ALBANY – Federal investigators are probing Gov. Kathy Hochul’s troubled consolidation of a popular $9 billion Medicaid homecare program, The Post has learned.
The US Department of Justice has interviewed officials from Public Partnerships, LLC, the firm hand-picked by the state Department of Health to handle “middleman” payroll services for the consumer directed personal assistance program, or CDPAP.
“They have been very active over the last couple months in investigating the transition and the various concerns that have been raised related to it,” a source who has had direct contact with investigators said.
“They are devoting significant resources to the investigation with an eye towards potential criminal or civil actions at the conclusion of the investigation,” the source added, noting that the investigators on the case are career professionals from the agency’s consumer protection division.
Hochul’s administration forced the nearly 280,000 people receiving care under CDPAP to re-register from their current payroll services firm or “fiscal intermediary” to PPL. The change was ostensibly made to cut down on the waste, fraud and abuse stemming from under-regulation of the hundreds of firms that used to handle the payroll services for CDPAP home caregivers.
A court stepped in at the last minute to try to alleviate an increasingly unrealistic April 1 deadline set by the DOH for the transition — with PPL massively backlogged and many home care aides in danger of going unpaid. Even with the injunction in place, caregivers are still reporting significant issues getting paid, even prompting legal action.
Earlier this year, the DOJ’s Consumer Affairs Branch chimed in on a federal lawsuit saying it would keep an eye on the situation.
The six-page “statement of interest” expressed concerns that the health department proceeded with the transition despite significant warning signs it would fail, made false statements about impacts on consumers’ eligibility for the Medicaid program, and did not ensure sensitive personal health data was protected during the process.
“The transition process—transferring, within a short period of time, CDPAP services for hundreds of thousands of patients from hundreds of Fiscal Intermediaries to PPL—has been plagued by myriad structural, operational, and logistical defects,” Assistant Director of DOJ’s Consumer Affairs Branch, Patrick Runkle, wrote in the court filing.
The source said the DOJ’s probe follows those same lines, and also could extend to allegations surrounding the impetus of Hochul’s push to overhaul the program, including allegations the $1.05 billion contract PPL was awarded was rigged.
“They’re interested in the full-scope of the transition, the selection and transition,” the source said.
The DOJ didn’t respond to a request for comment.
A Hochul spokesperson called the reforms “much-needed” and said they would stop “the runaway bureaucratic spending” that put the program “on the verge of a fiscal crisis.”
“Removing more than 600 administrative middlemen is a commonsense approach to cutting waste, fraud and abuse,” the spokesperson said in a statement.
“The CDPAP transition is proceeding effectively and the Department of Health will continue working with all stakeholders to ensure that consumers and workers receive the care and support they need,” Hochul’s spokesperson continued.
A PPL spokesperson said the company would continue to “work diligently to support” consumers and workers who wish to continue in the program.
A health department spokesperson said the agency “remains committed to prioritizing continuity of care for consumers and fair treatment of personal assistants,” but did not comment further.
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