Home-Based Care Providers Sue CMS, HHS Over COVID-19 Relief Funds

A group of New York home-based care providers are taking aim at the Department of Health and Human Services (HHS), the New York State Department of Health (NYSDOH) and the U.S. Centers for Medicare & Medicaid Services (CMS) in a lawsuit filed Friday.

Broadly, the case alleges unfair distribution of funds from the American Rescue Plan Act.

The plaintiffs in the case are Safe Haven Home Care Inc., Angel Care Inc., Silver Lining Homecare Agency, Evergreen Homecare Service of NY Inc., Elim Home Care Agency and DHCare Homehealth Inc.

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Under the American Rescue Plan Act, Congress set aside additional funding for Medicaid home- and community-based services as a COVID-19 emergency relief measure. Last year, states began receiving these funds.

In New York, however, the NYSDOH decided to distribute the $361 million among the state’s largest home-based care providers. The decision was approved by CMS. The money is slated to go out on March 31.

Overall, 212 out of 800 companies fall into the category of the state’s largest providers, according to court documents.

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The crux of the lawsuit is that distributing stimulus funds to only the largest providers places smaller providers on shaky ground financially and could place them at risk for closure.

“If these funds are distributed as planned, the largest providers in New York — those already winning the market-share battle — will be given hundreds of millions of dollars to fund recruitment, retention and training for personal care aides, home health aides, and nurses, all but assuring that many smaller providers – which often cater to culturally, racially and ethnically diverse populations – will be put out of business,” the plaintiffs’ attorneys at Potomac Law wrote in the lawsuit.

For context, Brooklyn-based Safe Haven Home Care’s business is centered around serving the Creole, Latinx, Haitian and Caribbean communities. On its end, Angel Care centers Latinx and Southeast Asian communities.

In general, Safe Haven Home Care and Angel Care fall in line with a number of providers that tailor care to fit the needs of their clients’ ethnic or cultural backgrounds.

The lawsuit also states that CMS’ approval of NYSDOH’s payment is in violation of the Medicaid statute because it’s not being made on an “actuarially sound basis.”

Additionally, it contradicts CMS regulations, which require payments to be made “equally and using the same terms of performance, for a class of providers proving the service under the contract,” according to court documents.

A federal judge in Manhattan has agreed to Potomac Law’s request for a hearing, which will take place on March 30.

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