On July 22 the Consumer Directed Personal Assistance Association (CDPAANYS) filed a lawsuit against the Department of Health (DOH). The suit alleges that the DOH made unlawful changes to how Medicaid reimburses companies that administer the Consumer Directed Personal Assistant Program (CDPAP), which allows patients to hire and train their own in-home care providers.
This comes after New York Gov. Kathy Hochul criticized the program, calling it “a racket,” telling Bloomberg News that it is “one of the most abused programs in the history of New York” as costs for the program have skyrocketed.
On July 2, the DOH announced that, “effective August 1, fiscal intermediary (FI) administrative payments will move to a non-risk distribution methodology for Medicaid Managed Care enrollees.”
The announcement emphasized upcoming changes, including the implementation of a three-tiered payment system for agencies that administer CDPAP based on the number of care hours completed monthly. Furthermore, reimbursements for direct care and administrative costs, typically paid at a single hourly rate, will now be split.
It is estimated that this could cut $200 million from state Medicaid payments to businesses that manage payroll and conduct administrative tasks for home health care aides and consumers. CDPAANYS said the cuts could result in lower wages and reduced access to care within the program.
Laura Cardwell, CDPAANYS’ director of operations and events, told Home Health Care News the proposed rates are “absolutely not sustainable, and that will become evident through the steps in the regulatory process.”
The DOH said it made the changes based on the Centers for Medicare & Medicaid Services’ (CMS) feedback and that “the new payment structure will be consistent with prior non-risk managed care payment arrangements, such as home and community-based service distributions.”
Still, those in the industry are concerned.
In a letter dated July 19, 2024, from the New York Health Plan Association, the Coalition of New York State Public Health Plans, the New York State Coalition of Managed Long-Term Care Plans, LeadingAge New York and the NYS Conference of Blue Cross Blue Shield Plans, who are not directly involved in the lawsuit, wrote, “It is worth noting that plans operate with an 89% medical loss ratio (MLR) – and rates are not supposed to be retroactively adjusted (in either direction). To the extent that plans have a surplus, funds will be recovered by the state through the MLR remittance process – making any additional premium reduction unreasonable and unnecessary at a time when plans must focus on implementing this significant policy change and minimizing member disruption.”
Home Care Association of New York State (HCA-NYS) CEO Al Cardillo told HHCN that they are highly concerned about the state’s actions in slashing the reimbursement of CDPAP.
“These cuts jeopardize the basic viability of care for this segment of the home care population and undermine the sustainability of the agencies essential for delivering the service,” he said. “Moreover, the cuts pile onto the already severe fragility of home care services access in New York state and will have the heaviest impact in the very geographic regions already suffering disproportionate home care loss due to underfunding. This policy flies in the face of the critical public need for home care and the role that home care fulfills as a core partner to hospitals and physicians in the continuum of care.”
Companies featured in this article:
Coalition of New York State Public Health Plans, Home Care Association of New York State
