A federal judge has preliminarily approved a $162 million class action settlement to approximately 200,000 home care workers over alleged payroll and benefits violations after New York transitioned its Medicaid-funded Consumer Directed Personal Assistance Program (CDPAP) to a single fiscal intermediary.
News of the proposed settlement comes weeks after the U.S. Department of Justice (DOJ) filed a separate lawsuit against PPL, as well as the New York Department of Health, over an alleged fraud scheme.
The case is one of the first private class action lawsuits that would be settled under the New York Home Care Worker Parity Act — a state law mandating that Medicaid-reimbursed home aides are paid a base wage plus supplemental benefits, according to the plaintiffs’ attorneys.
The New York CDPAP is a state Medicaid program that allows individuals with assistance needs to select caregivers, called personal assistants, for home-based care. New York’s Department of Health transitioned the program to have a single fiscal intermediary, and the process became embattled with extensions, a restraining order, lawsuits and protests.
The settlement would provide the nearly 200,000 home care personal assistants with payments for general damages, lost benefits, the value of their accrued time off and other reliefs, according to the plaintiffs’ lawyers.
The Legal Aid Society and Katz Banks Kumin LLP represented the current and former CDPAP personal assistants who filed the lawsuit.
“This settlement shows that New York’s Home Care Worker Wage Parity Act provides meaningful benefits and protections for home care workers,” said Hugh Baran, partner at Katz Banks Kumin LLP, in a July 1 statement. “The court’s approval today marks a major step forward, and we look forward to final approval.”
A PPL spokesperson confirmed that the company reached a proposed agreement with the plaintiffs, adding, “We categorically deny the allegations in this lawsuit, and the settlement reflects no admission of liability or wrongdoing.”
“Now that the court has preliminarily approved the settlement, we look forward to continuing the settlement process so that we can put this matter behind us and devote our full attention to supporting the hundreds of thousands of New Yorkers who rely on CDPAP to receive care in their homes and communities,” the PPL spokesperson told Home Health Care News in an email.
Alleged misrepresentations
Four current and former CDPAP personal assistants, Philip Calderon, Farshad Pinchasi, Allison Fields and Dana Folgar, filed the class action lawsuit Calderon v. Public Partnerships, LLC. They alleged that PPL did not pay personal assistants accurately and on time and failed to provide benefits compliant with the New York Home Care Worker Wage Parity Act, thereby violating state and federal law.
News of the proposed settlement comes nearly two weeks after the Department of Justice filed a separate lawsuit against New York’s Department of Health (DOH) and PPL, alleging that the deal funneled millions of dollars of extra revenue to PPL.
The DOJ alleges that PPL made an “artificially attractive proposal by making repeated material misrepresentations” to win its bid as the DOH’s sole fiscal intermediary for CDPAP, including misrepresentations of its staffing plan, financial readiness to perform the contract and the quality of its in-house software.
Furthermore, the DOJ alleges that PPL added small profits to the cost of each care hour billed through CDPAP. This amounted to “tens of millions in ill-gotten gains” since CDPAP bills New York for around 350 million care hours each year, according to the suit.
“The scheme has caused and continues to cause substantial harm to many thousands of vulnerable home-care Medicaid patients and caregivers, to small- and medium-sized New York businesses who were put out of business, and to the American taxpayer who ultimately is footing the bill,” the DOJ alleged in the June 16 filing.
By fall 2024, CDPAP was one of New York’s largest health benefits programs with over 250,000 patients and 300,000 caregivers, according to the DOJ suit.