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Clients Lose Access to 24-Hour Home Care Following State Budget Rate Reduction

August 18, 2011

It comes as no surprise – when New York slashes reimbursement rates to providers, our clients have difficulty accessing care.  One recent and dramatic example is the sudden reductions in home health aide services in the New York City area following the April 1, 2011 effective date for the Budget’s “expenditure caps” on payments to Certified Home Health Agencies (CHHAs).  Expenditure caps reduce Medicaid payments to CHHAs based on each agency’s 2009 ratio of total Medicaid claims per patient as compared to the statewide average.  The caps have translated into a significant drop in reimbursement for agencies that are providing significant amount of 24-hour care, since the statewide average in 2009 was low.  After the caps took effect on April 1, some CHHAs in the NYC metropolitan area started refusing to reinstate 24-hour care to patients returning home following a brief hospitalization. 

When advocates contacted Jason Helgerson, Medicaid Director at the New York State Department of Health (NYSDOH), a directive was promptly issued (April 8, 2011) reminding CHHAs that the law prohibits them from reducing services just because Medicaid has cut their reimbursement.  In fact, under Catanzano v. Dowling, CHHAs must follow strict procedures, including providing notice and fair hearing rights prior to reducing or terminating services, as long as the client’s physician disagrees with the reduction.  See Catanzano v. Dowling, 900 F. Supp. 650 (W.D. N.Y. 1995), aff’d, 103 F.3d 223 (2d Cir. 1996).  When advocates asked for a more strongly worded directive, a second directive went out on April 15, 2011.

When CHHA behavior still didn’t change, New York Legal Assistance Group (NYLAG) filed Johnson v. Shah, 11-CV-01956, a class action in the Southern District alleging violations of due process by three CHHA agencies.  The complaint in Johnson alleges compelling facts on behalf of more than ten individual plaintiffs, and names the Commissioners of Health and the Office of Temporary and Disability Assistance, as well as individual CHHA agencies, as defendants.  As of the date of this writing, interim settlements have been reached with two of the defendant CHHAs.  For links to the complaint in Johnson, as well as the NYSDOH directives and other regulatory authority on the procedures CHHAs must follow, visit nyhealthaccess at

If your client has his or her CHHA hours reduced, or if services are not reinstated in the amount provided prior to a hospital stay, make sure your client’s treating physician provides the CHHA with a written statement of his or her professional opinion as to the medically necessary amount of home health aide services.  Request a fair hearing with aid continuing.  If the services are still not reinstated, contact NYLAG (212-613-5046/5069) for possible intervention in the class action. 

Unfortunately, further restrictions in access to care are likely as additional cuts to CHHAs take effect over the next two years.  Upcoming rate reductions for CHHAs include a trend factor reduction; a 2% across the board cut; a new, episodic payment system; and the living wage mandate.  Check nyhealthaccess regularly for news on implementation of changes like these and the advocacy challenges they present.


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