Home Care in Crisis: Part Two. In a Privatized System, Who Fails and Who Flourishes?
Ten years ago, New York State turned over publicly financed home care for elderly and disabled New Yorkers to managed long-term care (MLTC) plans. Since then, for-profit plans have come to dominate the system, while the role of many non-profit providers that were originally part of it has shriveled.
Let’s look at two examples of how this has played out – and at the implications for patients and home care aides.
Example One: In 2000, the State Department of Health (DoH) hired Independence Care Services (ICS), a non-profit agency, to provide care coordination, home health aides, home-based nursing, and related services to severely disabled adults (such as those with spinal cord injuries or multiple sclerosis) on Medicaid. ICS received a set monthly amount (a “capitation”) expected to cover all costs. While it struggled to stretch the funding far enough, ICS was very successful, lauded by the industry and celebrated by its clients for exquisite attention to their complex medical, social, and psychological needs.
When the State shifted to Medicaid MLTCs, ICS was invited to participate. It expanded its rolls to include frail elderly people who needed personal care to accomplish everyday tasks including toileting, bathing, cooking, and housekeeping. On average, caring for these clients costs significantly less than home-based care for the severely disabled.
Unfortunately, however, ICS found that continuing to meet the needs of disabled clients clashed with the State’s objective of reducing Medicaid spending through the MLTC program. Initially the State was willing to risk-adjust payment to accommodate ICS’s disabled client expenses. However, it balked at paying for 24-hour care for all the clients who could/should not be left alone.
Even when the State assumes there will be 24/7 home care coverage by a single worker, it never fully pays for it. Instead, workers are paid for 13 hours of a 24-hour shift, based on the fantastical assumption that a worker slept for eight hours and had three-hour long meal breaks - all while remaining in the client’s home. (Alternatively, clients needing 24-hour care are helped to bed and locked in for up to 12 hours until the worker returns.)
Compounding this problem, ICS’s capitation also assumed that only a very small proportion of clients needed round-the-clock coverage. In fact, fully 30 percent did. As a result, ICS lost money every month. The losses were unstainable. After several years of fruitless negotiation with DoH, ICS transitioned clients to other agencies and shut its MLTC in 2019.
Here’s Example Two: The profit-driven Centers Plan for Health Living. Owner and CEO Kenneth Rozenberg tells how it blasted into the MLTC arena:
“I was working as an administrator for a chain of nursing homes for five years. The owner got sick and [in 1997] I bought a branch with 77 beds from him in an old building. Later he sold me another branch and slowly I grew - at the start to three centers and then to five. Today we have 49 centers. Then we grew laterally. After all, people come to a nursing home by ambulance, so we bought a license to operate one ambulance, and today we have 300. After that we understood that people released to their homes need the appropriate services and equipment, so we bought companies in the sector."
In addition, his company bought three licensed home care agencies, a medical lab, a home dialysis company, and opened three urgent care centers and an assisted living complex. (In 2021, Rozenberg, whose net worth is estimated at $500 million to $1 billion, also financed his 27-year-old son’s purchase of El Al Israel Airlines.)
There have also been other, rockier steps on Rosenberg’s path to a long-term care empire:
2012. The new owners of the former St. Elizabeth Ann's Health Care & Rehabilitation Center on Staten Island laid off 55 of the facility's 60 registered nurses.
2018. Centers Plan for Healthy Living paid $1.65 million to settle Federal civil fraud allegations that it billed the Medicaid program for services it did not provide to 864 named Medicaid beneficiaries.
2020. Two senior citizens with dementia were found dead after they wandered away from their homes in New York City. Both were Center Plan clients. Neither had 24-hour care.
2021. Mallette Cooper, a licensed practical nurse of 30 years, tells an Albany television reporter that management at her Center Plan-owned long-term care facility refuses to buy washcloths and towels for residents. Her message to the owner: "I want you to see our patient slumped in bed and crying and wet and soiled. I want you to walk through my facility and not just look at things that may make you more money one day.”
Source: Medicaid Managed Care Enrollment Reports
Despite its spotty record, Centers Plan’s MLTC has booked an amazing 3500 percent enrollment growth since 2014. It is the State’s largest MLTC contractor – no small feat in a system increasingly dominated by large national for-profit companies including Integra (Anthem), Fidelis (Centene), Senior Whole Health (Molina), Aetna Better Heath, and UnitedHealth Care MLTC. As of January 1st, Center Plan’s MLTC was receiving capitation payments of $2.4 billion annually. Which licensed home care agencies does it buys its services from? That is one of the many MLTC plan issues not reported by the State DoH.
That kind of regulatory blind spot raises important questions about the future of home care in New York State. DoH has testified that it cannot guarantee that minimum wage mandates have been honored by all its contractors or that money to raise desperately low health aide wages through the Fair Pay Act recently voted by both houses of the State Legislature will actually find its way into paychecks.
That must change. Either the State must regulate the MLTCs as the insurance companies they are, relying on DoH and the Departments of Financial Services and Labor and the Attorney General to ensure that public money is spent appropriately, and profiteering minimized. Or it should eliminate the middlemen and deal directly with licensed agencies employing home care workers.
No evidence shows any value added for clients from the State’s contracting-out program. The beneficiaries are the companies that receive the money and the politicians who authorize it. The former can amass enough to buy an airline. The latter escape responsibility for care promised to 208,000 disabled and elderly New Yorkers and for the use of billions of taxpayer dollars.