Day Centers Sprout Up, Luring Fit Elders and Costing Medicaid

by | Apr 26, 2013

Scores of elderly Russian immigrants played bingo under the chandeliers of a former funeral parlor in Brooklyn on a recent Monday, with a free dinner and door-to-door transportation from anywhere in the city.

Nearby, older people speaking Chinese filled a supermarket-size storefront with vigorous games of table tennis, billiards and mah-jongg, and ordered free lunch from a takeout menu featuring minced pork, beef and salty fish.

In Bensonhurst, Brooklyn, at the new R & G Social Adult Day Care Center, known locally among elderly immigrants for luring clients with cash and grocery vouchers, most people there for lunch did not stay to eat. Instead, many walked briskly toward the subway carrying bags stuffed with takeout containers, and two elderly men rode away on bicycles with the free food.

Not a wheelchair or walker was in sight at these so-called social adult day care centers. Yet the cost of attendance was indirectly being paid by Medicaid, under Gov. Andrew M. Cuomo’s sweeping redesign of $2 billion in spending on long-term care meant for the impaired elderly and those with disabilities.

Such centers have mushroomed, from storefronts and basements to a new development in the Bronx that recently figured in a corruption scandal. With little regulation and less oversight, they grew in two years from eight tiny programs for people with dementia to at least 192 businesses across the city.

Managed care companies, financed by Medicaid, pay the centers to provide services to members. But the door swings both ways: Centers also refer new clients to the companies.

Managed care became mandatory last year for people receiving home services who are eligible for both Medicaid and Medicare. The idea is to try to control spending, but about a third of the 92,000 people so far enrolled in the system statewide are newcomers to such services, many responding to aggressive marketing by social day care centers.

Centers collected over $25 million from managed care plans in the first nine months of 2012, at roughly $93 per person per session, according to state figures. The managed care companies are paid by Medicaid; in New York City, the rate is about $3,800 a month per member.

“The whole thing is going to end up costing the state much more money,” said Valerie Bogart, a lawyer with New York Legal Assistance Group who specializes in advocacy for frail elderly and disabled people. “It’s really up to the managed care plans to be the watchdogs now, and it’s like the fox watching the chicken coop, because they have an incentive to make money from these centers, too.”

It was not supposed to play out this way. The bold Medicaid overhaul, part of a grand bargain with the state’s most politically powerful health care players, has been promoted as a national model for curbing costs and reversing the incentives for fraud. It transferred tens of thousands of recipients of long-term care from a system in which providers billed Medicaid for each service to managed care, in which a capped monthly rate must cover all services to a company’s enrollees.

With the largest Medicaid budget in the country, $54 billion, New York is trying not only to rein in runaway spending, but also to “rebalance” it, away from costly institutional care, like nursing homes and medical models known for overbilling, to inexpensive supports that keep people safely in their communities.

In that context, Jason Helgerson, the state’s Medicaid chief, defended the rapid expansion of social-model adult day care, saying that without a chance to socialize and connect with others, Medicaid clients would suffer a decline in health that would add costs. But when a reporter described some of the practices observed at centers, he expressed surprise and anger.

“The idea that people are bicycling home from managed long-term care is a complete misnomer,” Mr. Helgerson said. “The idea that they’re playing Ping-Pong — I guess they could be wheelchair-bound Ping-Pong players, but otherwise it’s fraud and they are not eligible.”

Beneficiaries are supposed to be impaired enough to need at least 120 days of help with tasks like walking, bathing or taking medication. But managed care companies, not government agencies, are now mainly in charge of determining eligibility, typically by using nurses to assess each potential member.

“It is being gamed,” said an executive at a managed care company, speaking on the condition of anonymity. “There are just plums in the payment system. And the state will choose to be blind about this until something happens, which is what they did with nursing homes.”

Mr. Helgerson said it made sense to rely on the companies to police the eligibility, since they were the ones responsible for the care. “The plans are better positioned than us to stamp out fraud and abuse,” Mr. Helgerson said, adding that the office of the Medicaid inspector general would audit “on the back end.”

The Second Home day care, one of the new social day care centers, on 41st Street near 13th Avenue in Brooklyn. Under little regulation, these centers have mushroomed.

For months, however, advocates for the elderly have been complaining to city and state officials that pop-up social day care centers were siphoning healthy clients from regular senior centers, sometimes with illegal inducements, and referring them to managed care plans that eagerly enrolled them.

After The New York Times raised questions about the centers, the Medicaid inspector general’s office said in a statement on Monday that its investigators were “actively looking at adult day care services and will aggressively investigate any credible allegation.”

“Any managed care plan found to be either directly or indirectly encouraging this behavior, or looking the other way, will see their new enrollment immediately suspended,” the office said.

The office recently excluded four people from running adult social day care centers; the four were charged with bribing Assemblyman Eric A. Stevenson of the Bronx to help them open centers and to sponsor a bill that would block competing centers from opening for three years.

Competition for clients is intense. Warren Chan, the operator of two social adult day care centers in Bensonhurst, said he complained to no avail to an executive with VNS Choice, the largest managed care plan, that R & G, another of its contractors, was recruiting elderly clients with $10 grocery vouchers and cash payments. State officials confirmed that such inducements were illegal. But over all, the rules for the centers are skeletal or vague: No license is required, for example, and the minimum staff requirement is two people, one of whom can be a volunteer.

At Mr. Chan’s Asian Senior Day Care center on 18th Avenue, around the corner from R & G, Liang Mei King, 77, was one of several clients who said they were offered financial inducements to join R & G.

“I went once to see,” she said through an interpreter, interrupting her mah-jongg game. “If you get someone else, they give you $50. And each week, there’s a certain amount of money. One day there’s $5, a $10 grocery coupon, or an unlimited MetroCard. If you don’t want the MetroCard, they offer $125 in cash.”

Mr. Chan said other centers were resorting to the same tactics, and elderly immigrants who did not know better accused him of pocketing benefits himself. But when he pressed the executive, Brian Henry, the vice president of marketing for VNS Choice, to denounce the inducements, Mr. Chan said, Mr. Henry demurred, saying, “ ‘This could be kickbacks or this could be marketing.’ ” He told Mr. Chan to research the question, and when he grew upset, threatened to terminate his contract, Mr. Chan said.

Asked about the conversation, Mr. Henry said, “I’m not aware of anything you’re talking about.” He then referred all questions to the public relations department of the Visiting Nurse Service of New York. It had already declined to comment for this article.

At R & G, two young men who seemed to be in charge said they were only receptionists, and referred questions about payments to “the boss,” giving the name “Betsy” and a Long Island telephone number.

The number led to Elizabeth Geary, president of the New York State Adult Day Services Association, a 25-year-old group now deluged with inquiries.

“I am not the boss of that program or any other program in New York,” she said. “It alarms me that they would give my name, and it is also a huge concern that they are calling themselves social adult day and not providing core services.”

In a center, she said: “I would expect to see people eating together, having a lunch that is nutritionally well balanced. There might be participants who would have a vision impairment or who might have had a stroke who would need assistance in cutting the food up. It is not a takeout program by any means.”

The new social day care centers usually can afford to pay higher rent than traditional senior centers run by the city, religious groups or other nonprofits. In one recent case, the private management of a federally subsidized senior housing development in Coney Island sent an eviction notice to the longstanding Ocean Parkway Senior Center on its ground floor, and moved to replace it with a social day care center company offering higher rent.

“They are draining well-elderly out of the regular centers in every part of the city where they exist,” said Joan Pastore, the director of AMICO, a center in Borough Park, Brooklyn, that runs on about $4 a person per day. “How many frail old ladies do you know who play Ping-Pong, do computer and go dancing?”

From: New York Times

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