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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.

April 12, 2024

The New York FY 2025 Budget – CDPAP FIs Under Threat

New York is currently considering legislation as part of the New York State Fiscal Year 2025 budget that would eliminate an entire segment of the state’s network of care providers—Consumer Directed Personal Assistance Program (CDPAP) Fiscal Intermediaries (FIs). CDPAP is a Medicaid program that enables individuals who would otherwise require institutionalized care to receive care and assistance at home from a caregiver chosen by the CDPAP recipient. Because the CDPAP recipient is, in effect, the employer of the caregiver, the statutory and regulatory framework for CDPAP includes FIs as part of CDPAP. FIs are private companies and organizations that provide wage and benefit processing, income tax processing, compliance with workers’ compensation, personnel records maintenance, and other fiscal and administrative services that most CDPAP recipients would be unable to manage on their own. There are currently several hundred FIs throughout New York State.

In a previous legal alert, we reported on the impacts to long-term care from the governor’s budget proposal, some of which would have affected CDPAP. We reported, at that time, that the initial Executive Budget left the CDPAP RFO #20039 intact. CDPAP RFO #20039 was a multi-year process through which the state sought to reduce the number FIs in New York State and transfer the contracting process to the Department of Health (DOH). Contract awardees under RFO #20039 were named earlier in 2023, and awardees were waiting for contracts from DOH.

Since that time, however, Governor Hochul’s administration released its 30-day amendments to the FY 2025 Executive Budget on February 15, 2024. Among many other changes to CDPAP, those amendments would have eliminated RFO #20039 by repealing Social Services Law 365-f(4-a)(b-1), (b-2), and (b-3); allowed managed care entities and local social services districts to continue to contract directly with FIs; and created a new DOH-governed authorization process for FIs. The authorization process would have served a gatekeeping function and created a process through which DOH would determine which entities can serve as FIs in New York State.

Now, some sources are reporting that even more radical changes to CDPAP are being considered, which would supersede all the potential changes discussed above. The governor’s administration and the legislature may be considering amending CDPAP to eliminate not only RFO #20039 but also the entire current network of FIs and replace those FIs with one state-wide FI or several regional FIs to provide FI services to all of New York State’s CDPAP recipients. As the budget process is nearing the end, this is a time-sensitive and critical issue for the state’s current network of FIs.

If you have any questions regarding the content of this alert, please contact Linda Clark, Health Care Controversies Team co-leader, at; Michael Scott-Kristansen, special counsel, at; or another member of the firm’s Health Care Controversies Team.

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