Regulatory Changes Threaten to Compound Caregiver Crisis

For years now, the caregiver crisis has plagued the home care industry, with demand far outpacing supply in most parts of the county and home care turnover hitting an all-time high of 82% in 2018.

In New York, regulatory changes are about to make the problem a lot worse, according to industry leaders in the state.

Looming Sept. 1 cuts to the state’s Consumer-Directed Personal Assistance Program (CDPAP) are to blame.


CDPAP allows seniors and people with disabilities who receive Medicaid-certified home care to choose their own caregivers — who are often family members — rather than be matched with a caregiver from a home care agency. Medicaid then pays those consumer-directed caregivers for their services through a fiscal intermediary (FI), a company or organization that handles the administrative costs associated with training, staffing and payroll. 

But starting next month, FIs will receive significantly less Medicaid money to finance their administrative costs, effectively forcing hundreds of New York’s FIs to close up shop, according to Bryan O’Malley, executive director of the Consumer-Directed Personal Assistance Association of New York State (CDPAANYS). 

In turn, that would jeopardize the care of the approximately 70,000 New Yorkers in CDPAP, prompting them to turn to agency caregivers, he told Home Health Care News. And because of the nationwide caregiver crisis, that option isn’t always realistic.


“Part of the reason for rapid adoption [of CDPAP] is because of the workforce crisis,” said O’Malley, whose trade organization represents FIs in the state. “You can’t find workers. People are going to go without services.”

Home Care Association of New York State (HCA-NYS) Director of Communications Roger Noyes also acknowledged the problem. HCA-NYS is trade group for home care agencies in the state.

“In many cases, CDPAP is a help in addressing the workforce shortage issues that may exist, especially in upstate New York and in rural communities where access to qualified caregivers and the retention issues …. really demand some creative [solutions],” he told HHCN.

As a result, O’Malley fears people in the CDPAP program will be forced to go without services.

That’s why CDPAANYS recently sued the New York State Department of Health (DOH) over the funding policy.

The lawsuit alleges that the DOH failed to follow the laws and procedures required in developing a new rate for agencies and that the rate does not represent the actual cost of doing business. In fact, O’Malley said, FIs will be forced to eat the administrative costs associated with being in the program — plus pay consumer-directed caregivers less in light of the cuts.

“You’re going to have wage [and] benefits cuts for workers, and then [FIs] will have no money left to do actual administrative services,” O’Malley said. “You basically force people out of business, which is why we sued.”

New York State Association of Health Care Providers (HCP) and the New York Association on Independent Living (NYAIL) are also co-plaintiffs in the suit. 

While a New York Supreme Court judge denied the organizations’ request for a preliminary injunction to stop the rate changes from going into effect Sept. 1, she ruled that the lawsuit can proceed.

What are fiscal intermediaries?

Often times, fiscal intermediaries are certified home care agencies themselves.

In total, there are about 600 FIs across New York state, and about 20 of those are also members of the HCA-NYS, according to Noyes.

“We have about 20 FIs — however, they tend to be larger, so they serve anywhere from 30 to 2,000 cases each,” Noyes told HHCN. “Total caseload of our FI members is about 7,500, so you’re looking at about a tenth of the state’s caseload.”

Meanwhile, O’Malley estimates that an even larger portion of the state’s FIs are home care agencies that may not be HCA-NYS members. Most of the state’s FIs are members of O’Malley’s organization, CDPAANYS.

“It’s safe to assume that 85% to 90% of the 600 [FI] organizations are home care agencies as well,” he surmised.

That 600 number was a large motivator in New York state’s decision to implement changes to the CDPAP program in the first place. One goal of the proposal is to make the CDPAP program more efficient and to consolidate hundreds of fiscal intermediaries, many of which popped up only in the past few years.

“That indicates that the program is a money-making opportunity,” Bill Hammond, director of health policy at the Empire Center for Public Policy, previously told the Albany Times Union.

Still, O’Malley and Noyes worry well-intentioned FIs that are operating as they’re meant to will also take a hit.

“One of the concerns we have is continuity of care, whether the state has foreseen some of the continuity of care risks that exist and … whether or not [remaining] FIs have the margin or the scale to be able to take on the FI needs of individuals that would otherwise be served by the smaller FIs that can’t make it under these rate cuts,” Noyes said. “These are major rate cuts.”

Meanwhile, the state maintains that those in the CDPAP will not see an interruption in service due to the upcoming program changes. 

“The ‎SFY 2019-20 Budget maintains the state’s full commitment to the Consumer Directed Personal Assistance Program, while strengthening protections to ensure choice, geographic availability, cultural competency, and quality services for the more than 70,000 self-directing consumers who employ their own aide,” a DOH spokesperson recently told Spectrum News.

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