New York State Department of Health’s transition to a single fiscal intermediary for its self-directed home care program has been dealt another blow.

On Monday, a federal judge ordered a temporary restraining order (TRO) and a preliminary injunction preventing the Department of Health from enforcing its overhaul of the Consumer Directed Personal Assistance Program (CDPAP).

The order prevents the Department of Health from disallowing other fiscal intermediaries from servicing participants who have not yet registered with the Department of Health’s pick for a single fiscal intermediary, an organization called Public Partnerships (PPL). CDPAP participants who have already registered with PPL will not be impacted, according to court documents.

“The TRO is a victory for consumers and personal assistants who have been all but ignored in the transition process. Their concerns about access to and continuity of care are legitimate and must be taken seriously,” Laura J. Ehrich, vice president of public policy at the New York State Association of Health Care Providers, told Home Health Care News in an email. “The temporary stay is another indication that the transition to the single FI has been recklessly fast, and frankly unrealistic.”

The restraining order, ordered by Senior United States District Judge Frederic Block, calls for the Department of Health to show cause for the planned transition within four business days. Oral arguments are scheduled for April 4.

A statement from the Department of Health acknowledged the restraining order, but specified that it does not stop the transition to a single fiscal intermediary and that it does not apply to the consumers who have registered or the workers associated with them.

“This is a limited order and for the vast majority of consumers and workers in the CDPAP program, nothing changes,” Dr. James McDonald, New York state health commissioner, said in a statement. “For those who haven’t registered with PPL and would like to remain in CDPAP, I urge you to reach out, take advantage of the State’s late registration window and get that process started today.”

It’s unclear what will happen to the law signed calling for a single FI next, according to Nili Yolin, partner at Holland & Knight law firm.

“The law has come under fire from so many stakeholders – obviously from FIs, but also from consumers, caregivers and managed care plans,” Yolin told HHCN in an email. “Given the stakes, it seems like an easy fix to delay the transition until September 30, 2025 (the date requested by the complainants), but most people want to know if the entire consolidation will be declared unconstitutional, and I just don’t have the crystal ball to predict that, although SC Justice Sotomayor just denied an application to stop the transition – if that’s considered a harbinger of things to come.”

A contentious process

The restraining order follows a fraught transition process. Even before the judge’s move, the CDPAP program was in “chaos,” according to Ehrich.

The Department of Health initially set April 1 as the deadline for consumers and their workers to register for the CDPAP program, but later extended the deadline to include a month-long grace period. Lawmakers and advocacy organizations also pushed back against the April 1 deadline.

The Department of Health has been sued several times over CDPAP, including by a fiscal intermediary that said the selection process was rigged.

“Successfully implementing a change of this magnitude was highly unlikely in the timeframe allowed,” Ehrich told HHCN in an email. “Compounding the time pressure is a lack of comprehensive guidance from the Department of Health. The guidance that has been provided has raised serious questions of law, as evidenced by the dozen or so related lawsuits.”

Ehrich reported anecdotally that calls to PPL have gone unreturned, people have experienced difficulties getting in-language guidance or translation services and call center representatives lack sufficient knowledge regarding the CDPAP program.

The transition to a single fiscal intermediary was designed to “address the runaway costs of the program and root out fraud and abuse,” according to the Department of Health. The agency cited that a fraudulent scheme of $68 million had recently been discovered. In October, the U.S. Department of Justice charged eight people with allegedly exchanging kickbacks and bribes for social adult day care and CDPAP home care services that never occurred, amounting to $68 million in Medicaid fraud.

New York Gov. Kathy Hochul has previously called the CDPAP a “racket.”

Approximately 195,000 consumers and over 220,000 CDPAP personal assistants have started or completed the registration process, the Department of Health reported on Monday. The agency did not specify how many of these groups had fully completed the registration process.

The Department of Health also highlighted that it has issued cease and desist letters to licensed home care services agencies and fiscal intermediaries who provide “false, deceptive or coercive information about CDPAP and PCS options to consumers and workers.”

Ehrich believes that the controversy around the CDPAP transition is harmful to the home care industry and could have been largely avoided.

“A longer implementation period, allowing for meaningful stakeholder input and more robust guidance from the Department of Health, would have mitigated the current adversarial atmosphere,” she said. “Instead, the ongoing public attacks are only making the transition more difficult.”

While details regarding the transition continue to morph, licensed home care agencies have experienced a recent surge in caseloads as individuals leave CDPAP, according to Ehrich.

“Yet they continue to struggle with the chronic underfunding and lack of investment that has plagued our industry for over a decade,” she said. “We are in Albany fighting to secure the funding necessary to pay for the care the state has authorized. Lawmakers must remember that the number of people who need and qualify for care has not changed with the shift to a single FI.”