Governor Hochul’s Executive Budget Proposal Calls for Significant Changes to New York’s Consumer Directed Personal Assistance Program

UPDATED March 12, 2024: The Senate and Assembly have released their respective One-House Budget proposals. The Senate’s proposal intentionally omits the entire section regarding the Consumer Directed Personal Assistance Program (CDPA Program) that Hochul included in her 30-day amendments to the Executive Budget Proposal, which we discussed in detail below.  The Senate’s proposal also intentionally omits Hochul’s proposed section dedicated to the elimination of wage parity benefits for personal assistants in the CDPA Program.  Similarly, the Assembly’s proposal rejects all of Hochul’s proposed changes to the CDPA Program.  Final budget negotiations will begin soon.

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  • NY budget amendment proposal would make significant changes to the state’s Consumer Directed Personal Assistance Program.
  • Potential changes would impact the home health industry, including, among other changes, eliminating the FI RFO, providing daily and weekly work hour limits and prohibiting entities from engaging in multiple types of healthcare services.

Last month, Governor Hochul announced her Executive Budget Proposal for the 2025 fiscal year, which includes the elimination of wage parity benefits for personal assistants who work through the Consumer Directed Personal Assistance Program (“CDPA Program”). The CDPA Program, funded through Medicaid, allows chronically ill and/or disabled individuals (consumers) to engage and employ personal assistants (from recruitment through termination) to provide home health services for them, while a fiscal intermediary (FI) performs wage and benefit processing. As part of the budget amendment process, on February 15, 2024, Hochul released her 30-day amendments to the Executive Budget Proposal, including a new section to the Health and Mental Hygiene Budget with 15 pages that are dedicated almost exclusively to the CDPA Program. These amendments purport to bring significant changes to the CDPA Program, including suggested alterations to the roles and responsibilities of consumers, personal assistants, and FIs, and to the home health care industry, including maximum limits on daily and weekly work hours and prohibitions on entities’ abilities to engage in multiple types of healthcare services concurrently. 

The “Request for Offers” procurement process that has been ongoing since December 2019 would be repealed and replaced with an authorization process.  Specifically, as of January 1, 2025, entities would be able to provide FI services, directly or through contract, if they have an authorization issued by the New York State Department of Health (NY DOH). FIs that have been in operation since before January 1, 2024 would be able to continue providing services without an authorization until the NY DOH determines that these services through unauthorized FIs are no longer necessary to ensure adequate access to the CDPA Program.  The determination could be made on a statewide, regional, or county basis.

Under the governor’s proposal, which would need to be accepted by the legislature through the state budget process, the definition of a “fiscal intermediary” would be changed to “an entity that provides fiscal intermediary services and has a contract” with:

  1. a local department of social services (LDSS);
  2. a health plan licensed under Article 44 of the Public Health Law (such as a managed care organization); or
  3. an accountable care organization certified under Article 29-E of the Public Health Law (ACO) or an integrated delivery system recognized by the NY DOH as a provider system in the Delivery System Reform Incentive Payment Program.

Importantly, when establishing authorization standards and processes, the NY DOH could “consider [an entity’s] demonstrated compliance with all applicable federal and state laws and regulations, including but not limited to, marketing and labor practices, cost reporting, and electronic visit verification requirements.”

The NY DOH would also be empowered by these amendments to:

  • revoke, suspend, annul, and/or limit a FI’s authorization without providing written notice as to the reason for doing so;
  • “issue orders and take other actions as necessary and appropriate to prohibit and prevent the provision of FI services by an unauthorized entity”; and
  • determine, on a statewide, regional, or county basis, the maximum number of FIs a(n) LDSS, health plan, ACO, or integrated delivery system could contract with, so long as adequate access to services remains available.

Nonetheless, an entity would retain its right to an Article 78 hearing (to contest any such action that is individually directed at its operations).

In furtherance of her intention to “eliminat[e] conflicts of interest,” the governor proposes that as of April 1, 2024, a Licensed Home Care Services Agency (LHCSA) would be prohibited from enrolling or re-enrolling into the Medicaid program if the LHCSA:

  • is majority-owned by a company which provides FI services;
  • is majority-owned by a company which also has a majority-ownership over a company that provides FI services;
  • provides FI services itself in the state CDPA Program; or
  • is the majority-owner of a company that provides FI services.

For the purposes of this proposed prohibition, which would be added as a new section (g) to Public Health Law § 3605(c), the terms “majority-owned” or “majority-ownership" are “defined as controlling interest in a company or being the largest holder of the common stock or ordinary shares of a company.”

The proposal, effective April 1, 2025, seeks to prohibit health plans from providing FI and/or LHCSA services.  Additionally, by April 1, 2025, health maintenance organizations and managed long-term care plans must reapply for certificates of authority if they:

  • currently provide FI and/or LHCSA services;
  • are controlled by an entity which provides FI and/or LHCSA services;
  • have control over an entity which provides FI and/or LHCSA services; or
  • are controlled by an entity which also has control over an entity that provides FI and/or LHCSA services.

Notably, several hallmarks of the CDPA Program, which are currently outlined in Section 365-f of the Social Services Law, would be eliminated.

First, an individual seeking to enroll as a consumer would no longer be able to appoint someone else as their “designated representative” to make informed choices about the “type and quality of services” to be provided to the consumer.  In other words, only those individuals who are themselves “able and willing to make informed choices as to the type and quality of services” will be able to participate as consumers in the CDPA Program.

Second, when engaging in recruiting and hiring decisions, a consumer would be under a new obligation to ensure that a candidate met the “minimum selection criteria” for a personal assistant set forth by the NY DOH.

Third, consumers would not hold the sole responsibility for training their personal assistants.  Rather, personal assistants would be mandated to complete additional “training requirements” in accordance with the NY DOH’s regulations.

Fourth, FIs would be even more restricted with respect to the services they could “perform[] on behalf of the consumer to facilitate their role as the employer.”  Specifically, under current legislation, FIs have been permitted to perform “other related responsibilities, which may include, as determined by the [NY DOH], assisting consumers to perform the consumers' responsibilities under this section and [NY DOH] regulations in a manner that does not infringe upon the consumer's responsibilities and self-direction.” Social Services Law § 365-f (4-a)(ii)(J).  However, if the governor’s proposal is approved, FIs would be prohibited from performing any responsibilities that are not specifically enumerated in the law.

Fifth, a consumer’s freedom to set their personal assistant’s schedule could be significantly limited by any “regulations, including emergency regulations” established by the NY DOH as to the number of hours a personal assistant may work on a daily and weekly basis.” 

Of note, the governor’s desire for the NY DOH to promulgate regulations, including emergency regulations, to establish “maximum daily and weekly hours” for home care workers extends outside of the CDPA Program.  Indeed, the proposal calls upon the NY DOH to implement these maximum work hour limits on “any individual aide providing personal care services” pursuant to Section 365-a (2) of the Social Services Law.

Next Steps

The governor will engage in negotiations with state legislators with the intent to reach an agreement on the entire budget by April 1, 2024, which is the date on which the State Budget “must” be passed.  However, the April 1st deadline is often extended several weeks as a result of extensive negotiations, as it did last year.

We will follow for the legislators’ proposals and compare those with the governor’s and will provide an update once the budget process is completed.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.