Who’s Funding the Ad Blitz Against Hochul’s Overhaul of New York’s $9 Billion Home Care Program?

A group representing home care go-betweens spent more than $600,000 on ads in June seeking to thwart Gov. Kathy Hochul’s plan to move administration of a $9 billion Medicaid-funded home care program under the control of a single entity.

The Alliance to Protect Home Care reported two expenses dated June 18 and 26 totaling $658,143 in a blitz of print, online and TV advertisements, according to their most recent bi-monthly expense disclosures reported to the state Commission on Ethics and Lobbying in Government on Tuesday.

The program in question, the Consumer-Directed Personal Assistance Program (CDPAP), provides Medicaid dollars for health aides chosen by patients themselves, often family members or loved ones.

In New York, the nearly 30 year-old program is operated by some 600 fiscal intermediaries, including for- and non-profit entities, that provide payroll and administrative oversight — an arrangement that Hochul in July called a “racket” and “one of the most abused programs in the State of New York.”

The governor later clarified those comments when pressed by THE CITY at an unrelated event on Aug. 15.  “The racket part, as I described, was really this middleman,” she said, referring to the fiscal intermediaries. “What I simply looked at was the middleman, middlewoman, people in between who are absorbing dollars that I want to see go directly to these families that need our care. This is never about them getting less.”

The Alliance is headed by Bryan Marcou-O’Malley, the executive director of the Consumer Directed Personal Assistance Association of New York State, the trade group representing intermediaries between Medicaid and caregivers, records show.

From June 12 to 28, six of those intermediaries and one allied group contributed a total of $675,000 to the Alliance, according to a separate disclosure filed on Wednesday. Paramount Home Care Agency, a Brooklyn-based fiscal intermediary, contributed $50,000 to the Alliance on June 20. Caring Professionals, a Queens-based fiscal intermediary, contributed $100,000 on June 17.

“The Alliance to Protect Home Care is proud to support New York’s elderly and disabled and ensure they get the health care they deserve from the comfort of their homes,” O’Malley said in a statement on Thursday. “We’ll continue to make it clear to New Yorkers that Governor Hochul’s plan to outsource this program to one out-of-state corporation will cause harm to this program and those who rely on it, forcing thousands into nursing and group homes.”

The state’s request for proposal does not guarantee the contract will be awarded to an out-of-state company, only that the entity must already be “providing services as a fiscal intermediary on a statewide basis in at least one other state.”

The plan to move the program under the control of a single company is not new. California, Pennsylvania, Massachusetts and other states manage their CDPAP programs under one company. New York is moving forward with a plan to award the contract by Oct. 1, and changes to the program going into effect April 1, 2025.

“These companies are taking a cut of taxpayer dollars that are supposed to pay for home care – and now they’re spending big money on attack ads to protect their own profits,” Hochul spokesperson Sam Spokony told THE CITY in a statement on Thursday. “This is exactly why we’re reforming the program — to protect CDPAP users and caregivers, cut out hundreds of middlemen, and ensure taxpayer dollars are effectively serving the New Yorkers who receive care at home.”

Mixed Support

Last month, the Alliance and its supporters, including several home care workers and patients, protested outside of the United Hospital Fund Medicaid Conference in Midtown Manhattan bearing signs that read “My home care is not ‘a racket!’”

In op-eds and events, the Alliance has characterized Hochul’s plan as one that will gut Medicaid and kill jobs in the home care sector, leaving workers and the vulnerable people they care for in the lurch. Hochul has repeatedly insisted that her proposal will help more Medicaid money to flow directly to consumers and workers.

Since the proposed changes were first introduced as part of the $233 billion state budget in April, other groups representing those fiscal intermediaries filed lawsuits seeking to stop the switchover and charging that the state violated CDPAP regulations. On Wednesday, more than two dozen Democratic state senators urged the U.S. Centers for Medicare and Medicaid Services to stop the switchover.

Some of the concerns stem from the very real payment delays in Massachusetts and Pennsylvania immediately following the switch of their CDPAP programs to the control of one fiscal intermediary in 2022. Some consumers were reportedly forced to temporarily lend their care workers money in order to retain them.

1199SEIU, which represents 10,000 CDPAP home care workers across the state and supports the governor’s plan, is working on a series of formal proposals to prevent the same from happening in New York, said Helen Schaub, the union’s interim political director. Among them: phasing in the program by county and requiring whatever company is awarded the contract to work with at least two existing subcontractors in each region to ensure language access and other community needs.

Administrative costs began to balloon since a 2012 increase in the number of for-profit intermediaries, said Schaub. An NBC New York investigation found that CDPAP intermediaries collectively billed more than 328 million hours of home care in 2023, a 262% increase since 2018.

In spite of this, audits from the state’s Medicaid Inspector General in 2022 reviewed $37 million in claims and found that 99% of them were accurate. The increase in for-profit fiscal intermediaries together with rising costs suggests much of the new spending is going towards profits and executive compensation, said Schaub.

In 2022, executive pay at Paramount, one of the Alliance’s funders, topped $3.4 million, with a third of that going to its CEO, Marina Offengeym, according to an 1199SEIU analysis of publicly available Home Care Cost Reports.

At Caring Professionals, another funder of the Alliance, executive compensation totaled more than $4 million in 2022, according to that same analysis. Representatives from both agencies did not immediately respond to a request for comment.

“Our objection is not that the fiscal intermediaries have done anything that is illegal or fraudulent,” said Schaub. “It’s that the system is structured in a way that allows them to take large amounts of money out in admin and profit. It’s not currently, you know, illegal for them to do that, but it is not a good use of taxpayer dollars.”

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