Federal Judge Grants Expedited Hearing in Lawsuit Challenging New York State’s Decision to Give Funds to Only the Largest Home Health Care Agencies

A Federal Judge in Manhattan granted Potomac Law’s request for an expedited briefing schedule and a hearing on March 30, in a new lawsuit filed by the firm on Friday evening.

Hundreds of Licensed Home Care Services Agencies (“LHCSAs”) providing vital services to Medicaid recipients in New York City, and throughout the State, are at risk of going out of business as the New York State Department of Health (“NYSDOH”) plans to target COVID-19 stimulus funds to the largest agencies only, with $361 million being slated to go out on March 31.

The NYSDOH decided to give crucial COVID-19 stimulus funds made available by Congress under the American Rescue Plan Act of 2021 only to the largest one-third of LHCSAs in New York State, leaving hundreds of smaller agencies out in the cold, unable to rebound from the devastating impacts of the pandemic, or to remain competitive with their larger counterparts.

Potomac Law represents a group of the LHCSAs left out of funding and filed a lawsuit on Friday evening in the United States District Court for the Southern District of New York in Manhattan seeking emergency relief to stop the payments from going out as planned.

“If these funds are distributed as planned, the largest providers in New York . . . 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 (who often cater to culturally, racially, and ethnically diverse populations) will be put out of business,” according to the lawsuit filed by Derek Adams, Neil Koslowe, and Susan Hendrix of Potomac Law.

The LHCSAs Potomac Law represents include Safe Haven Home Care, based in Brooklyn, and serving all five boroughs of New York City. “Safe Haven uniquely caters to the Creole and Hispanic community that includes persons from Haiti or of Haitian descent, and persons of Caribbean or Hispanic descent” said its founder, Rouandy Pascal, in a declaration made as part of Friday’s lawsuit. Pascal, a registered nurse who has spent 30 years in home health care, explained that, even though her agency had last received a 100 percent deficiency free-survey from the NYSDOH, it was not receiving any share of the $361 million going out in March, money instead going to larger agencies that “will recruit Safe Haven’s employees and [it] will lose its direct care workers to those LHCSAs that received the additional funding and can offer better compensation and benefits packages.” She added that this will “negatively impact the patients with whom Safe Haven has built a relationship of trust and quality care” who can no longer receive services from their trusted aids.

Similarly, Angel Care, another LHCSA among the plaintiffs serving all five boroughs, said that being a smaller agency helps to “foster great relationships with the patients and their families, in a way that large LHCSAs cannot” and that Angel Care “focuses on cultural competency and uniquely caters to the LatinX and Southeast Asian communities because of its knowledge of the languages and cultures.” Angel Care added that “there are already staffing shortages” due to COVID-19 and giving funding to the larger agencies only will cause Angel Care to “lose employees with unique language abilities and cultural knowledge, thus negatively impacting Angel Care’s ability to cater to its unique population of beneficiaries.”

In Court filings, the attorneys at Potomac Law have argued that the NYSDOH’s plan runs afoul of requirements found in the Medicaid Statute and regulations issued by the U.S. Centers for Medicare & Medicaid Services, which require, among other things, that the funds be distributed “equally, and using the same terms of performance, for a class of providers providing” the Medicaid service.

The Defendants have been ordered to file answering papers by Thursday, March 24 and to appear at a hearing on March 30 to show cause as to why an Order should not be issued stopping the NYSDOH’s planned distribution of stimulus money.

The judge will hear evidence at 9am on March 30 in Courtroom 12D of the Daniel P. Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007.

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