New York lawmakers on Thursday unveiled new bombshell evidence suggesting Gov. Kathy Hochul’s administration allegedly rigged a massive contract process for an $11 billion Medicaid home healthcare program.
Aggravated state senators called the hearing in Lower Manhattan following months of controversy over the revamp of the Consumer Directed Personal Assistance Program. The lawmakers spent hours grilling Health Commissioner James McDonald and a rep for Public Partnerships LLC, the company that was awarded the no-bid contract to manage the CDPAP scheme.
State Sen. James Skoufis (D-Orange) who chairs the Committee on Investigations and Government Operations, co-chaired the testy hearing — scrutinizing whether the process to award the contract, which could prove to be a windfall for PPL, was rigged in the firm’s favor.
He confronted McDonald with a draft of state legislation from April 2024 that would have handed the contract to PPL, suggesting officials weren’t truly considering other companies. PPL eventually won the contract months later.
”There’s a bill draft from early April that names PPL. It wasn’t in the enacted version because the Senate pushed back on a no-bid contract, but the executive came to us naming PPL in a no-bid contract,” Skoufis charged.
“Then, miraculously, PPL gets the award a few months later.”
The existence of the draft bill was first noted by the Albany Times-Union in June. It reads: “The department of health, through the commissioner, shall contract with Public Partnerships, LLC (‘statewide FI’) to provide on a statewide basis the services of a fiscal intermediary.”
McDonald claimed he never saw the draft bill and maintained that the contract process was above board.
“Senator, I really don’t know how to comment about a bill draft because I never saw that,” he said.
The governor pushed for the overhaul, ostensibly in order to cut down on rampant waste, fraud and abuse in the program, which had grown from $3 billion in 2018 to $11 billion in 2024, per McDonald’s testimony.
The overhaul involves consolidating hundreds of middlemen firms that acted as “fiscal intermediaries” between Medicaid, which funds the program, and the home health aides employed by it under one company’s umbrella.
But many senators have soured on the move, after voting to approve it as part of last year’s state budget.
A PPL executive who was grilled later in the hearing claimed that the company had no contact with the governor’s office or health department prior to the contract process beginning.
“The CEO down to you, down to every other employee at the firm did not have one single phone call, email, text, any conversation prior to enactment of the budget in May?” Skoufis pressed.
“Correct,” Patty Byrnes, PPL’s vice president of government affairs said.
In a statement, Hochul’s office did not deny that it drafted the bill Skoufis presented, and maintained that the selection process for PPL was above board.
“The shift to a single fiscal intermediary went through a standard procurement process at DOH, following the law passed by the State Legislature – and no State officials knew who would be selected until the procurement process was complete,” a spokesperson for Hochul wrote in a statement.
“Now that we’ve ended the ‘wild west’ of the old system and moved to single fiscal intermediary with strong State oversight, New York can effectively protect CDPAP for home care users and workers and ensure the program delivers the best results for those who need it,” the statement said.
Several lawmakers were visibly furious with McDonald, who showed up apparently unprepared to cite specific data about the transition of hundreds of thousands of the program’s recipients and their caregivers when asked.
“I didn’t bring those numbers with me,” McDonald said, when asked by Sen. Gustavo Rivera (D-Bronx) to provide the number of workers who had been paid as of early April.
McDonald also drew jeers from the audience and more ire from lawmakers when he claimed he wasn’t aware of widely reported issues and bid rigging allegations surrounding the program.
The health commissioner repeatedly blamed “misinformation” for the agency and PPL’s failure to ensure hundreds of thousands of homecare recipients and their caregivers were transition to the new middlemen by the statutory April 1 deadline.
“I think you’re just continuing to perpetuate the misrepresentation that you claim was bestowed upon this program,” state Sen. Siela Bynoe (D-Nassau) said, excoriating the health commissioner.
“You’re not giving us numbers. You’re not giving us data. You’re not giving anything to refute the fact that this contract was not, in fact, transitioned properly to start, and that you have any type of guidelines, protocol and a process in place to ensure that you’re maintaining what they are actually contractually required to give us,” she said.
Harlem state Sen. Cordell Cleare (D-Manhattan) told Byrnes and McDonald that their responses were “an insult” to New Yorkers.
Skoufis stopped short of calling McDonald a liar, but said his statements were “seemingly unbelievable.”
He and Rivera promised a follow up to the hearing, but did not specify if that meant subpoenaing for more information.
“A lot of the statements from both of them were stunning and seemingly unbelievable. And we’re going to continue to pursue sort of those threads,” Skoufis said.
