UPDATE: On June 17, 2024, the NY DOH issued a Request for Proposals seeking competitive proposals from qualified bidders to become the one Fiscal Intermediary to provide SFI services.  

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On April 20, 2024, Governor Hochul signed the New York State Budget for fiscal year 2024-2025 into law.  The Budget includes legislation that significantly changes the state’s Consumer Directed Personal Assistance Program (CDPA Program) and leaves open whether most of the present Fiscal Intermediaries (FIs) will be part of the program once the new framework is instituted. The CDPA Program, funded through Medicaid, allows chronically ill and/or disabled individuals (Consumers) to engage and employ personal assistants (from recruitment through termination) to provide home health services for them, while a FI performs wage and benefit processing.

The Budget states that as of April 1, 2025, there will be a single Statewide Fiscal Intermediary (SFI), defined as “an entity that provides fiscal intermediary services and has a contract for providing such services” with the New York State Department of Health (NY DOH) that “is selected through the procurement process.” This is a substantial change to the CDPA Program, considering that according to the NY DOH’s website, 535 FIs operated in New York as of November 2020 (now believed to be 600-700).

Regarding the selection of the SFI, the legislation sets forth minimum criteria that must be met. These include requirements that the eligible contractor:

1. “is capable of performing statewide FI services with demonstrated cultural and language competencies specific to the population of consumers and those of the available workforce”;
2. “has experience serving individuals with disabilities”; and 
3. has been “providing services as a fiscal intermediary on a statewide basis with at least one other state” since April 1, 2024 or earlier.

In addition, the NY DOH will have discretion to include other criteria, which it will post on its website, along with “a description of the proposed SFI services to be provided pursuant to a contract,” and how prospective contractors may apply.  After reviewing all offers, the NY DOH will select a contractor that “meets the criteria for selection and offers the best value for providing the services required.” 

The responsibilities of the SFI will include all of the tasks that FIs have traditionally been responsible for, as outlined in Section 365-f (4-a)(a)(ii) of the Social Services Law, including but not limited to, wage and benefit processing for Consumer Directed Personal Assistants.

Under the new legislation, the SFI will subcontract with several entities to facilitate the delivery of FI services. One subcontractor must be a service center for independent living that has been providing FI services since January 1, 2024 or earlier. In addition, the SFI must subcontract with “at least one entity” per Managed Care region (as defined by the NY DOH) that “has a proven record of delivering services to individuals with disabilities and the senior population, and has been providing FI services since” January 1, 2012. “Rate setting region” means a Managed Care Region, as defined by the NY DOH.

Moreover, each subcontractor must be able to “provide any delegated FI services with cultural and linguistic competency specific to the population of consumers and those of the available workforce.” Delegated FI services are defined as any of the FI responsibilities specified in Section 365-f (4-a)(a)(ii) of the Social Services Law that the SFI includes in its respective contracts with subcontracting entities.  The specific FI services that the SFI chooses to delegate to its subcontractors must be designed to meet the needs of Consumers, which may include assisting Consumers with navigation of the CDPA Program by “providing individual Consumer assistance and support as needed, Consumer peer support, and education and training to Consumers on their duties under the” CDPA Program.  Subcontractors will also be required to register with the NY DOH, in accordance with the NY DOH’s future regulations.

The law does not set forth a maximum number of entities with which the SFI can subcontract. However, in selecting its subcontractors, the SFI must consider “demonstrated compliance with all applicable federal and state laws and regulations, including but not limited to, marketing and labor practices, cost reporting, and electronic visit verification requirements.” 

The SFI will be responsible for payment to subcontractors for FI services provided through the subcontracting process, and certification by the NY DOH will not be required if the payments are reasonably related to the costs of efficient delivery of the services.

As expected, based on the governor’s original Proposed Executive Budget and amendments which we discussed in detail elsewhere, legislation in the Budget implies that, contrary to the current CDPA Program requirements, the NY DOH may issue training requirements and/or minimum criteria for Personal Assistants. Specifically, the law now expressly states that the NY DOH has the authority to promulgate regulations that mandate “minimum safety, and health and immunization criteria and training requirements for Personal Assistants.”

Conclusion

After several months of extensive negotiations, the Budget brought surprising and unexpected changes to the CDPA Program, including the selection of a single SFI for the entire state of New York. This may cause hundreds of current FIs to cease their participation in the CDPA Program, apparently leaving that decision up to the sole SFI, selected by the NY DOH through a “procurement process.”  The role of current FIs, who may be selected as “subcontractors” by the SFI, is unknown at this time.

Notably, several of the original proposed changes that Governor Hochul had included in her Executive Budget and amendments, including the elimination of wage parity benefits for Personal Assistants, limitations on daily and weekly work hours for Personal Assistants, the removal of Designated Representatives for Consumers, and prohibitions directed at alleged conflicts of interest between FIs and Licensed Home Care Services Agencies, were not passed. Still, beginning on April 1, 2025, all entities other than the SFI and its subcontractors will be prohibited from providing FI services.

Entities currently providing FI services should start reviewing the new Budget laws and plan for potential changes to their roles as we await further clarification on how the amendments will be implemented.