The Impending NYS LHCSA RFO: Advice and Advocacy

“We’re still dealing with the tremors from the first earthquake—yet the ground is opening up again with a new seismic shock.”


So says Roger Noyes, recent past Director of Communications at the Home Care Association of New York State (HCA-NYS). He’s referring to the upcoming Licensed Home Care Services Agency Authorization Process, a.k.a. the LHCSA RFO.


Delivery of managed and non-managed care services in NY is always a shifting field. With varying degrees of success, the legislature tries to balance the (often conflicting) needs of patients, agencies, home healthcare aides, Medicaid budget, and the government’s administrative burden. 


And given the complexity of the system, lawmakers may be voting on changes without fully anticipating their implications. 


The twin stories of the FI (Fiscal Intermediary) and LHCSA RFOs highlight the inconsistencies in the state’s design and oversight of the system. Even more importantly, they underscore the need for advocacy by home healthcare agencies and FIs.


Noyes encourages both FIs and LHCSAs to reach out to their legislators about the RFOs. To help, he outlines four clear talking points. But first, let’s review a brief history of how we got to where we are today.


TL,DR: Click here to skip the background and go straight to the recommendations.



In 1992, New York introduced the Consumer-Directed Personal Assistance Program (CDPAP). CDPAP empowers patients receiving Medicaid-certified home care to hire and manage their caregivers. 


Noyes explains that CDPAP benefits consumers in two ways:

  1. Allows them to find a caregiver (known as a personal assistant) with whom they’re physically and culturally comfortable, such as a family member or friend
  2. Help consumers access caregivers even in areas with staff shortages.


Medicaid pays the CDPAP caregivers through FIs who handle administrative and other responsibilities for the consumer and personal assistants. An FI can be a stand-alone business or also a LHCSA. 


Experts estimate that up to 90% of FIs are also LHCSAs.



By 2019, there were 600 licensed FIs in New York State. In its ongoing efforts to control Medicaid spending and increase efficiency, the legislature made a move to limit that number:


The DOH (Department of Health) issued an RFO, Request for Offers, for all FIs who wanted to continue serving as CDPAP contractors. 


While the DOH’s goals were understandable, the RFO raised serious concerns. “We’ve found that the process was lacking in transparency. What were the standards for which FIs are in and which are out? Many quality FIs with years of experience didn’t get the award,” says Noyes.


In fact, in February 2021, the state awarded less than 70 FIs to be lead FIs, contracting directly with Medicaid. The other hundreds of FIs can only operate as collaborating partners, sharing their patients—and profits—with the lead FIs. Many FIs can’t run a viable business with that model.



The opacity of the FI RFO process is heightening industry concerns over the all-too-similar impending LHCSA RFO. While the DOH hasn’t yet started the process, the intent is clear: 


Limit the number of LHCSA just as it limited the number of FIs.


There’s pushback both from industry groups and within the legislature. For example, in March 2021, Assembly Health Committee Chairman Richard Gottfried introduced a bill to repeal Section 3605-c and introduce a second FI RFO for non-awardees. Senator Rachel May introduced a companion bill in the Senate.


Although the FI RFO bill was not included in the final budget, there was a bright spot. As a compromise, the NYS 21-22 budget permits the DOH to make additional FI awards, based on a two-step process. 


First the DOH will survey all FIs to determine:


  1. Where is its main business address?
  2. Was it an FI prior to 1/1/12?
  3. Does it have non-profit status?
  4. Does it provide services to the developmentally disabled or racial and ethnic minorities?
  5. Is it a minority woman-owned business


Based on the survey responses, the DOH will make additional FI awards. The language allows for the DOH to add anywhere from 24 to more than 40 new awardees. 


April 2019 – The NYS 19-20 Budget authorizes creating a CDPAP FI stakeholder workgroup to recommend best practices for delivering CDPAP services.
December 2019 – Based on recommendations from the workgroup, DOH issues RFO #20039 for FIs 
May 2020New York State 20-21 Budget creates Public Health Law Section 3605-c, authorizing the DOH to limit the number of LHCSAs through an Authorization/RFO process. DOH has not yet issued that RFO.
February 2021 – CDPAP RFO award list is released.
March 2021 – Assembly Health Committee Chairman Richard Gottfried introduces bill to expand FI RFO process and repeal Section 3605-c. Senator Rachel May introduces a companion bill in the Senate.
April 2021 – NYS 21-22 Budget authorizes the DOH Commissioner to add additional FIs to the awards list.
May 2021– The Senate and Assembly introduce legislation (S.6640/A.7304) to repeal the

LHCSA RFO, but adjourn in June without acting on the bill.

June 2021- The DOH issues a survey, due on July 30, to determine supplemental FI awards. 


What now?

Non-awardee FIs are in limbo. 


While they can continue to operate until 90 days after the Contract Notification Date, as yet unreleased, the state already issued Transition Guidance. The DOH says it anticipates announcing awards “with adequate time for an anticipated contract start date of

November 1, 2021.”


There is an appeals option, but so far, it hasn’t proven helpful. A survey, due on July 30, will now determine which FIs will receive the additional awards.


LHCSAs are waiting for the other shoe to drop with the release of their RFO.


But it’s NOT simply a waiting game, says Noyes. He recommends that agencies and FIs stay proactive. Reach out to lawmakers, asking them to repeal the LHCSA RFO and further modify the FI RFO. 


Even though the state Legislature adjourned in June for the year, it could reconvene for a “special session” to act on the repeal legislation. And even when not in session, legislators can relay industry concerns to the DOH and call for the RFO’s suspension.


Talking Points

The HCA is advocating for repeal, too, making the following points:


  1. Lack of transparency in the process – In fact, Senator Gottfried used extremely strong language in his legislative memo, saying, “This arbitrary and extraneous contract limitation is bad health policy and morally objectionable.”


  1. Concerns about continuity of care – While this is not the legislature’s intent, limiting FIs will likely reduce the number of CDPAP caregivers, at least in the short term. With an existing shortage of home health aides (HHAs) as it is, there will be patients forced to go without much needed care. Limiting LHCSAs will further exacerbate the problem.


  1. Lack of necessary data – Instead of rushing into new laws and arbitrary limits, the DOH will be better served to study the system first. It can work with providers and their associations to develop agency benchmarks. Solid data and standards can then determine the ideal number of contracts needed to serve the NY population. 


  1. Find more balanced ways to achieve the objective – Once the government has the necessary data, it can find a fair way to scale the program. Noyes explains that many FIs and LHCSAs with active licenses aren’t operating at all. The state can address these non-operating agencies instead of shutting large agencies serving hundreds of patients.


“The legislature has understood the perils of the current system and is looking to expand the supplemental process. We are fighting hard for it! Let’s see if we can come up with a more systematic and transparent process that’s responsive to the growing demand for home healthcare,” says Noyes.


Agencies can do their part, too, making the above arguments to their state representatives and senators.

At Melody Benefits, we’ll keep you posted on the latest industry developments. That’s part of our commitment to wage parity benefits and our home health care agencies.

Melody Benefits’ clients enjoy a 90% average employee retention rate.

Staying compliant does more than keep you from incurring penalties. It offers the opportunity to take care of your employees, building loyalty and engagement.

And THAT’s the secret to an agency surviving—and thriving—in an ever-evolving industry.

Discover how 27+ home health care agencies are already maximizing savings and keeping employees satisfied with Melody Benefits.