Executive Summary. On December 18, 2019 New York State’s Department of Health (DOH) issued a Request for Offers (RFO) from those who wish to continue or first become Fiscal Intermediaries (FIs) under the State’s Consumer Directed Personal Assistance Program (CDPAP). Every offer responding to this RFO must sign a “Joint Employment Attestation” expressly acknowledging the offeror’s status as a joint employer for a consumer-directed personal assistants (PAs). This mandate shifts substantial risk of loss and liability to an FI and raises many questions. Any written questions concerning the RFO must be submitted to DOH by January 3, 2019. Our suggested questions, which you are free to pose to DOH are listed in the “Policy Questions DOH Should be Asked,” section below. In the meantime, every existing FI should perform a self-audit of all the potential liabilities it is being asked to assume. Based on our firm’s 25 years’ experience in representing FIs, we can assist you, if desired.
Background of CDPAP in New York State
Over 35 years ago, mentally able but physically disabled Medicaid recipients wanted a program that was dramatically different than the licensed home care agency (LHCSA). A LHCSA differs dramatically from a FI under CDPAP because a LHCSA accepts responsibility for a patient's care and safety and directs and controls the manner and means by which the LHCSA’s workers provide services to Medicaid recipients in their own homes.
CDPAP was born as an alternative to a LHCSA. It allowed Medicaid recipients to live independently on their own, controlling not only their own plans of care, but also when, where, how and from whom they receive care. Historically NYS’s CDPAP has followed the employer agent FI model, where the FI is essentially a payroll and benefit administration company performing services on behalf of the Medicaid recipient or consumer.
The NYS Social Services Law establishing CDPAP and its implementing regulations do not expressly provide that FIs are required to be joint employers of a consumer’s employees, known as PAs. Rather, they expressly state that the FI’s services are performed "on behalf of the consumer to facilitate his or her role as the employer.” Moreover, an FI cannot become involved in a consumer’s care or oversee the PAs who provide the care, or have any input into who the consumer hires as a PA, how the consumer schedules the PA, what care or tasks of daily living the PA is requested to perform for the PA, or how, where or when the consumer receives these services.
These same constraints on an FI’s services are repeated in the RFO, which expressly states that FIs:
- are not responsible for, and fiscal intermediary services shall not include fulfillment of the responsibilities of the consumer which include: a) Managing their own plan of care including recruiting and hiring PAs; b) training, scheduling and supervising PAs including arranging and substitute coverage when a PA is temporarily unavailable for any reason; c) Assuring PAs competently and safely perform the required services; d) Timely approving and attesting to the accuracy of PA time records and transmitting such information to the FI according to the FI’s procedures; e) Timely notifying the FI of changes in employment status of any PA; f) Timely distributing PAs employment checks, if necessary; and g) Terminating PAs. (emphasis in original)
Policy Questions DOH Should be Asked
Despite the near total lack of control the FI has over a consumer and its employment of its PAs, without any amendment of the aforementioned statutory language and regulatory constraints, DOH has decided that it will require FIs submitting an RFO to assume joint employment status and assume all risk of potential loss arising from such joint employment status. How can FIs be expected to accept these risks, which will make them, not the consumer, the primary target of all types of claims and lawsuits?
- Can an FI, without any possible means of control, be held liable for hours worked beyond a consumer's authorized hours, such as "informal support" hours, "on call" and "engaged to wait" hours, "shopping" hours before or after work, job-related training hours, and hours driving a consumer to a specific destination, which may not even be recorded, but can be claimed by a PA, subjecting the FI to the payment of unauthorized hours worked, an additional 100% of that amount as liquidated damages under New York Labor Law, interest and other penalties? (Note: An FI does not receive the consumer's plan of care and is not privy to the home health services the consumer needs, requests or are provided at their direction – only the consumer knows.)
- Can an FI be allowed to control a consumer’s scheduling of its personal assistants’ hours, where such scheduling requires the personal assistant to work significant overtime or “spread” or “split” shifts, which can substantially add to the cost of payrolling a PA? (Note: If a per person/per month reimbursement scheme is eventually imposed, it becomes even more critical for an FI to understand whether it can cost-effectively service a consumer who schedules its PAs for significant overtime or “spread” or “split” shifts.)
- Can an FI be held liable and subject to penalty under federal and NYS laws that apply to employers with a certain minimum number of employees, such as the Affordable Care Act's penalties for not providing workers with acceptable health insurance under that Act? (Note: Under ERISA, PAs can be considered eligible participants in any self-funded health care plan and in any retirement or 401(k) plan of the FI that covers its management or staff employees, and may also be considered members of a “controlled group” for retirement plan purposes with a company related to the FI.)
- Can an FI be held liable when a consumer's PA injures, intentionally or otherwise, the consumer or a member of the consumer's family, guests, or even bystanders at whatever location the PA is performing services for the consumer? Or when the PA is harassed by anyone based on the protected classes covered by anti-discrimination laws?? (Note: The FI does not know whether the PA’s workplace, i.e.,the consumer's home, the consumer's or worker's car, or elsewhere, is safe or secure for the consumer or the worker – only the consumer knows. Nor can the FI take meaningful steps to ensure such safe and secure conditions. What is more, workplace harassment, discrimination and retaliation law was changed in 2019 to make it far easier for any worker to make out and file a claim.)
- Can an FI, at other than at prohibitive cost, obtain comprehensive property and casualty and other business insurances to cover the risks of injury to consumers and others present in whatever locations the PA is providing services to the consumer or will an insurer deny coverage of a claim once it determines that the FI was barred from direction and control over the PA or the hiring or firing of the PA, the location at which services were provided, or any way of protecting against the risks to the consumer, a member of the consumer’s family, guests or bystanders? (Note: Unlike a Professional Employer Organization (PEO), a FI has no ability to transfer these risks to the primary employer, in this case, the consumer.)
- Can an FI be subject to a union’s claim at the National Labor Relations Board that the PAs should be added to an existing bargaining unit of home care employees, or a union’s request that a “neutrality agreement” be signed allowing the union to organize the PAs without opposition, or an organizing drive by any union that may seek to become the exclusive bargaining representative of the PAs? (Note: A union collective bargaining agreement may require the FI to adhere to set wage rates and benefits for PAs, with no flexibility, and commit to fixed contribution rates to the union’s labor-management trust funds.)
Conclusion. DOH is requiring that any existing or new FI seeking to participate in the State’s CDPAP expressly acknowledge it will be a joint employer with its consumers, but it has neither addressed or acknowledged the serious attendant risks this raises for FIs nor reduced the restrictions on FIs to allow them to manage these risks and the liability they present. The questions we raise in this Legal Alert deserve to be answered by DOH before the date FIs must apply for this program.