A little-known ripple in the state’s Medicaid policy — and lingering effects of its tumultuous transition of the Consumer Directed Personal Assistance Program, or CDPAP, to a single fiscal intermediary — has some pushing for reform in this year’s state budget.
Those involved in the effort say that for years, the state’s managed long-term care program, or MLTC, ballooned as an array of fiscal intermediaries and providers were incentivized by reimbursement rates to favor lower-need patients over those considered medically complex.
“The way the state set MLTC payment rates made enrolling people who need fewer services financially lucrative,” said Dan Lowenstein, senior vice president of government affairs at VNS Health. “The growth followed those incentives, and it made caring for high-need patients less and less sustainable.”
In 2024, during the state budget process, Gov. Kathy Hochul spearheaded a streamlining of the CDPAP home care program from hundreds of fiscal intermediaries to one: Public Partnerships LLC.
Despite a troubled rollout and investigations by the state Legislature into accusations of bid-rigging in favor of PPL, Lowenstein said the transition has helped curb the rapid growth of the state’s MLTC program and addressed other issues. However, he said the disparity between higher and lower acuity plans has been exacerbated.
“The rate cuts were applied without accounting for tens of thousands of individuals who moved from CDPAP to higher-cost home care agencies, and without fixing the disparities between high- and low-acuity plans,” he said.
Legislation has been introduced that would create a $50 million stabilization pool to smooth over those disparities and fill gaps until a long-term solution to the state’s rate-setting formula can be reached.
“It’s not a blanket rate increase,” Lowenstein said. “It concentrates resources where the funding gap is most acute, and it ensures continuity of care.”
Supporters hope lawmakers will push to include the legislation in the state budget through negotiations between legislative leaders and Hochul, set to heat up in the coming weeks.
The bill is sponsored in the Assembly by Health Committee Chair Amy Paulin and in the state Senate by Cordell Cleare, chair of the Committee on Aging. They say the current rate instability puts services for those in need of care at risk of disruption or closure and limits high-acuity plans’ ability to properly pay home care providers — undermining workforce stability at a time when the state is otherwise focused on strengthening home care.
Cleare has prioritized addressing lingering concerns about the CDPAP transition during this legislative session.
“We have to make sure that people are getting paid, that people are on those rolls and that the people who were getting services are getting adequate services,” she said last month.
The issue appears to be a bipartisan concern.
Republican Assemblyman Josh Jensen, ranking member of the Health Committee, stressed that while the intervention is not ideal from a budgetary standpoint, it may be necessary to correct what he characterized as another failure of the CDPAP transition.
“We may have to look at spending $50 million for a screwup,” he said. “Unfortunately, now the state’s taxpayers will have to pay the costs for a plan that wasn’t fully fleshed out with stakeholder buy-in.”
A spokesperson for Hochul told Spectrum News 1 she will review any legislation that passes both houses of the Legislature, sidestepping the question of whether it could be rolled into budget negotiations.
Bryan O’Malley, vice president for external affairs at the Center for Disability Rights of New York State, stressed the need for immediate intervention but expressed support for legislation introduced by Paulin and Senate Health Committee Chair Gustavo Rivera which would reconstruct the state’s policy.
“While the MLTC High Acuity Stabilization Pool is necessary in the immediate term to make sure the system does not completely fail severely Disabled New Yorkers, it is critical to note it is a band-aid, not a fix. The need for this bill is just the latest example that MLTC is a failed experiment that was never designed to meet the needs of the very people it was intended to serve. It is time to stop throwing good money after bad, and eliminate MLTC in favor of the Home Care Savings and Reinvestment Act so we can focus the money on person-centered care people need and use instead of insurance company middlemen that takes hundreds of millions out of the system and offers nothing in return. “