ALBANY – New York state’s powerful 1199 SEIU union is already profiting from Gov. Kathy Hochul’s disastrous and allegedly fraudulent overhaul of the state’s $11 billion home health Medicaid program, the Post reported.
Politically influential labor groups have begun moves to unionize hundreds of thousands of home health aides hired through taxpayer-funded programs that have been accused of fraud, and are likely to receive huge dues.
1199 officials who supported the overhaul have been meeting weekly with Public Partnership LLC, the company that won the contract to manage the large consumer personal assistance program as part of Mr. Hochul's personnel changes.
The Hochul administration has been dogged for months by allegations that the bidding process for a roughly $1 billion contract to oversee CDPAP's payroll was rigged in PPL's favor.
“If 1199 SEIU unionizes the CDPAP program, taxpayers, consumers and providers will all lose,” Ken Girardin, a fellow at the Manhattan Institute, told the Post.
“There is no room for unionization between consumers and the people they employ and train. This is nothing more than an excuse to skim cash and feed the political machine of 1199 SEIU,” Girardin said.
“The White House needs to intervene because this would be one of the worst abuses of taxpayers in the history of the Medicaid system.”
1199 representatives did not rule out efforts to unionize the plan's more than 200,000 aides. Officials say 1199 could gather enough interested members to hold formal elections to form a union starting in 2026.
1199 SEIU spokeswoman Rose Ryan said in a statement: “We called on PPL, like other companies bidding on a single financial brokerage contract, to avoid wasting precious public funds by pressuring workers and to allow workers to make their own decisions about unionization through a democratic process.”
“1199 has always been a key stakeholder in CDPAP and we will continue to work closely with them during the transition period.”
The move comes amid mounting evidence that the Hochul administration lobbied to steer the contract to PPL – this time in emails unearthed by government watchdog group Empire Public Policy Center.
The communication appears to confirm that Hochul's office and state Department of Health officials met with PPL officials on April 4, weeks before Albany lawmakers signed the contract with the company.
The governor last year pushed for an overhaul of CDPAP, saying he wanted to cut rampant waste, fraud and abuse in the program, which has ballooned to $11 billion from $3 billion in 2018.
The shakeup consolidated under one umbrella hundreds of intermediaries that had served as “financial intermediaries” between Medicaid, which funds the program, and the home health aides employed by the program.
But a letter obtained by the Post shows that the companies handpicked by Hochul's Ministry of Health for the initiative are preparing to shoulder even more costs to the state next year.
The Health Plans Association, a group representing insurance companies that prepay salaries to PPL before receiving reimbursement from the state, accused the company of “drastically increasing” premiums without substantial DOH involvement and “without detailed justification,” according to the letter.
“If PPL insists on a flat, non-negotiable fee, it will jeopardize service to its members and will undoubtedly negate the very financial savings the state had planned for,” HPA wrote.
A PPL spokesperson claimed the increase was due to a statutory 55 cent increase in the minimum wage for home care workers that takes effect in 2026.
“PPL does not retain anything from this increase and all additional dollars go directly to workers' salaries. This adjustment does not violate PPL's contract,” a company representative said.
Regarding the April 4 meeting with Hochul management staff, a PPL spokesperson declined to provide details of the meeting, but said the contract followed a legitimate competitive bidding process.
A spokesperson for the governor's office declined to discuss PPL's interest rate increase and did not provide details of the meeting.
Many state legislators are dissatisfied with the overhaul they approved as part of the state budget last year and have expressed serious concerns about allegations of bid rigging.
State Sen. Robert Jackson (D-Manhattan) said, “Federal budget cuts threaten to undermine the foundations of Medicaid, so all public dollars must be protected and directed to people, not profits.”
Lt. Gov. Antonio Delgado, who is estranged from Jackson and Hochul, expressed his outrage over the overhaul Wednesday at a news conference hosted by the advocacy group New York Compassionate Majority at the state Capitol.
Despite the turmoil, Hochul continues to claim the review is a victory, telling reporters last week that the budget office expects to save $1 billion a year, half of which will come from the state and half from the federal government.
“It made sense. It was a war, a big battle, and those are the issues I want to be proactive about,” Hochul said.
Some financial experts question whether the state could actually save overall costs by moving to one provider, given that about 80,000 consumers have left CDPAP for other home care programs.
“This shift has led tens of thousands of consumers to switch to agency care, which is a more expensive form of care,” Michael Kinnucan, director of health policy at the Fiscal Policy Institute, told the Post.
“Some of the savings are illusions.”
