New York’s contentious plan to pare down a popular Medicaid-funded home care program may have been the result of backroom discussions between Gov. Kathy Hochul and lawmakers, sources say, but labor giant 1199 SEIU, which stands to benefit from the deal, may have helped it come to fruition.
Hochul has prioritized streamlining the Consumer Directed Personal Assistance Program, which costs the state $9 billion annually, to stymie ballooning Medicaid costs. The polarizing program is popular because it allows family members to get paid by the state to care for their loved ones, but it has also garnered criticism; those who oppose the program say it’s vulnerable to fraud because it’s opaque and difficult to regulate.
Hochul first suggested cutting worker wages and reducing care hours, measures rejected by the state legislature.
The successful proposal that followed emerged seemingly out of thin air: The state would reduce the number of businesses that function as middlemen between home care workers and the state, called fiscal intermediaries, from 700 to just one.
The move shocked supporters of the program; a plan to outsource payroll tasks to a single entity was nowhere to be found in the governor’s executive budget in January, nor in the legislatures’ rebuttals to her financial proposal two months later. It was never mentioned publicly until the final weeks of budget negotiations, sources say.
“It was not a seriously vetted idea,” said Bill Hammond, senior health policy fellow at the Empire Center for Public Policy, a conservative-leaning think tank.
Many have questioned whether labor giant 1199 SEIU had something to do with the proposal. The union, which has publicly supported reducing the high administrative costs associated with home care, stands to benefit from the plan, which could pave the way to unionization for what’s estimated to be more than 200,000 workers.
“We are a labor union and we’re not at all shy about our interest in organizing workers,” said Helen Schaub, political director of 1199 SEIU. The union has organized more than 10,000 consumer-directed workers in the past few years and takes on the role of negotiating wages and getting sufficient funding for the program, Schaub said.
There are few policies regarding the Medicaid budget that are passed without the backing of 1199. The labor union has joined forces with the industry group Greater New York Hospital Association to become one of the most powerful lobbying forces in health care, with their joint nonprofit spending $5.7 million on state lobbying last year – the highest of any group statewide.
The move to consolidate the home care program under a single statewide fiscal intermediary likely wasn’t immune to that influence. State Senate health chair Gustavo Rivera previously told Crain’s he was “very, very opposed” to pursuing a sole-source contract to administer the program, although he supported cutting back on administrative costs. But once the state created a provision of the plan that allowed for sub-contracts with some groups including Independent Living Centers – a plan supported by 1199 – Rivera said lawmakers did their best to “minimize the harm here.”
Outsourcing payroll and administration to one business, rather than hundreds, could streamline the process of organizing personal care aides – a benefit that motivated 1199 to propel the changes forward, Hammond said.
“There’s a question as to whether or not they put it out there,” said Bryan O’Malley, executive director of the Consumer Directed Personal Assistance Association of New York State. “But once it was out there, it definitely had their support.”
Asked whether the proposal to move to a single entity to administer payroll was engineered by 1199, Schaub said that the union has long supported policies that cut back on administrative spending for the consumer-directed program. “But this was not something that we said, ‘you know, this is our goal in this budget to move this proposal,’” Schaub said. “Once it had momentum, we were happy to endorse it.”
There are more questions than answers about how the rollout of the single statewide payroll administrator is going to play out. The state has not started looking for a contractor to manage the program, and until then it will remain unclear which businesses or organizations will get subcontracts or what they will do. The contract will not be eligible for comptroller review – which both Comptroller Thomas DiNapoli and home care advocates have expressed concern about.
The state expects to release a request for proposals to identify a company to administer payroll this summer, according to Cadence Acquaviva, a spokeswoman for the Health Department.
Until then, most stakeholders are raising questions about how the state will make a massive transition by April of next year, when the existing businesses administering the program will be required to stop operations.
“I don’t think the question of how something got on the table is that important,” Schaub said, adding that the union has been asked that question by quite a few people since the budget came to a close.
“What’s going to happen now, I think that’s the more interesting question.”
Amanda D'Ambrosio , 2024-06-10 11:33:04
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