The State Budget: What CDPAP Fiscal Intermediaries Need to Know

Authors: Stephen E. Zweig, Phillip Davidoff, Eric Su

Executive Summary. The New York State Fiscal Year 2018-19 State Budget (“Budget”) includes significant changes for fiscal intermediaries (“FIs”) under the Consumer Directed Personal Assistance Program (“CDPAP”). Effective immediately, FIs must receive New York State Department of Health (“DOH”) approval for all advertising material and provide the DOH with cost reports upon request.

Budget Highlights

DOH Must Pre-Approve FI Advertising

• FIs must submit all advertisements to the DOH prior to putting the advertisement into use.
• “Advertisements” is defined broadly to include any material in any medium “that can reasonably be interpreted” as marketing the FI’s services.
• FIs are not allowed to publish any “false or misleading” advertisements.
• FIs must remove or stop using any unapproved or “false or misleading” advertisement within 30 days of receiving notice from the DOH.
• If the DOH determines that an FI used two or more unapproved or “false or misleading” advertisements, the FI will be prohibited from providing services and its FI authorization will be revoked.

Overseeing advertising shows the DOH’s intent to more closely control the way FIs solicit clients. The DOH will have broad discretion in determining what is “false or misleading.” The DOH had already requested all advertising materials be submitted with the FI authorization application. The Budget now gives the DOH clear legal authority to require submission of marketing material prior to use by an FI and to revoke FI authorizations for two violations of its “false or misleading”
standard.

FIs Required to Report “Costs” to DOH

• The DOH may require FIs to report on the “direct care and administrative costs” of providing personal care services, “as accounted for by the [FI].”
• On 90 days’ notice, the DOH can request any “type or amount” of cost information, including supporting documentation.
• The owner or top executive of the FI will be required to certify that all cost information submitted is accurate and correct.

Requiring certification of financial information and supporting documentation by owners or executives of FIs adds further civil and potentially criminal penalties for perjury to investigations and audits of FIs performed by OMIG or other state agencies, including Wage Parity Act audits. Also, as the DOH has recently stated, all fiscal intermediaries must have a Medicaid provider number, separate and apart from any Medicaid provider number they may have for a LHCSA or other line of business. Currently operating fiscal intermediaries should apply for a unique Medicaid provider number immediately.

Conclusion. The Budget continues the state’s efforts, begun with the authorization requirement and the application of the Wage Parity Act to CDPAP, to bring FIs under tighter control. You should work with an attorney versed in CDPAP and the Wage Parity Act to develop compliant marketing materials and structure administrative and benefit costs to comply with the Wage Parity Act and other laws.

FordHarrison LLP advises and counsels 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 at your agency, please contact one of the authors, Stephen Zweig at szweig@fordharrison.com, Phillip Davidoff at pdavidoff@fordharrison.com, or Eric Su, esu@fordharrison.com of the firm’s Homecare Industry Law Group in its New York City office at (212) 453-5900.