Crisis Averted: Court Strikes Down Rate Changes Set to Compound Caregiver Shortage

Regulatory changes that threatened to compound the caregiver crisis in one state have been reversed, after a judge declared them “null and void.”

The news comes more than a month after a new rate structure took effect to govern the Consumer-Directed Personal Assistance Program (CDPAP) in New York.

CDPAP allows seniors and people with disabilities receiving Medicaid-certified home care to choose their own caregivers rather than to be assigned one. Not only does the program put recipients in charge of their care, but it also helps alleviate strain on the greater home care industry.

CDPAP lessens the caregiver crisis by allowing those in the program to choose friends or family members to provide care, rather than dipping into the limited pool of agency caregivers in New York.

However, many complained that the new rate structure adopted Sept. 1 jeopardized the CDPAP program — or more specifically, the agencies that make the services possible. It cut reimbursement to the organizations that administer the program by more than 80%.

Those organizations are called fiscal intermediaries, and they handle the administrative costs associated with Medicaid compliance, support for those in the program and payroll for consumer-directed caregivers.

The new rate drastically cut the amount of Medicaid money the state gave FIs to perform all those services. Just a few weeks after the changes took effect, FIs started laying off workers and contemplating closure, industry advocates previously told HHCN.

But as of last week, those issues have been resolved, at least in the short term. That’s thanks to a group of pro-CDPAP associations who sued the New York State Department of Health (DOH) back in July. 

Plaintiffs included the Consumer-Directed Personal Assistance Association of New York State (CDPAANYS), New York State Association of Health Care Providers (HCP) and the New York Association on Independent Living (NYAIL), among others.  

In the suit, plaintiffs argued that the DOH failed to get legally required feedback from experts and stakeholders before making the cuts. On top of that, they alleged that the new rate DOH implemented doesn’t cover the cost of doing business. 

Last week, a judge agreed. The court ruled that the rate structure violated New York’s administrative procedures act, declaring the new rate null and void.

In other words, it’s back to the drawing board for the DOH and back to business as usual for FIs who make CDPAP possible. The plaintiffs and other CDPAP stakeholders expressed their excitement following the ruling. 

“I am pleased that the Court struck down this unfair rate structure,” Kathy Febraio, President of HCP said in a statement.

Bryan O’Malley — executive director of CDPAANYS, an association that represents FIs — echoed those sentiments and his intent to help the DOH come up with a better way to gain efficiencies within the program.

“As they go back to the drawing board, CDPAANYS and our partners stand ready to work with the DOH to come up with real solutions that will save money without ruining the lives of 70,000 New Yorkers who rely on the program for their dignity and independence, and the over 100,000 people it employs,” O’Malley told HHCN in a statement.