Consumer-Directed Regulatory Changes Trigger Home Care Layoffs, Possible Closures

Less than three weeks in, regulatory changes in one state are already threatening to shrink the home-based care workforce there.

The news comes out of New York, following Sept. 1 changes to the state’s Consumer-Directed Personal Assistance Program (CDPAP), which allows seniors and people with disabilities who receive Medicaid-certified home care to choose their own caregivers rather than be matched with one through an agency.

As a result of the changes — which equate to drastic funding cuts — the companies that make the program possible are laying off workers and threatening to close. Those organizations are called fiscal intermediaries (FIs).


“My understanding is that one agency has sent in notice to the department of health that they intend to close,” Bryan O’Malley, executive director of the Consumer-Directed Personal Assistance Association of New York State (CDPAANYS), told Home Health Care News. “I know a number have the paperwork filled out and ready to go.”

CDPAANYS represents FIs, which are often home care agencies that handle the administrative costs associated with training, staffing and payroll in CDPAP. Most are under managed long-term care plans, which are paid by the state.

“We’ve been getting frantic phone calls from consumers and personal assistants for the past week or two,” O’Malley said. “FIs have been forced to cut overtime and wages to minimum wage.”


The closure of FIs could mean seniors and people with disabilities in the CDPAP program might have to go without care, representatives from the Home Care Association of New York State (HCA-NYS) previously told HHCN.

“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],” Director of Communications Roger Noyes told HHCN during an August interview.

HCA-NYS is trade group for home care agencies in the state. Noyes projects problems for FIs could get a lot worse in the weeks and months to come.

“Some managed long-term care plans may … be awaiting the outcome of [an ongoing] court case before making contract amendments to FIs reflecting the cuts,” he recently told HHCN.

In other words, some FIs have yet to be directly affected by the CDPAP cuts because the managed care organizations they’re under may be waiting to see how things shake out before they renegotiate their contracts.

CDPAANYS is holding out hope they can make a difference before the cuts’ impact becomes more widespread. The organization is suing the New York State Department of Health (DOH) over the new funding policy.

The lawsuit alleges that the DOH failed to follow the laws and procedures required to develop a new rate for agencies — and that the rate they settled on does not represent the actual cost of doing business.

In fact, O’Malley said, FIs are only getting about one-fifth of the funding they need for administrative costs.

The substantive hearing started Tuesday.

“We are hopeful that the judge has a decision in the very near future, … say by the end of the week or early next week at the latest,” O’Malley said.

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