by the governor and approved by the state Legislature this year, is designed to trim administrative costs and reduce opportunities for fraud. The reform has absolutely no impact on the quality of care or the benefits to eligible home care recipients — and does not change eligibility for CDPAP care in New York. In fact, it will promote consistency and enhance services statewide, such as through a matching registry that will assist consumers in finding caregivers. Up to now, New York has relied on a sprawling network of fiscal intermediaries (FIs) — essentially middlemen — to handle administrative tasks associated with processing Medicaid payments.  Over the past decade, the number of intermediaries operating in New York skyrocketed to more than 600 different companies. That’s not just more than any other state in the nation — it’s more than every other state combined.  State data showed that CDPAP spending grew 126% from 2018 to 2022, while the overall Medicaid program only grew 26% during the same period. And last year, state and federal spending on CDPAP totaled approximately $9 billion.  This rate of spending growth is unsustainable without cutting into other important items in the state budget. Consumer-directed home care has gone from compassionate service to a lucrative business opportunity that has been exploited by some bad actors. For instance, executives at Responsible Care Staffing, Inc., were busted this year as part of a federal indictment unsealed last week for an alleged $68 million scheme to defraud Medicaid. According to Brooklyn U.S. Attorney Breon Peace, the company paid kickbacks and bribes to marketers who referred Medicaid recipients to them — and then the company billed Medicaid for services that were never actually provided. The indictment even stated that, in some instances, the Medicaid recipients were outside the United States on the purported dates of service, which isn’t exactly anyone’s idea of home care.  Similarly, executives of Paramount Homecare — one of the companies funding the advertising campaign against CDPAP reform — reportedly paid its executives more than $3 million in 2022, even as a report by the New York City comptroller also found that the company was found to have committed wage theft violations to the tune of more than $300,000. Another company funding the ads against CDPAP reform, X-Treme Home Care, was found to owe $522,000 in wage theft violations in the same report.  So, what’s the solution? New York has taken legislative action to eliminate unnecessary middlemen and ensure taxpayer funding for CDPAP goes directly to those who need it most.  The governor’s recent announcement that, pursuant to a public competitive bid, the state has selected a statewide partner — Public Partnerships LLC (PPL) — to serve as the primary financial intermediary for CDPAP is a significant step forward. This new framework, which will include regional and community-based partners, promises to deliver significant savings for the state while guaranteeing CDPAP home care users and caregivers the support they need. And the small number of mission-driven, nonprofit FIs like Centers for Independent Living will be able to continue to serve their consumers under the new system This reform is a powerful example of government taking a smart approach to an important policy issue. The “Wild West” days of 600-plus intermediaries running amok in New York are coming to an end. A streamlined administrative and regulatory framework will allow state officials to direct state spending to where it is most needed. Too often, elected officials cave in the face of pressure from well-funded special interests. In this case, the governor and legislative leaders stood strong. They should be encouraged to take actions that curb growth in state spending and make New York a more affordable place to live, work, and do business. Wylde is the president and CEO of the Partnership for New York City.
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