Why Has CDPAP Become So Popular? 

Publicity. Radio, newspaper, and subway ads are driving Medicaid home care clients and home care workers to abandon traditional home care agency programs for the greater flexibility and freedom of choice of New York’s Consumer Directed Personal Assistance Program (“CDPAP”). Managed care companies are also on board, offering this as an alternative to traditional home care. The benefits to all are many and the restrictions are few, unlike traditional home care.

Contracts. Managed care companies contract with a “Fiscal Intermediary,” a business entity created solely to provide payroll and benefit administration services under the CDPAP. The Fiscal Intermediary, in turn, contracts with Medicaid recipients, known as “Consumers,” referred by the managed care company.

Independent Living. Consumers are free to employ their own workers, known as “Personal Assistants.” Generally speaking, Consumers choose who, when, and where their Personal Assistants will work for them and what duties and responsibilities they will perform.

Family Employment. What’s more, Consumers can hire their own family members and relatives, even those who live with them in the same home in most instances (except for spouses, legally responsible individuals, such as a minor’s parents, and persons chosen as “Designated Representatives”).

What is the Business Risk? 

Held to be a Joint Employer. It is all too easy to become a “Joint Employer” with a Consumer’s Personal Assistants over whom the Fiscal Intermediary has no supervision or control. If the Consumer is acting unlawfully in any way, you are liable too. For example, the U.S. Department of Labor has warned that, for a “Medicaid-funded consumer directed program,” any “agency that administers the program” may be a joint employer, “responsible, both individually and jointly, for compliance with all of the applicable provisions of the [FLSA].”

How to Shield Your Agency. To avoid the specter of joint employment, a Fiscal Intermediary must learn about and obtain policies, procedures, agreements and forms substantially different from a traditional home care agency.  It must also think and act differently when dealing with Consumers and their Personal Assistants.

What is the Regulatory Risk?

NYS Regulations. A Fiscal Intermediary is responsible for (i) “monitoring the consumer’s or, if applicable, the consumer’s designated representative’s continuing ability to fulfill the consumer’s responsibilities under the program,” (ii) “ensuring that the health status of each consumer directed personal assistant is assessed” both prior to service and annually; and (iii) preventing fraud, abuse and waste of Medicaid payments and reimbursements. To operate successfully and at a profit, a Fiscal Intermediary must learn how to meet these regulations.

FordHarrison has a six attorney Home Care Industry Group to represent, advise and counsel home care agencies on all labor, employment and benefit issues. If you have any questions regarding this Legal Alert or would like our advice about particular facts and circumstances of your CDPAP, please contact the author, Stephen Zweig in the firm’s New York City office at szweig@fordharrison.com, or (212) 453-5900, or the FordHarrison attorney with whom you usually work.

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