A popular home care program that allows older New Yorkers and people with disabilities to hire their own caregivers became the focal point of last week’s budget talks as policymakers sought ways to cut Medicaid spending. But now that the deal is done, the state is banking on $500 million-savings from a program overhaul while advocates fear massive disruptions to care.
The latest budget deal changes the way the state will administer services through the consumer-directed personal assistance program, a home care program that allows individuals to choose and hire their own caregivers. The agreement whittles down the number of fiscal intermediaries, or businesses that manage payroll and administration from the 700 that do the job currently, to just one.
The cuts stem from Gov. Kathy Hochul’s attempts to reduce spending on the program, which have increased 1,200% in the last decade, officials say. The consumer-directed program wracked up a $9 billion tab last year alone, up from $2.5 billion roughly five years ago.
The state has less than a year to contract with a new business to manage the program and transition patients and caregivers to the new model, generating concerns about whether it will be able to pull it off. Here’s an overview of the home care program at the center of this year’s budget talks.
Program faces ‘explosive’ growth
The consumer-directed personal assistance program was born out of disability-led grassroots efforts in 1995 to give chronically ill and physically disabled New Yorkers the ability to hire their own caregivers, laying the groundwork for the hallmark of the program: patients can hire family members or friends as personal care assistants who are paid by the state Medicaid program.
When the consumer-directed personal assistance program launched it served a couple thousand New Yorkers. Now, that number has grown to 250,000 — an expansion that advocates attribute to a growing aging population and need for more in-home health care.
Fiscal intermediaries contract with the state to manage payroll and home care hours that personal care assistants provide. But the large number of businesses providing this service has impeded the state’s ability to oversee spending and care, opening up the program to fraud and abuse, officials say.
The state has tried to lessen the number of fiscal intermediaries doing business in the consumer-directed personal assistance program by implementing a competitive bidding process to scale back the number of fiscal intermediaries. But that process received backlash from advocates who said that the process would shutter businesses and limit patients’ ability to choose where they receive care.
Bill Hammond, senior fellow for health policy at the Albany-based think tank Empire Center for Public Policy, said that state officials have pointed to fraud and abuse among fiscal intermediaries as one of the main reasons to overhaul consumer-directed care.
“I think the fiscal intermediary industry is becoming a scapegoat for larger problems in the program,” Hammond said. “To some extent, I think it’s not completely unjustified.”
Changes spark fears of care disruptions
The final budget attempts to regain control over the program by contracting with a single fiscal intermediary to manage the entire program, a change that Hochul said could save the state up to $500 million a year.
The state will enter a competitive bidding process for a single business to take over administration and payroll, offering a contract to a business that operated as the sole fiscal intermediary in another state – criteria that narrows down the number of candidates significantly.
The contract is also not required to go through a review by the state comptroller, a fact that further reduces transparency in a program that’s already opaque, said Bryan O’Malley, executive director of the advocacy group Consumer Directed Personal Assistance Association of New York State.
Alicia Biggs, a spokeswoman for the state Health Department, said that the comptroller will be able to review the contract at any time, but is not required to review it before an award is granted.
Although the consumer-directed personal assistance program will be administered by a single fiscal intermediary, the budget deal included provisions to allow some entities to stay in business. The state has 11 independent living centers – organizations that teach people with disabilities the skills to live independently – that operate as fiscal intermediaries; all 11 will have the opportunity to pursue a subcontract with the lead organization.
But advocates still fear that the changes will disrupt care for thousands of New Yorkers. Lindsay Miller, executive director of the New York Association on Independent Living, said that transitions to a single fiscal intermediary in other states like Massachusetts and Pennsylvania left people without caregivers and workers without pay. Those programs, she added, were not nearly as big as New York’s.
The budget requires the state to transition to a single fiscal intermediary by April 1, 2025. Biggs said that the state will begin the bidding process as “quickly as possible,” starting this spring or summer.
Amanda D'Ambrosio , 2024-04-23 11:33:05
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