N.Y. Times: Are Adult Day Care Centers “Gaming” Medicaid?

The number of Medicaid-funded adult day care centers in New York City is 24 times bigger today compared to two years ago with nearly 200 locations sprouting up across the city, but many are suspected of taking advantage of the new managed care system, says a New York Times article.

Medicaid benefits are meant for individuals who have impairments requiring at least 120 days of help each year with activities such as walking, bathing, or getting dressed in the morning.

Seniors visiting New York’s adult day centers do not seem to fit this description: The Times article notes several instances where older people participated in “vigorous” games of table tennis and billiards at such centers, while some even left on bicycles with bags of carry-out food in hand.


Nary a wheelchair or walker was in sight at these adult day centers, observed the Times, yet the cost of attendance was indirectly being paid by Medicaid under Governor Andrew M. Cuomo’s $2 billion of spending on long-term care meant for the impaired elderly and those with disabilities.

Because of little regulation and oversight, these centers have experienced a boom in the past two years, growing from just eight “tiny” programs for people with dementia to at least 192 businesses across the city, the article writes.

The centers are paid by managed care companies, which have collected more than $25 million from managed care plans in the first nine months of 2012 at roughly $93 per person, according to the New York Times. Medicaid then pays these managed care companies at a New York City-rate of approximately $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, to the New York Times. “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.”

New York state has the country’s largest Medicaid budget, at $54 billion, and the state’s program redesign process, spearheaded by Gov. Cuomo, transferred tens of thousands of long-term care recipients to a new managed care system.

Some argue that without socialization, seniors could face further health deterioration, but what’s happening at some of the adult day centers goes beyond basic social contact.

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“The idea that people are bicycling home from managed long-term care is a complete misnomer,” Jason Helgerson, the state’s Medicaid director, told the Times. “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.”

A managed care company executive admitted some are taking advantage of the new managed care model.

“It is being gamed,” an anonymous executive says in the article. “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.”

The Medicaid inspector general’s office told the Times in a statement on Monday that its investigators were “actively looking at adult day care services and will aggressively investigate any credible allegation.”

Advocates for the elderly have been complaining that these “pop-up” centers have been siphoning clients from regular senior centers, often times with bribes, and referring them to managed care plans that eagerly enrolled them. Some seniors spoke of kickbacks in the form of coupons or gift cards.

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

Read the New York Times article.

Written by Jason Oliva