Judge: Rate cut plan unconstitutional

State’s reimbursement methods for home care program declared null and void

More than 75,000 older and disabled New Yorkers who rely on a popular home care service are cheering a court ruling that declared the state’s recent cuts to the program unconstitutional.

It wasn’t the cuts that Albany County Supreme Court Justice Christina Ryba took issue with, but the way the state Department of Health implemented them.

In a judgment published Friday, she said the department violated both the state constitution and the state Administrative Procedure Act when it implemented a new rate reimbursement methodology for the state’s Consumer Directed Personal Assistance Program without first filing the change with the Department of State and affording the public an opportunity to comment.

The department had argued the new rate structure was exempt from SAPA because it was not making a new rule, but applying a plain-language interpretation of existing rules and regulations when it altered the methodology. Ryba disagreed.

“While the plain language of the regulation permits the Department of Health to establish reimbursement rates, an agency cannot grant itself the sweeping discretion to circumvent or supersede the requirements of SAPA by merely including such broad language in its own regulations.”

She declared the changes null and void, and directed the department to return to the previous methodology until it complies with SAPA.

The state Department of Health said Tuesday it’s reviewing the decision.

“As we have stated previously, the state remains committed to the consumers in the (program),” spokeswoman Erin Hammond wrote in an email.

The Consumer Directed Personal Assistance Program allows people with disabilities and chronic illnesses to receive care in their homes by a person of their own choosing, an element that has made the program exceptionally popular.

But as its popularity grew, so did its costs. New York sought to rein them in by changing the way it pays fiscal intermediaries — agencies that administer the program and process payments to home care workers. It shifted the pay structure from one based on hours worked to a monthly, permember basis.

Bryan O’malley, executive director of the Consumer Directed Personal Assistance Association of New York State, said the rate changes represented a roughly 80 percent cut to what agencies would have received to administer the program.

Many of the 600 fiscal intermediaries statewide would have gone bankrupt within a year, advocates argued.

“We are thrilled with Judge Ryba’s ruling,” he said. “The state has to go back to the drawing board. They need to do their due diligence and follow the SAPA

process to determine what the impact is not just on agencies, but on consumers and counties and others who would potentially be impacted.”

O’malley said the industry acknowledges the state’s need to rein in costs, but that there are other ways to do so without crippling the intermediaries who administer the program.

He said state funds are often used to boost wages and pay for overtime, which is essential in areas with fewer home care workers. Many home care workers make minimum wage or just above minimum wage, he said.

Because the changes went into effect Sept. 1, some agencies have already been impacted, he said. At least one fiscal intermediary in the North Country has shuttered, he said, and others have cut overtime and wages. Some workers were forced to quit, he said.

The association is currently talking with attorneys about ways to recoup financial losses from the rate change now that it’s been declared null and void, he said.

“Unfortunately for consumers who were forced to leave the program or workers who were forced to quit, that’s going to be harder to undo,” he said.