Has New York Solved Its Home Health Care Mess – Or Made It Worse?
Six months in, clouds of dissatisfaction continue to hang over New York State’s latest attempt to reform and rein in the costs of its $11.2 billion annual provision of home health care for the disabled and the frail elderly.
For example, a lawsuit alleging that many, perhaps thousands, of home care workers have been unpaid or underpaid for weeks of work under a new payroll system is pending in federal court. State Health Department officials also acknowledge unhappiness with the expensive and inadequate health insurance offered to workers by their payroll manager.
And lawmakers continue to raise questions about why the process of granting the State contract overhauling administration of home health care seemed overtly to favor the out-of-state firm that now runs the show.
First, a quick review of how this state of affairs came about.
In 2016, Governor Andrew Cuomo adopted a new home care policy. Rather than pay private sector and non-profit agencies to hire, train, and supervise home care workers, the State would instead pay the relatives of home health clients to do the work. This approach hoped to solve two problems. It would address a seeming shortage of people willing to work as home attendants. And by eliminating the agency middlemen, it would stem the State’s rapidly growing share of the Medicaid costs involved. The Consumer Directed Personal Assistance Program (CDPAP) was born.
It has not, however, checked rising home health care expenditures as expected; in fact, such State spending has doubled since 2016. As the state’s population ages, demand for care has cascaded, while thousands of New Yorkers have, perhaps surprisingly, signed up for CDPAP work at $19/hour. (They now care for about 60 percent of home health care consumers, with legacy agencies responsible for the rest.) By the time Governor Kathy Hochul came on the scene, budget officials were predicting that the State’s related Medicaid costs would continue to grow unsustainably.
In response, Hochul in April 2024 inserted a last-minute amendment into the State budget. It authorized a search for a single entity to replace the 600-700 companies, also called “fiscal intermediaries,” that handled CDPAP timekeeping and payroll administration. The governor asserted that efficiencies in this consolidation would save the State $500 million annually.
The budget language also, however, contained two unusual clauses. It exempted the search from the State Comptroller’s contracting process. It also effectively eliminated all New York fiscal intermediaries from being chosen, by limiting selection to a company with statewide experience, but not in NY. PPL, a Georgia-based, private equity-owned company with experience in similar programs, was eventually determined to be the only firm with the requisite expertise.
In order to book the estimated $500 million in savings in the FY2026 State budget, PPL was asked to quickly move 280,000 clients and their workers to a new digital payment system between January 1 and April 1, 2025. This, however, proved impossible. Thousands of disabled and elderly clients reported difficulty with PPL’s online registration. Workers told of unanswered phone calls, system breakdowns, and incomprehensible instructions. On April 1, only about 60 percent of 330,000 workers had linked up to the PPL paymaster system. PPL registration was subsequently extended to August 1 for clients and August 15 for workers.
The snafus in this changeover lie at the heart of the lost wages suit against PPL. In State legislative testimony, Legal Aid Society lawyers have alleged that ensuing “catastrophic system failures in PPL’s enrollment, payroll, timekeeping, and communications infrastructure” have “subjected tens of thousands of personal assistants to wage theft.”
Then there’s the issue of forced enrollment for essentially valueless health benefits. PPL is requiring CDPAP workers to “buy” a package for $435/ year, consisting of a wellness plan and accident and critical illness indemnity insurance - none of which cover doctors, hospitals, or drugs. PPL, which is self-insuring, will rake in millions. PPL is also selling workers a voluntary, expensive, inadequate health insurance package. Because this is an “employer offer,” workers who reject it find themselves disqualified from enrolling in alternative subsidized insurance offered by Affordable Care Act plans.
At an Aug 21 State Senate hearing on the PPL changeover, Health Commissioner Dr. James McDonald and PPL vice-president Patty Byrnes said they were committed to finding a better health insurance deal. So far, however, no change along those lines has been announced.
That hearing also featured new information about how PPL landed its contract. State Senator James Skoufis, who chairs the Senate Committee on Investigations and Government Operations, revealed that an early draft of the governor’s budget amendment had named PPL as the expected recipient, making the subsequent “request for proposals” look like a sham. During the hearing, PPL’s Byrnes also testified that there had been no communication between her company and State health officials before the budget adoption in May 2024 – only to walk that assurance back in a later letter to Skoufis.
Dr. McDonald also told the hearing, which was held jointly with the Senate’s Health Committee, that the new payroll administration plan remains on track to save the expected $500 million annually. That comes with some significant trade-offs, however, including the fact that 80,000 clients have left CDPAP in recent months for care via the more costly licensed agency model.
Gov. Hochul cited eliminating “waste, fraud, and abuse” as a key reason for the switch to PPL. However, a diligent review by PPL of records of 500 million CDPAP hours turned over by the previous financial intermediaries uncovered only about 40 cases of questionable and possibly fraudulent payouts to home care workers.
The sums involved, moreover, probably doesn’t equal the wages lost by one of the 10,000 workers whose direct-deposit information was falsified by a PPL staffer in order to divert payments to his own accounts. (Upon discovery, according to PPL, the staffer was terminated, and the FBI was alerted.)
At the moment, the battlelines on this issue resemble a World War I Western front-like standoff. Governor Hochul hasn’t budged in her support for the CDPAP makeover. Her critics have dug in, too. A group called NY Caring Majority, made up of CDPAP clients, their families, and home care workers, continue to hold regular rallies at Hochul’s Albany office. (A Sept. 12 demonstration is pictured above).
One place where there has been movement, however, is at PPL. In recent months, the president, CEO, and chief financial officer of PPL – now headquartered in Latham, NY – have all announced plans to leave the company.
Barbara Caress has worked for many years in non-profit, union, and public agency health care policy and administration. She teaches public health policy at Baruch College.
Photo: Courtesy of NY Caring Majority.