ALBANY – Union Profits from New York’s Home Health Medicaid Overhaul

New York’s influential 1199 SEIU union appears to be reaping benefits from Governor Kathy Hochul’s overhaul of the state’s $11 billion home health Medicaid program, which has come under fire for alleged fraud, according to reports.

Labor organizations are beginning initiatives to unionize hundreds of thousands of home health aides employed through taxpayer-supported programs reportedly tangled in fraud. This move could potentially generate significant union dues.

Officials from 1199, who endorsed the program changes, have been holding weekly meetings with Public Partnership LLC, the firm awarded the contract to oversee the large consumer personal assistance program as part of Hochul’s administrative shake-up.

The Hochul administration has been facing scrutiny for months over accusations that the bidding process for a nearly $1 billion contract to manage CDPAP’s payroll was unfairly tilted toward PPL.

Ken Girardin, a fellow at the Manhattan Institute, expressed concern, stating, “If 1199 SEIU goes ahead and unionizes the CDPAP program, it’s taxpayers, consumers, and providers who will ultimately suffer.”

He added, “There’s really no reason for unionization between consumers and the aides they hire and train. This feels like an avenue for just pocketing funds while fueling 1199’s political agenda.”

There are indications that 1199 representatives might pursue unionization for over 200,000 aides involved in the plan. They suggest they could gather enough interested workers to hold formal union elections as soon as 2026.

Rose Ryan, a spokesperson for 1199 SEIU, remarked, “We urged PPL, like other organizations bidding for a financial brokerage contract, to avoid squandering public dollars by pressuring employees, enabling them to decide on unionization through democratic means.”

PPL initially denied having discussions with Hochul’s team but later recanted that claim following inquiries during a state Senate hearing in September.

“We plan to maintain a collaborative relationship with 1199 as we navigate this transition,” the spokesperson added.

This development comes amid mounting signs that Hochul’s administration allegedly worked to secure the contract for PPL, with emails obtained by a government watchdog group revealing communications between Hochul’s office and PPL officials prior to the contract signing.

Hochul had advocated for reform of CDPAP, aiming to address rampant waste, fraud, and abuse, as expenditures ballooned from $3 billion in 2018 to $11 billion.

The reorganization centralized numerous intermediaries that had previously acted as “financial intermediaries” managing Medicaid funds for home health aides.

However, a letter obtained indicates that companies selected by Hochul’s Health Department are anticipating increased costs for the state moving forward.

The Health Plans Association, representing insurers that prepay salaries to PPL and then seek reimbursement from the state, accused the company of “significantly elevating” premiums without sufficient involvement from the Department of Health or clear justification.

According to the association, “If PPL maintains a flat, non-negotiable fee, it’ll negatively impact service for its members and potentially derail the expected financial savings for the state.”

A representative from PPL attributed the rise in costs to a statutory wage increase for home care workers that will take effect in 2026, stating, “PPL doesn’t retain any of this increase; all of it goes directly to worker salaries. This change aligns with our contract.”

As for the April 4 meeting with Hochul’s staff, the PPL spokesperson did not offer any specifics but asserted that the contract was awarded through a legitimate competitive process.

A representative from the governor’s office declined to comment on the increase in interest rates or regarding details of that meeting.

Many legislators expressed discontent with the overhaul they approved last year, raising serious allegations of bid manipulation.

State Senator Robert Jackson criticized the situation, stating, “Federal budget cuts could undermine Medicaid’s foundation, so all public funds must be safeguarded and funneled to people rather than profits.”

Lieutenant Governor Antonio Delgado voiced his frustration over the overhaul at a recent conference, further fueled by advocacy from the New York Compassionate Majority.

Despite ongoing issues, Hochul maintains that the changes will yield significant savings, asserting last week that the state budget office anticipates a $1 billion annual saving split between state and federal contributions.

“This made sense. It was quite a battle, and I want to be proactive on these issues,” Hochul stated.

However, some financial experts are skeptical about whether shifting to a single provider can truly lead to overall cost savings, especially since approximately 80,000 consumers have opted out of CDPAP for alternate care options, typically more expensive ones.

Michael Kinnucan, the health policy director at the Fiscal Policy Institute, remarked, “A lot of these savings might just be illusions.”