By Dan Clark
Albany Times Union

ALBANY — A home care company that was passed over for a contract to manage a multibillion-dollar Medicaid program in New York claims in a lawsuit filed this week that the state rigged the bidding process in favor of the winner.

That winner, Public Partnerships, LLC, is a Georgia-based company the state selected in September to take over the fiscal side of a popular, but costly, Medicaid program.

The Consumer Directed Personal Assistance Program, or CDPAP, allows people who need help with daily tasks to choose their own aide, including someone they know, rather than having one assigned to them.

The lawsuit was filed by Freedom Care LLC, a home care company, against the state Department of Health and Public Partnerships, claiming they colluded to steer the contract away from other applicants.

“(The Health Department) structured the process with an apparent eye toward PPL, imposing eligibility requirements that eliminated almost all of (Public Partnership’s) potential competitors — though, importantly, Freedom Care was able to jump through every hoop DOH erected,” the lawsuit said.

The company is represented by high-powered law firm Gibson Dunn in the litigation. A spokesman for Gov. Kathy Hochul said the civil complaint is “full of false statements.”

“But the facts here are simple. The qualifying language was approved by the state Legislature and the (request for proposal) was put out for public bid,” said Sam Spokony, the governor’s spokesman. ”At the end of that process, (Public Partnerships) scored the highest and was selected."

The transition is scheduled to begin in January and be completed by April, Spokony said.

The conflict began in April, when Hochul and the Legislature decided to change how the fiscal side of the home care program would be managed.

That’s currently done through hundreds of so-called fiscal intermediaries. Those are businesses that act as the middlemen between Medicaid and aides who participate in the program. The companies then take a cut of those funds as payment.

But state spending on the program has ballooned from $2.5 billion to $9 billion over the last five years, with that number expected to grow as enrollment climbs, state budget officials have said.

That led Hochul and lawmakers to decide as part of this year’s state budget to replace the current roster of fiscal intermediaries with a single, statewide administrator. That will reduce the program’s cost, they argued, and reduce fraud.

“I want to make sure that the money does not go to them — it goes to the people who need the services,” Hochul said in October. “I want to make sure the program is financially viable.”

That was after the state Department of Health had announced Public Partnerships as the winner of the contract.

The agency issued a request for proposals to become the state’s new fiscal intermediary for the program in June. Public Partnerships was one of 136 companies that applied for the contract.

Freedom Care claims in its lawsuit that the criteria sought by the state in that request placed restrictions on in-state entities that didn’t apply to out-of-state applicants, like Public Partnerships.

“Specifically, (the Health Department) introduced a conflicts provision into the (request for proposals) that prohibits the statewide fiscal intermediary from being owned or controlled by a licensed home care services agency in New York state but did not impose this restriction on entities based in other states,” the lawsuit said.

The agency also refused to disclose how certain parts of each proposal for the contract would be scored, the company asserted.

“The effect of (the Health Department’s) evasion was to disadvantage (Public Partnership’s) competitors,” the lawsuit said.

The lawsuit also claimed the state unlawfully coordinated with Public Partnerships before they were announced as the winner of the contract. That’s because, when it was announced in a news release, the state and Public Partnerships had already selected companies to subcontract with.

“That alone should be enough to annul the award,” attorneys wrote in the lawsuit.

Opponents of how the state wants to transition the program have spent the last six months advocating for Hochul and the Legislature to reverse it and find other ways to reduce Medicaid costs.

That has moved the needle but not by much. Some lawmakers are sympathetic to their cause but there hasn’t been a larger effort in the Legislature to stop the scheduled change.

Bryan O’Malley from the Alliance to Protect Home Care said they support the lawsuit, which seeks to annul the contract awarded to Public Partnerships. O’Malley said it was a “backroom deal.”

“There is no other way to explain how a company with a track record as bad as (Public Partnership’s) would be allowed to manage the home care of our elderly and disabled,” he said. “The Legislature and governor still have time to fix this before New York becomes another PPL disaster,” he said.

Public Partnerships manages several programs in other states, as well as New York, but has been met with criticism over its management of some programs. The company did not respond to a request for comment on the lawsuit Tuesday.

If lawmakers want to work with Hochul to adjust or stop the transition, that would happen during the legislative session. That’s scheduled to begin in January.