NY Medicaid program set to change despite criticism by Haredi business owners, others

Changes to CDPAP are meant to reduce fraud

NY State Capitol Building. Credit: Shtetl

Apr 19, 2024 7:35 PM


State legislators passed a bill on Friday that makes changes to a Medicaid program despite criticism by Haredi business owners and others.

The program, the Consumer Directed Personal Assistance Program, also known as CDPAP, was expanded in 2015 to allow people to get paid for taking care of their elderly or disabled family members and friends.

Critics say that the expanded program’s large size and loose oversight made it vulnerable to fraud. But many activists, including Haredi business owners, fear that the changes passed on Friday will harm people the program is meant to serve, along with people employed in administering the $6 billion program. 

“The planned changes to the CDPAP program (in NYS budget) will lead to thousands of jobs losses,” wrote Yosef Hershkop, a Crown Heights businessman who works for the urgent care center Kamin Health, in a post on LinkedIn before the bill passed. “In my neighborhood, we are easily talking about 100s” of job losses. 

Changes to the program in 2015 aimed to help elderly and disabled people stay at home and avoid nursing homes and assisted living facilities, which are costly for taxpayers. After that, the number of businesses and nonprofit organizations, or “fiscal intermediaries,” that administer the program exploded – from just 7 to 700, one critic told the New York Post. Critics say fraudulent claims have cost the taxpayers mightily.

In 2020, the FBI accused CDPAP home aides of working with a fiscal intermediary to illegally bill the state for hours they spent socializing and, in one case, on a Caribbean cruise when she was supposed to be taking care of a Brooklyn patient. The bill, which was passed as part of the state budget, keeps the expanded eligibility, but reduces the number of fiscal intermediaries that administer the program.

Under the bill, one fiscal intermediary will administer the program for the entire state. That company, which would be required to have "demonstrated cultural and language competencies" and "experience serving individuals with disabilities," would then select subcontractors to serve various regions in the state. The subcontractors have to have been in business since 2012, before the program expanded.

David Inzlicht, CEO of the fiscal intermediary Attending Home Care, said in an interview with Shtetl that none of the few businesses that qualify under the new bill are Haredi–owned, and his company will no longer be able to work in CDPAP.

Hershy Marton, the CEO of the fiscal intermediary Marton Care, posted on X after the bill passed. “Imagine building a company from ground up for 7 years and then the government takes it away from you in a budget cut,” Marton wrote.

On Monday, Marton posted a video on X from a protest against changes to CDPAP. “Save CDPAP,” the protesters in the video are heard chanting.

Some disability advocates and politicians also opposed the idea of reducing the number of fiscal intermediaries to just one. Queens Assemblymember Ron Kim, for example, said last week that the notion “sounds like a recipe for corruption.”

“The state should not try to fix broken markets (which the state created) by creating a mega-monopoly system,” Kim wrote on X, formerly Twitter.

Inzlicht said the bill will make it harder to serve ethnically diverse communities.

“Take an area like Boro Park and Flatbush. You have Arabs, you have Jewish people, you have Italians, you have Bengali people, so you’re going to take one subcontractor?” Inzlicht asked. 

“It’s even more costly because now you have two people dividing the profit: the FI and the subcontractor, and people won’t have the language they need and the local person that helped them.”

Senator Julia Salazar, whose district includes Hasidic South Williamsburg, said on Monday that she was against changes to CDPAP. “We are continuing to fight to preserve CDPAP and demand that any changes in the state budget do not negatively impact CDPAP care providers or their patients,” Salazar wrote on X.

Due on April 1, the budget is now nearly three weeks overdue, as lawmakers seek to use the budget to address policy issues. Lawmakers began passing parts of the state budget on Thursday after reaching deals with Hochul on policy matters.

The governor’s press office did not immediately respond to questions from Shtetl.