A company whose operation of an $11 billion home health care program for New York has been marred by widespread complaints faced new questions on Friday about how it had come to win the contract.
At a hearing with lawmakers last month to review its performance, Public Partnerships insisted that it had had no communications with state officials before the contract was awarded. Any such contact is generally not permitted, in order to avoid attempts at influencing the bidding process.
No, the company official testified, everything had been done by the book.
At the proceedings, Dr. James V. McDonald, the commissioner for the Department of Health, the state agency that awarded the contract, appeared to agree.
“We followed the procurement rules,” he said, adding that he had no “direct knowledge” of any conversations.
But in a letter to lawmakers shared with The Times, Patricia Byrnes, a company executive for government relations, admitted that there had been “general communications” with the staff of the state’s health department in March and April of 2024. During that period, New York was considering ways to save money in the program, which allows hundreds of thousands of chronically ill and disabled people to avoid institutionalization by providing them with home care.
It is not clear what the content of these conversations were, or if they contributed in any way to Public Partnerships’ winning bid. Neither Gov. Kathy Hochul, nor the Department of Health responded to questions about the content of these communications, or who had instigated them.
“This complete reversal of PPL’s testimony confirms the serious doubts I’ve held about the accuracy of their statements under oath,” said State Senator James Skoufis, chairman of the Senate Investigations and Government Operations Committee, adding that “we must determine what the Department of Health and PPL knew and when they knew it.”
Mr. Skoufis said that in the coming days he would meet with legislative leaders and the chairman of the Senate Health Committee, Senator Gustavo Rivera, to discuss the next steps in the inquiry into the company.
A representative for Gov. Hochul, Sam Spokony, rejected the notion of any impropriety.
The contract was awarded after “a standard procurement process at D.O.H.,” he said, adding that “no state officials knew who would be selected until the procurement process was complete.”
The revelation in the letter raises fresh questions about the state’s decision to consolidate management of the Consumer Directed Personal Assistance Program, replacing the roughly 700 firms which had handled payroll and other financial matters with a single firm, Public Partnerships. Since it took over C.D.P.A.P., patients and caretakers have complained of service glitches like late and missing pay checks and poor customer service.
State lawmakers have previously noted irregularities in the competitive bidding process, including the fact that the contract was exempted from review by the state comptroller.
Then there is the draft legislation from April of 2024 mentioned by Mr. Skoufis in the hearing last month, which refers to Public Partnerships as the program administrator, before a single bid had been issued.
During the August hearing, Mr. Skoufis questioned Dr. McDonald about the draft, and how it had come to be that the enacted statute was so specific that only four bidders ultimately qualified.
Dr. McDonald demurred. “You folks were part of creating the law,” he said. “I would hope you would have better knowledge of why this language is in there because you’re lawmakers.”
The admission comes nine months after Public Partnerships took over the C.D.P.A.P. program, considered a model by some health care advocates for granting disabled people greater autonomy over their care. But the program’s success was also a liability — between 2017 and 2024, enrollment exploded from 12,000 to 250,000, straining the state budget.
Last month, the company announced it had processed upward of $2.2 billion in payroll, for roughly 236,000 caregivers. The company has promised it will save the state hundreds of millions in administrative fees.
But advocates insist that the administration has been so error-prone and unresponsive that some users have given up entirely, shifting to another program that will cost the state more in the long run.
Nonetheless, officials insist that the elimination of middlemen from the program had been necessary to end fraud, waste and abuse.
During the hearing, held in New York City, the Department of Health testified that the state was on track to save $500 million each year.
In a statement, a spokeswoman for the department said that the commissioner was unaware of any communications between the state and Public Partnerships.
“Our focus remains on ensuring a smooth transition and continuity of care for New Yorkers who rely on these vital services,” she said.
Grace Ashford covers New York government and politics for The Times.
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