Every day across New York State, thousands of part-time workers visit the homes of developmentally disabled people to teach them simple tasks, like grooming or how to take a bus.
But when the nonprofit organizations that employ those workers bill the state, they collect three and four times that amount — with some having received as much as $67 an hour.
Spending on this little-known home care program, called Community Habilitation, has soared in recent years, creating multimillion-dollar surpluses at some nonprofit agencies and eye-popping salaries and benefits for those who run them.
And it helps explain how New York’s costs of caring for developmentally disabled people have ballooned in recent years, creating the nation’s most generous system of Medicaid-financed programs, with little scrutiny of its efficiency or results.
Indeed, New York reimburses the nonprofit providers for home care visits for the developmentally disabled at such beneficial rates — far more than for similar services here or in other states — that the money has propped up failing nonprofit providers and built juggernauts out of modest ones.
Esther Lustig, executive director of a Brooklyn nonprofit organization that has become a major provider of the home care visits, saw her compensation double, to nearly $400,000, over two years.
Lynne Brush, a retired social worker who served as chairwoman of a nonprofit provider in Kingston, N.Y., said it nagged at her conscience that her organization was able to collect so much more than it paid its workers. “I lost sleep over the fact that we were making money hand over fist,” Ms. Brush said. “I don’t like a system that makes money off poor people.”
The home care program has been described in official documents as “the linchpin” of the state’s plans for services to developmentally disabled people, those with conditions like cerebral palsy, autism and Down syndrome.
Its aim is to help the developmentally disabled build basic life skills so that they do not have to live in state-financed group homes and can stay with their families or by themselves. The tasks the program sets out to teach, like brushing teeth or communicating in accepted ways, can be arduous to master yet life-changing for those who learn them.
Over the past three years, spending on the program has risen more than 40 percent, to $183 million last fiscal year. And like much of New York’s system for the developmentally disabled, it gives significant discretion over how much public money should be spent to the nonprofit providers.
The state allows the providers, for example, to assess how many hours of care a week each developmentally disabled person’s condition warrants. Other states typically have independent entities make that determination, given the obvious incentive to nonprofit organizations to overprescribe services, said Allan I. Bergman, a Chicago-based consultant to providers of services to the developmentally disabled.
“In the old days, we would say it’s the fox guarding the hen house,” Mr. Bergman said.
Until two years ago, each nonprofit provider negotiated with the state for its reimbursement rate. The state phased in regional rates, which are all about $40 an hour. During the phase-in period, some providers received far more, as much as about $67 an hour for those that claimed high expenses.
The providers also decide how much to pay their workers. One upstate provider last year advertised starting pay of $9 an hour while collecting four times that much from the state.
The nonprofit providers have limited expenses beyond the cost of hourly workers. They must generate brief monthly summaries on each person’s progress. And they have few overhead expenses: The employees typically travel from their homes to the homes of the developmentally disabled, so little office space is needed.
After repeated inquiries from The New York Times, Courtney Burke, the commissioner of the State Office for People With Developmental Disabilities, acknowledged that the structure had led to runaway costs.
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