Saturday, December 17, 2011

Nonprofits benefit from soaring Medicaid costs in New York

It is always instructive to look at how other states provide services to people with developmental disabilities. At the very least, we may learn what not to do.The New York Times has been investigating the crisis-in-care for people with developmental disabilities in New York and has come across some eye-opening discoveries on how Medicaid money is spent.

This article, Aiding Disabled, Nonprofits Rake in State Money by Russ Buettner, is one of the latest in a series. Community Habilitation is a state home care program that provides Medicaid Home and Community Based Services to people with DD. (Michigan's DD waiver services fall under the Habilitation Supports Waiver. Waiver services can vary from state to state.) According to the article, spending for this program has increased more than 40% over the past three years with much of the benefit going to the nonprofits who provide the services.

In New York, providers determine the services through an individualized plan and are reimbursed on a fee-for-service basis, with the fee negotiated with the state. Over all, providers are reimbursed about $40 per hour to pay for a program with little overhead. Workers, who provide the services in the homes of consumers, are paid only an average of $10 - $15 per hour. Medicare provides similar services to senior citizens, but the median reimbursement rate is $21 per hour.

The nonprofits are the proverbial foxes-guarding-the-hen-house and are apparently using the extra Medicaid dollars to pad executive salaries and build up reserves in their organizations. The state is considering doing away with the fee-for-service reimbursements and revising its incentive system to focus more on quality than quantity of services.

Here is a description of other financial shenanigans by nonprofits in New York.

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