On Friday a case was filed in the Southern District of New York by a group of home health care companies against the Department of Health and Human Services (HHS) and its New York equivalent, the Department of Health (NYDOH). The case alleges inequitable and arbitrary disbursement of funds from the American Rescue Act.
The plaintiffs are Safe Haven Home Care Inc., Evergreen Homecare Service of NY Inc., Elim Home Care Agency LLC, DHCare Homehealth Inc., Silver Lining Homecare Agency, and Angel Care Inc.
Due to the COVID-19 pandemic, nursing homes and home health agencies faced unprecedented needs for their services, unexpected costs for providing these services in the form of extra sanitization and health protocols, as well as staffing interruptions. As a part of the American Rescue Act, extra funding was provided for Medicaid Home and Community-Based Services (HCBS) during the COVID-19 emergency, the complaint explained. This funding must be matched by state funds and it is the state department of health, who is responsible for creating a plan for the disbursement of these funds. The plan from the state is then certified and approved by HHS.
NYDOH is seeking approval to disburse $361 million to be distributed among LHCSAs providing Medicaid services in New York. However, instead of disbursing the money pro rata amongst all of the eligible providers, which the complaint approximates at 800, NYDOH proposes to disburse the funds to the top 212 providers by size, the complaint alleged. The plaintiffs argue this is particularly unfair as the larger institutions already have the benefit of greater market share and ease in obtaining supplies and hiring. The plaintiffs also argue that this disbursement method is arbitrary, capricious, and runs contrary to the clear intent of the act.
The plaintiff is suing for declaratory judgment that the disbursement method violates the Administrative Procedures Act and seeks injunctive relief prohibiting disbursement until a more equitable method is chosen. Plaintiffs are represented by the Potomac Law Group PLLC.
