Report Sees Economic Hit from Cuts to Medicaid Program for Aides

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A poster in the Bronx advertising one element of CDPAP, a program that could see significant change under the state budget.

Over $500 million in wages to New Yorkers would be imperiled, statewide, if cuts to a Medicaid program in the governor’s budget are adopted, a trade group says in a report released Wednesday.

The Consumer Directed Personal Assistant Program or CDPAP allows elderly and disabled people to hire personal assistants of their choosing, using companies called fiscal intermediaries (FIs) who handle payroll and consultation.

Over 600 FI’s exist statewide, but the governor’s executive budget put forth a proposal that, critics say, would cut that number by at least 90 percent by changing the eligibility requirements. The budget separately puts forward an additional $75 million in cuts to the program. The State Senate, in its budget proposal restored the money and eliminated the regulatory language that cuts FI’s. The Assembly also eliminated the language in its budget but kept the cuts, which amount to 17 percent.

CDPA Association of New York State (CDPAANYS), which conducted the survey, is a trade group that advocates on behalf of fiscal intermediaries. In the report, CDPAANYS collected data on 20 percent of CDPAP enrollees statewide, focusing on those who’d be forced to change payroll companies under the governor’s budget proposal.

The group calculated the total amount of wages paid to personal aides through payroll companies that wouldn’t exist under the executive budget. The group did not extrapolate the impact to the whole system, focusing the data on the 20 percent of impacted enrollees they could tabulate. Overall 13,000 CDPAP enrollees and 20,000 personal aides are accounted for in the data – about one fifth of the overall number that Cuomo’s critics say will be forced out of their current provider.

While the new survey provides a broad look at the economic activity tied to fiscal intermediaries, it’s a matter of dispute as to whether the dollar amounts provided should be counted as lost wages. The governor’s office has claimed that none of the consumers currently enrolled in CDPAP would be dropped as a result of the cuts to FI’s and the CDPAP budget. Those displaced consumers will transition to the handful of remaining fiscal intermediaries, the state says. But even those FI’s would have lower reimbursement rates under the proposal and would be under more financial stress.

Legal experts who spoke to City Limits for a prior story on these cuts said that it is highly likely that some CDPAP enrollees would drop out of the system altogether under the governor’s proposal, but how many is unclear.

In stark contrast to the governor’s estimate, Bryan O’Malley, head of CDPAANYS, says he expects most of the currently enrolled CDPAP users to exit the program, out of frustration with the chaos or because the dwindling number of FI’s will have made the entire program untenable.

“We do not work in the same reality that they do,” O’Malley says of the Governor’s more optimistic prediction. Of the 70,000 enrollees in CDPAP statewide, the trade group has previously estimated as many as 60,000 will be forced out of their fiscal intermediary. And most won’t be back, in O’Malley’s prediction.

“Frankly, of the 50,000, a good majority will not transfer. We don’t think that transition will happen. It’s going to be chaos,” he says.

To calculate the economic impact, CDPAANYS reached out to fiscal intermediaries in their membership and allowed them to run their data through a system called Geocode. The system tabulated users of CDPAP and the number of personal aides they hired by Senate and Assembly District, then sent the aggregated data back to the trade group

CDPAANYS staff then calculated the total wages being paid to personal aides using the minimum wage for each region. They assumed that each personal aide was working a 40-hour workweek for 52 weeks a year, and concluded their 20 percent sample alone accounted for $500 million in wages.

It’s difficult to determine based on the data whether overnor’s budget would have disproportionate impacts in any region, since the survey is skewed toward those who were more likely to respond. New York City and the capital region are overrepresented in the data for this reason, O’Malley says.

But the report does indicate that some legislative districts will have hundreds of CDPAP users affected by the governor’s budget proposal. In Sen. James Sanders Jr.’s Brooklyn Senate District, for instance, at least 536 enrollees hire 819 personal aides, whose combined wages are $25 million a year under CDPAANYS’s formula. Senate Majority Leader Andrea Stewart-Cousins has at least 153 CDPAP enrollees in her district, and Assembly Speaker Carl Heastie has at least 105.

The governor’s budget would most likely have the most consequences for the upstate region, advocates agree, because FI’s are already thinly-spread and a shortage of home health aides in nursing homes leaves few other options.

The Governor’s Medicaid Redesign Team created the Managed Long Term Care system, a private insurance model in which CDPAP exists, in order to cut costs and eliminate fraud and waste. Budget proposals that cut administrative overhead are par for this strategy. Advocates say that some FI’s are abusing the CDPAP program but would like the state to complete a certification process it began last year rather than cut 90 percent of the companies.

“There will be changes, the extent we do not know. What we are hoping is that people will listen to those who know the program,” O’Malley says.

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