Providers are cautioning that thousands of disabled individuals in New York could end up in hospitals and nursing homes due to Governor Kathy Hochul’s restructuring of the state’s $9 billion home care system, which is facing challenges.

The New York Health Plan Association and other organizations are raising concerns about the tight timeline for the Hochul administration to take action and prevent significant disruptions following a turbulent implementation of the plan to merge payroll services for the Consumer Directed Personal Assistance Program (CDPAP), which serves older adults and individuals in need of home care.

According to a letter dated February 21st addressed to the Department of Health and obtained by The Post, the groups highlighted the potential scenario where hospital or nursing home care may become the only option for many CDPAP recipients if suitable capacity is even available.

“We urge the Department to develop a contingency plan ready to be executed before the end of February to avoid extensive disruption,” the letter added, as the groups blasted the overhaul as way behind schedule as it barrels to an April 1 deadline.

Hochul is transitioning from using hundreds of about 700 firms to one hand-picked company, Public Partnerships LLC, or PPL, to pay people to take care of older relatives.

But the firms getting cut out claim there have been numerous issues at the start of the process, which Hochul has said will save $500 million.

The middlemen who stand to lose business from Hochul’s transition claim people could be forced into nursing homes if they didn’t go through the process of signing up with the new statewide firm for months.

Even if the warnings from the managed care plans are alarmist they still carry significant weight, as the DOH has said the firms would still have to ensure members receive care they are entitled to and home care workers get paid.

The letter, the plans and organizations claim:

• That they’ve fronted “hundreds of millions of dollars” to PPL with no timeline for repayment and “little recourse” to recover advances if the company has financial challenges;
• Data show that only 10% of the roughly 280,000 people who receive care under CDPAP have transitioned, despite there being about six weeks until the April 1 deadline;
• Consumers are facing call center wait times of 30-45 minutes;
• The plans are invited to weekly calls between the DOH and PPL, but they aren’t allowed to speak;
• The plans are getting shoddy data from PPL about who has transitioned from their previous fiscal intermediary;

PPL also recently lost its contract doing the same work in New Jersey where groups had previously complained about the firm.

The DOH has also made its own $40.5 million payment advance to the firm, The Post has learned.

A spokesperson from PPL denies the majority of claims in the letter and said the plan is on track for its April 1 deadline.

The company countered that the plans haven’t fronted the company any money — but noted there’s an arrangement that PPL and the plans must advance funding to pay caregivers through 2026.

PPL also claims 57,000 consumers, or roughly 20%, have transitioned,

The PPL spokesperson didn’t however deny that people receiving care who don’t transition to PPL by the deadline would lose care, but said “there is no change in eligibility for CDPAP for consumers.”

PPL and the state have painted the criticisms by the intermediary companies trying to derail the transition. As New York Focus reported earlier this month, a group repping the middlemen firms spent over $10 million in 2024.

The DOH has allocated at least $2 million of taxpayer money for an ad campaign of its own, The Post has learned.

“New York’s CDPAP reforms will protect consumers and finally put an end to years of runaway Medicaid costs, including the recent alleged $68 million Medicaid fraud scheme and hundreds of millions in taxpayer funds lost to over 600 administrative middlemen,” a spokesman for Hochul wrote in a statement.

Last year, The Post revealed that the powerful health care union 1199SEIU sought agreements in advance to clear the way to unionize the upwards of 300,000 home health aides working under CDPAP.

Doing so could prove a multi-million dollar boon for the union, which critics have alleged was part of an effort to rig the bid for PPL.