New York State has passed a budget that will replace hundreds of intermediary agencies with a sole proprietor company to operate the Consumer Directed Personal Assistance Program (CDPAP), effective from October 1. Critics argue that this major reform is rushed and may lead to unforeseen consequences. The Governor of New York recently stated that there might be changes or delays in implementing this new change aimed at reducing Medicaid expenditures.
The Consumer Directed Personal Assistance Program (CDPAP) in New York allows patients to hire family members as caregivers under the program, with the caregiving expenses funded from Medicaid, but requiring intermediaries for application processing. According to the plan approved in the New York budget, over 600 of such intermediary agencies (Fiscal Intermediaries) will be replaced by a sole proprietor company contracted by the New York State Department of Health.
The Governor’s office stated, “They (intermediary agencies) essentially take money from Medicaid, deduct a certain fee, and then hand over the check to the caregivers.”
“We are taking control of this, focusing on quality services and enhancing oversight of the program so that we can ensure taxpayers’ money goes towards paying caregivers and not being siphoned off by middlemen.”
The New York Post reported on the 12th that a legal representative of a group called “Save Our Consumer Directed Home Care Program” is filing a lawsuit against the sudden change in the $8 billion annual program, claiming that it was quietly passed in the final days of the New York budget negotiation process without public dialogue, discussion, or input from stakeholders and program participants.
The lawsuit argues that implementing the new regulations through a financial company selected by the New York State Health Department could lead to bankruptcy of hundreds of New York financial intermediary companies, leaving thousands unemployed, and severely disrupting or depriving consumers of care services at home, demanding the Governor stop the implementation of the new rules.
Since relaxing eligibility criteria in 2015, the number of people hiring home caregivers through CDPAP has increased from under 20,000 in 2016 to approximately 250,000 this year. Last year, New York spent over $9.1 billion on CDPAP.
Earlier this year, Governor Hochul stated that CDPAP had long been abused and turned into a “fraud”. In an effort to cut the massive $100 billion Medicaid expenditure and avoid a $4 billion budget shortfall due to abuse, New York has been seeking to make changes to CDPAP.
However, some legislators are concerned that with the further aging population in New York, the demand for long-term care will increase, and cutting Medicaid spending poses risks for patients and healthcare workers. Therefore, it is necessary to seek new legislation to balance the negative impacts of the reforms.
According to nystateofpolitics, this Monday, Governor Hochul mentioned that efforts will be made to advance the mission before the policy takes effect and multiple fiscal intermediary agencies will be allowed to participate in the implementation of the CDPAP program. She also pledged that reducing the number of intermediary agencies will not limit the medical services available to CDPAP applicants.
Currently, approximately 3.2 million people in New York are over 65 years old, accounting for about 1/6 of the total population. Additionally, according to the New York State Department of Health data, as of March 2024, nearly 7.3 million people in New York have applied for Medicaid, with New York City accounting for 4.16 million, about 57%.