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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

February 6, 2023

NYS Governor Hochul's Budget Places the Future of the CDPAP RFO in Doubt

The New York State 2024 Executive Budget, released on February 1, 2023, proposes significant changes for the state’s Consumer Directed Personal Assistance Program (CDPAP). The budget includes a proposal to replace wage parity with subsidies designed to assist CDPAP workers with purchasing health insurance through New York State of Health, New York’s health plan marketplace, and would give the Department of Health (DOH) more flexibility to suspend or limit fiscal intermediaries’ (FI) authorizations to participate in the program. As set forth below, it is the proposed changes to the CDPAP FI request for offers (RFO) legislation, however, that may prove to be the most significant and leave many unanswered questions regarding the future of the CDPAP RFO for all FIs.

Governor Hochul’s budget would amend SSL § 365-f by deleting the paragraphs that required the DOH to commence the first round of the CDPAP RFO process as well as key paragraphs that required the DOH to issue a second round of awards through the attestation process. The bill replaces those provisions with a new authorization process, described as follows:

“As of January first, two thousand twenty-four no entity shall provide, directly or through contract, fiscal intermediary services without an authorization as a fiscal intermediary issued by the commissioner in accordance with this subdivision. The commissioner may issue regulations, including emergency regulations, clarifying the authorization process, standards and time frames.”

This change would remove the statutory authority for the CDPAP RFO process and raises many critical questions for the industry, including whether the DOH will place the RFO and attestation process on hold while the budgetary process unfolds and, if the bill is enacted in its current form, whether the DOH will replace the RFO and attestation process entirely and issue a new process for authorizing FIs.

The supporting memorandum does not answer these questions, but it does provide some context for the changes. The memorandum explains that the change to the FI authorization process will accompany new performance standards for managed long-term care (MLTC) plans requiring plans to contract with the minimum number of FIs needed to provide necessary CDPAP services. The memorandum also states that the amendments to SSL § 365-f will “repeal the fiscal intermediary (FI) procurement process as FI contracting is addressed through the MLTC plan performance standards process.”

This explanation, describing how contracting responsibility will be shifted to MLTC plans, aligns with other proposed changes to SSL § 365-f in the budget bill, which redefine FIs from (1) entities that provide FI services under contract with the DOH according to the CDPAP RFO process to (2) entities that have a contract for providing FI services with a local department of social services, an Article 44 entity (managed care plan), or an accountable care organization or integrated delivery system. When read together, the supporting memorandum and the new proposed statutory definition for FIs make it appear as though the state intends to transfer responsibility for contracting with FIs from the DOH to the health plans and the counties, presumably for managed Medicaid and fee-for-service Medicaid respectively, reserving to the DOH authority over authorizing FIs to participate in CDPAP. While this appears to be a potential radical change in direction on the RFO process, the budget’s proposed two-part authorization and contracting process would align FI CDPAP participation requirements to look more like the current process for other Medicaid providers.  

These proposed changes, however, come at a time when many FIs are waiting with bated breath for the results of the CDPAP RFO attestation process, which was recently delayed until April 2023. FIs have languished and struggled through the yearslong RFO and attestation process. Many FIs, at times, have believed their businesses were in imminent danger of being eviscerated by the much-maligned RFO process. 

Depending on whether the budget legislation is passed in its current form and how it is implemented, the new proposed process may provide some relief to the state’s FIs or exacerbate FIs’ woes as they navigate not only a DOH authorization process but also a county and managed care contracting process. These changes, if they eliminate the RFO, could throw into doubt the future of not only the FIs that did not meet the 50/200 threshold for the attestation process but also the FIs that anticipated awards based upon the attestation process. The changes, without clear and precise limits or any willing provider legislation, will hand over control of CDPAP to health plans, which will be empowered to decide which FIs to admit to their networks and correspondingly limit beneficiaries’ choice of FIs. Even FIs that were entitled to a contract under the RFO may find themselves excluded by the plans’ contracting process. In light of the fact that just one year ago the proposed budget for 2023, by creating an RFO for managed Medicaid plans, reflected a concern about limiting and controlling which health plans would be permitted to participate in managed Medicaid (the 2023 Health and Mental Hygiene Memorandum in support is available here), this is a curious change in trajectory that begs for more explanation.

If you have any questions regarding the content of this alert, please contact Linda Clark, Health Care Controversies Team leader, at lclark@barclaydamon.com; Michael Scott-Kristansen, special counsel, at mscott@barclaydamon.com; or another member of the firm’s Health Care Controversies or Health & Human Services Providers Teams. 
 

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