Hochul bows to health-worker union’s $12B senior-care power play that could bust NY’s budget

Gov. Hochul’s overhaul of the Consumer Directed Personal Assistance Program reached a milestone last week when she named a Georgia-based company as the winning bidder to be the program’s statewide “fiscal intermediary” — and to replace hundreds of smaller companies that currently handle those duties.

The announcement drew a chorus of criticism from consumers, providers and disability rights advocates who contend the shift will jeopardize vital services for clients of CDPAP.

Yet Hochul’s press release featured a laudatory quote from George Gresham, president of the health-care union 1199 SEIU — a reminder that one of Albany’s most powerful interest groups is squarely behind the governor’s controversial plan.

The union’s motive is no mystery: Putting a single company in charge of the $12 billion program would pave the way for 1199 to unionize hundreds of thousands of CDPAP caregivers, vastly expanding both its membership and its dues revenue.

Hochul’s thinking is harder to parse.

On one hand, she and her budget advisors have raised an alarm about the CDPAP’s explosive growth — and framed downsizing the bureaucracy as a strategy for restraining costs.

On the other hand, she is inviting a unionization drive that would create pressure for higher spending.

If Hochul continues on this contradictory course, CDPAP could end up as bloated and dysfunctional as ever.

CDPAP is an alternative to traditional home care for the elderly and disabled: Instead of relying on workers employed by home-care agencies, CDPAP recipients hire, train and manage caregivers of their own choosing — who can be family members or friends — with Medicaid paying their wages.

The previously little-known program has mushroomed over the past decade, with enrollment spiking from 12,000 to more than 250,000 from 2015 to 2023, and Medicaid outlays soaring above $12 billion per year.

CDPAP is one of the primary reasons that New York has higher rates of spending on Medicaid personal care — and higher rates of home health employment — than any other state.

One factor behind these trends is the proliferation of hundreds of fiscal intermediaries, companies that handle CDPAP payroll processing and other administrative duties in return for fees from the state: Their widespread advertising is believed to have driven much of the program’s enrollment growth.

Officials had previously tried to reduce the number of these companies, but hit roadblocks in the courts and in the Legislature.

The idea of taking consolidation even further — and putting the program under just one fiscal intermediary — emerged late in this year’s budget process, when negotiations among the governor and legislative leaders had dragged past the April 1 start of the fiscal year. 

Behind the scenes, 1199 became one of the proposal’s biggest champions and helped secure its passage over widespread opposition among rank-and-file lawmakers.

The union played such a central role that one disability-rights activist credited 1199 officials — as opposed to the governor or elected legislators — with negotiating changes that became part of the final budget.

Later, when the Health Department issued its request for proposals, it specified that would-be contractors would have to declare themselves “joint employers” of CDPAP caregivers, a key step for making unionization possible.

Traditionally, the state has defined the CDPAP recipient, not the fiscal intermediary, as the caregiver’s employer.

When bidders asked for clarification of the “joint employer” requirement — and whether it would lead to collective bargaining — the department was evasive: “Unionization of personal assistants is not a requirement of the [request for proposals] and the Department will not opine on the topic,” it said.

Later, The Post reported that the union had been pressing likely bidders to sign agreements committing to remain neutral about unionization by 1199, to provide it with contact information for all caregivers and eventually to join it in lobbying for higher wages for CDPAP workers.

The consolidation of CDPAP faces widespread criticism from advocates, multiple lawsuits from providers and significant opposition in the Legislature. A bill that would repeal the plan has been introduced by Senate Health Chairman Gustavo Rivera of The Bronx, normally an ally of 1199.

There are also logistical challenges to be dealt with before April 1, 2025, after which existing fiscal intermediaries are officially barred from doing business with the state.

Before that date, the winning bidder, Public Partnerships LLC, must finalize its contract with the Health Department and negotiate subcontracts with more than 30 existing fiscal intermediaries.

Then it must re-enroll the program’s 250,000 recipients and their hundreds of thousands of caregivers, whose records are currently spread across hundreds of companies — a transition that has led to disruptions and litigation in other states.

The transition process includes no formal role for 1199, but there is little doubt the union will remain closely involved.

In a tweet hailing the CDPAP announcement, Manhattan state Sen. Brad Hoylman-Sigal ended with this thought: “Looking forward to working with @1199SEIU to ensure this plan is successful.”

Bill Hammond is the senior fellow for health policy at the Empire Center. Adapted from the Empire Center blog.