NY lawmakers fight gov’s plan to reform murky $6B Medicaid program

Albany lawmakers are rejecting Gov. Kathy Hochul’s efforts to rein in a popular $6 billion Medicaid homecare program that critics say is extremely susceptible to abuse.

Legislators are going on the offensive after the release of their own budget proposals last week, calling the governor’s slated reforms to the Consumer Directed Personal Assistance Program, or CDPAP, an attack on elderly and disabled people who rely on the program as an affordable means to get homecare.

“I’m terrified I’ll be forced into deadly and abusive facilities in light of the governor’s proposed draconian budget cuts to homecare, specifically the Consumer Directed Personal Assistant Program,” Geri Mariano, 56, a recipient within the program said at a recent press conference hosted by the powerful healthcare union 1199 SEIU.

“Honest to God, I don’t know why Governor Hochul hates me and all others wanting to remain in our homes with these programs,” Mariano continued.

The program allows relatives, friends or other close acquaintances of disabled or elderly adults below a certain income level to get paid more than $43,000 a year to act as a caregiver.

Funding for the caregivers flows through financial middlemen, which pay the caregivers and get reimbursed through state and federal Medicaid dollars — while taking a small cut.

Critics of the program argue that it lacks sufficient oversight or structural checks-and-balances to prevent fraud and abuse.

A 2020 bust by the FBI alleged that a Brooklyn-based agency was manipulating the hours its clients in the CDPAP were working, scalping millions of dollars of state and federal Medicaid dollars in the process.

Investigators found some aides had been billing hours while they were really on a cruise or sipping wine at a New Jersey vineyard.

As part of her $233 billion state budget proposal, Hochul is calling for several new reforms for CDPAP. These include limiting the number of hours a single caregiver can work in a week as well as giving the state Department of Health broader authority to regulate how the financial middlemen in the system operate.

Hochul estimates these regulatory changes could save the state $100 million per year.

Additionally, Hochul wants to eliminate the $1.55-per-hour boost to the minimum wage for CDPAP aides in New York City and Westchester, Nassau and Suffolk counties. The governor’s budget office estimates that cut would also save the state around $100 million per year.

The governor has made reigning in Medicaid spending — the second costliest part of the state’s discretionary budget behind school funding — a major priority.

New Yorker taxpayers are expected to spend over $30 billion on Medicaid programs in the 2025 budget.

“The cost of this program has spiked by a massive 1,200% in just eight years, threatening our ability to pay for other critical health care services and balance our budget,” a Hochul spokesperson told The Post.

“We need common sense reforms to protect New Yorkers who rely on home health care and to safeguard taxpayer dollars.”

Lawmakers who showed up for the 199SEIU healthcare workers union’s press conference in Yonkers Friday questioned the governor’s assertions about fraud within the program.

“For me, I haven’t seen evidence,” state Sen. Shelley Mayer (D-White Plains) told the Post.

“To the extent that there are specific, identifiable, evidence-produced examples that need fixing in the policy, of course, the door is open,” Mayer added.

Mayer also flatly rejects the idea of removing the $1.55 wage boost for CDPAP aides in New York’s most expensive counties.

Around a quarter of a million New Yorkers utilize CDPAP as of last year, up more than 78% from 140,000 beneficiaries in 2015 according to Department of Health data. The exploding popularity of the program is evident as agencies try to recruit more caregivers — taking out subway ads, TV commercials and even enlisting TikTok influencers to spread the word about the program.

“That is one of the things that has been talked about, ‘We’re going on TikTok saying take care of grandma and get paid,’” Assemblywoman Maryjane Shimsky (D-Tarrytown) said.

“You know, what? People who take care of grandma should be able to make some money, first of all. And second of all, this is a great public policy option,” she said, pointing to the much higher costs of caring for elderly and disabled people in nursing homes.

199SEIU, one of the state’s most politically influential unions, has already been working to thwart Hochul’s Medicaid reform efforts.

1199SEIU and their close ally, the Greater New York Hospital Association, launched a new ad campaign earlier this year criticizing Hochul for proposing Medicaid reforms.

Recent reporting by the Post found that state taxpayers spent $49 million to bail out a floundering 1199SEIU health insurance fund for its own homecare workers.

“The legislature is right to reject the Governor’s dangerous cuts to worker wages and consumer hours in the Consumer Directed Personal Assistance Program,” 1199SEIU United Healthcare Workers East wrote in a statement to the Post.