“We know that taxpayer dollars earmarked for home care are often misspent on excessive administrative costs and million-dollar executive salaries. Thoughtfully transitioning this program is key to ensuring that vulnerable New Yorkers can continue living with dignity in their own homes – and also protecting the caregivers who provide so much support for seniors and those living with disabilities.”
George Gresham
President, 1199SEIU United Healthcare Workers
How Did We Get Here?
The Consumer Directed Personal Assistance Program, or CDPAP, started as a grassroots led program created by people with disabilities to allow them to come home from institutions.
In 2012, personal care services became provided by Medicaid Managed Care insurance plans. Over the next decade, the industry saw an explosion of for-profit fiscal intermediaries in the industry. Many of these for-profit FIs were able to co-opt a well intentioned program, pushing up costs as these companies increased their profits and paid out large executive salaries on the backs of taxpayers and caregivers.
Under managed care control, our consumer directed care system now has ballooned to a $7 billion program with 700 unregulated middlemen fiscal intermediaries - the majority for-profit businesses - acting as “brokers,” passing Medicaid dollars to caregivers who are directly hired by consumers. These middlemen fiscal intermediaries - who often also operate licensed home care agencies - are accountable to no one, resulting in “some of the worst violators of wage theft laws” in New York City and exorbitant executive salaries made on the backs of caregivers and taxpayers.
Home care agencies like Paramount Home Care Agency and X-treme Home Care owe over $800,000 in back wages to caregivers, while Paramount Home Care CEO Mariya Offengeym earned over $1 million in salary in 2022. Other home care companies are also paying executive salaries over $400,000+ year, while caregivers on average earn less than $22,000/year.
“Three agencies [opposing CDPAP updates] together owe close to $1 million to more than 160 workers, according to the Comptroller’s records. One of them, Borough Park-based X-Treme Home Care, was found to owe $522,000 to 12 claimants in 2022. Another, Paramount Home Care Agency in Gravesend, owed nearly $300,000 to 153 workers. That company is run by CEO Mariya Offengeym, who earned over $1 million in salary in 2022, according to state records.”
Crains NY
This inefficiency and abuse of the CDPAP program costs New York up to $1 billion in taxpayer money.
Why Now?
Since 2018, spending on CDPAP has gone up 23% each year under managed care, drawing increased scrutiny. In 2019, the Legislature passed reform to require FIs to contract with the state, and significantly limit the numbers of FIs to bring these out of control costs down, but it was never fully implemented after fierce industry opposition.
This year, the NY Legislature enacted a new law in the FY2025 budget approval process.
Rather than cutting services or caregiver wages to keep the program going, the reform is going after exploitative agencies/FIs and out of control administrative costs, implementing a streamlined CDPAP program similar to a dozen other states like Washington and Pennsylvania. The long overdue changes to consumer directed care will bring accountability, efficiency, and better quality care to the NY home care industry.