Home care agencies sue N.Y. over CDPAP change
ALBANY — Four home care agencies who say they will lose lucrative business contracts under the impending shakeup of a state-backed Medicaid program for people with long-term health care needs are suing the state Department of Health, joining a wave of opposition against the plan.
It comes amid mounting criticism of Gov. Kathy Hochul’s proposal to change the Consumer Directed Personal Assistance Program, which allows over a quarter million New Yorkers to choose their home care workers and get reimbursed by the state’s Medicaid program. Over 600 businesses known as “fiscal intermediaries” have sprung up since the CDPAP program was rolled out in New York, and offer largely administrative services between the patients enrolled in the program and Medicaid itself.
Beginning in October, they may all be forced out of business: the state Health Department will choose a single, statewide fiscal intermediary to administer the CDPAP program, something the agencies argue represents a blow to market choice.
Hochul has long said the change is a necessary one and that the industry has long been plagued with fraud and abuse. In defending the state’s choice to eliminate the home care agencies, she has said spending on the program has jumped significantly in the past few years, driven in part by advertising that markets CDPAP as convenient and lucrative.
Home care agencies have mounted an intensifying campaign over the summer to attempt to stop Hochul and health officials from implementing the change. The three New York City-based fiscal intermediaries suing state Health Department Commissioner James Mcdonald in U.S. District Court in Manhattan allege the shakeup amounts to a breach of their constitutional rights.
“Instead of favoring the public at large by strengthening and improving CDPAP, (this) eliminates choice for services by turning the fiscal intermediary industry into a governmentsupported monopoly run by a single statewide fiscal intermediary that will be hand-picked by the state,” states the lawsuit, which was filed Wednesday. “This irrational crackdown on competition may benefit the new statewide fiscal intermediary — a private entity — but will harm the public by reducing the level and quality of home care for New York residents who need it most.”
The plaintiffs, all home care agencies serving New York City and its suburbs, have retained the prominent law firm Gibson, Dunn and Crutcher. One of their New York attorneys, Mylan Denerstein, previously served as a counsel for former Gov. Andrew M. Cuomo.
The lawsuit is part of a string of legal actions the industry has taken to try to halt the rollout of the proposed changes: last month a group known as the Alliance to Protect Home Care filed a similar claim in state Supreme
Court in Albany. That group has also spent millions of dollars in an attempt to sway legislators to its cause and to delay the shakeup.
Attorneys for the three home care agencies that filed this week’s lawsuit argue that the change will also impair the ability of the businesses to maintain longstanding contracts
they have with other health care organizations similarly tied to the state and federal Medicaid program. They contend it will cause “immediate, severe and permanent changes to the plaintiffs’ contractual rights” in violation of the federal contracts clause.
One of the companies, Marton
Care, has a presence in several Capital Region counties, according to the lawsuit. And it holds a longstanding contract with a health insurance company known as Centers Plan for Healthy Living. Both business functions will be disrupted by Hochul’s proposed plan, the lawsuit said.
The Times Union previously reported that Centers Plan for Health Living, one of the largest contract-holders with New York, has deep ties to a nursing home operator named Kenneth Rozenberg, currently under a massive investigation from the state attorney general’s office for allegations of extensive
Medicaid fraud.
While several lawmakers on both ends of the political spectrum have been hesitant to endorse Hochul’s plan to overhaul CDPAP, the influential health care union 1199 SEIU has backed it, according to a memo circulated to lawmakers earlier this month.