New York Homecare Companies Sue HHS, State Over COVID Relief Funds

ALBANY, N.Y. (March 22, 2022)—Seven New York state homecare providers have filed suit against the United States’ Department of Health and Human Services (HHS) and the New York equivalent Department of Health (NYDOH). The suit, filed late last week, alleges inequitable and arbitrary disbursement of funds provided by the American Rescue Plan. 

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.

According to the suit, the state of New York received $2.15 billion of federal support for Medicaid home- and community-based services. NYDOH is tasked with the disbursement of funds, with oversite from the Centers of Medicare & Medicaid Services (CMS). The suit alleges the first payment request from NYDOH for $361 million for home health agencies focused only on 212 of the largest home health agencies in the state out of 800. The suit states there were 235 awards for these 212 agencies, average more than $1.7 million per agency. 

The distribution plan was approved by CMS. 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 suit points out than many smaller agencies serve smaller, more diverse populations that would be harmed by an agency closing.

The plaintiffs are suing for declaratory judgement that the disbursement plan violates the American Rescue Plan’s intent, and an injunction prohibiting distribution until a more equitable method is chosen.

Potomac Law Group PLLC is representing the agencies. Read the text of the suit here.