Questions mount over New York state’s timeline to change Medicaid program

A growing number of lawmakers are calling on the federal government to intercept New York’s enacted changes to a Medicaid program that helps disabled and elderly people stay in their homes as more stakeholders express concern about the timeline. 

The state Health Department is expected to contract with a single company to oversee its Consumer Directed Personal Assistance Program by Oct. 1. More than 250,000 New Yorkers depend on the program, which allows the disabled and elderly to receive care by a loved one and live independently.

“We’re really very concerned about the changes that would occur,” said Sen. John Mannion, who chairs the Senate Disabilities Committee. 

Dozens of state lawmakers Tuesday, including several Democrats, sent a letter to the U.S. Center for Medicare & Medicaid Services to prevent the state from contracting with one fiscal intermediary (FI) by the upcoming deadline. Changes to the program are slated to take effect April 1, 2025.

“Is this going to work for individuals? Is it going to save the dollars that have been projected?” Mannion asked Wednesday. “…We’re reaching out to the federal government to say ‘We really need an analysis of this.'”

A total of 25 of the lawmakers who signed the letter voted in favor of the state budget legislation that imposed changes to the program. Mannion said he and several of his colleagues took issue with the change, but voted for the budget because the spending plan as a whole had many provisions that lawmakers support.

“We did not have the time to dedicate to this issue in a manner it really deserved,” he added.

State lawmakers aren’t the only ones concerned the state is moving too quickly to transition CDPAP to one fiscal intermediary down from nearly 700 entities that currently manage the $9 billion program.

Larry Spencer is CEO of Tempus Unlimited Inc. — the sole fiscal intermediary that oversees CDPAP in Massachusetts and Pennsylvania. He said the company more than cut the time in half to process payments for Pennsylvania caregivers since taking over the program two years ago — down to six days from 13 days -— which shows a single FI model to run CDPAP can be successful.

“There’s no question that the single FI model can be successful in a state, and we’ve proven that… but it takes a lot of planning,” Spencer said Wednesday. “It takes, quite frankly, the state not getting in the way of the transition.”

Massachusetts transitioned its CDPAP, which serves about 50,000 people, to one FI over an eight-month period, Spencer said. New York will implement the change over six months with a program that’s five times larger. And Massachusetts transitioned from two FIs to one in that longer time period — not hundreds.

Spencer said it will be difficult for the state Health Department to smoothly transition New York’s large program in the allotted timeframe.

“That’s an enormous task,” he said. “You have to take the time and do it right. I don’t think they’ve allotted the enough time to do it right.”

Gov. Kathy Hochul has said the annual $9 billion is unsustainable. The governor says the state must cut down on hundreds of middle men that absorb millions of dollars that could be better spent on care.

She told reporters last week the state continues to work through a trial period to improve the program without hurting the people who need it. 

“This was never about them getting less, it’s about making sure we have enough money to take care of more,” Hochul said Thursday.

The governor did not clarify comments she made earlier this month that the state may consider contracting with more than one FI.

State leaders continue to evaluate other states that successfully manage CDPAP using one company.

Tempus Unlimited has been a fiscal intermediary for over 25 years, but the company will not bid to manage New York’s program after concerns about how the state Health Department plans to contract with a single agency.

The state does not plan to pay the company in advance for payroll, which Spencer argues is not feasible. DOH requires a company to have a $100 million line of credit to be eligible.

Spencer estimates New York’s program would cost about $150 million per week, and a company would need to spend between $600 and $900 million up front before reimbursements from the state kick in weeks later.

“We don’t have the ability to come up with between $600 and $900 million to fund the start of the program — I don’t know that any FI in the country does,” he said. “So I don’t know how this gets pulled off the way it’s currently put together.”

Meanwhile, a group of FIs that provide care in the state under CDPAP, filed a lawsuit in state Supreme Court Aug. 12, challenging the Health Department’s ongoing process accepting bids. 

Petitioners argue the department’s Requests For Proposals favor out-of-state companies and denies New York entities equal protection.

“We don’t want that here in New York — we’re better than that,” said Carlos Martinez, CEO and executive director of BRIDGES, a petitioner in the Article 78.

A judge will hear arguments in the case Aug. 30 before making a decision to grant or dismiss petitioners’ request for an injunction to delay the bidding process.

DOH’s process to select a single FI is on track to continue its current timeline, or to award a contract by the Oct. 1 deadline, according to the governor’s office.

“CDPAP is an important program that empowers New Yorkers to choose their own care at home,” a spokesperson with Hochul’s office said in a statement Wednesday. “We’re committed to protecting home care patients, strengthening CDPAP and ensuring the program is sustainable. Our reforms will advance that goal by making sure taxpayer dollars are effectively serving the patients who need them.”