A year after settling a civil fraud case for almost $47 million, CenterLight Health System has sold its Medicaid-managed long-term-care Select plan to the for-profit Centers Health Care, based in the Bronx.
The acquisition will make its Centers Plan for Healthy Living, based in Staten Island, the third-largest MLTC operator in the state, behind Fidelis Care and GuildNet. Centers Health Care runs more than 30 skilled-nursing and rehab facilities in New York, New Jersey and Rhode Island. Terms of the deal were not disclosed.
For CenterLight, a Bronx nonprofit whose roots date back to 1920, the deal represents the latest in a series of asset sales since the court settlement.
CenterLight sold two nursing homes for $77.8 million to an LLC in which Centers Health Care chief executive Kenny Rozenberg has a majority stake. Those deals, which Crain's reported in March, have not yet closed, according to the state Department of Health.
Consumer-rights advocates told Crain's they are worried about the impact of the transition on the plan's elderly, low-income members. They said they fear Centers Health Care will reduce the number of home-care hours members are eligible for, leading more people to enter nursing homes—an outcome the managed long-term care programs seek to avoid.
"As people transition from one plan to another, the big question is how will it affect their services," said Bryan O'Malley, executive director of the Consumer Directed Personal Assistance Association of New York State, which represents the fiscal intermediaries who help consumers manage functions such as payroll and benefits when they hire their own home-care workers.
Members in CenterLight Healthcare Select will automatically become members of Centers Plan on Feb. 1, unless they chose to switch to another MLTC provider by Jan. 11, according to a Dec. 1 letter from Mary Shinham, chief financial officer of CenterLight's managed-care plan, that was sent to members and shared with Crain's.
"CenterLight Healthcare and Centers Plan will work to ensure that the transfer of your membership to Centers Plan is smooth and without disruption," Shinham wrote.
CenterLight had 4,969 members enrolled as of Dec. 1 in its Select managed long-term care, a 34% decline from 2014. MLTC plans cover home health services and nursing home care for the low-income elderly and disabled. Many MLTC members are eligible for both Medicare and Medicaid.
CenterLight Healthcare, the managed-care plan, lost $25.5 million in 2014, despite earning $790 million in revenue in 2014, the most recent year for which financial information is available. CenterLight is ranked No. 3 on Crain's list of the largest health care nonprofits in the New York City area.
In January 2016, CenterLight agreed to a settlement of a federal whistle-blower lawsuit in the U.S. District Court for the Southern District of New York following investigations by U.S. Attorney Preet Bharara and state Attorney General Eric Schneiderman. The nonprofit admitted it had fraudulently billed Medicaid for ineligible services for more than 1,200 members.
O'Malley said he fears that if Centers Plan offers a lower reimbursement rate for home care, it could become harder for families to hire workers.
"It's not the easiest minimum-wage job to recruit for," he said.
The leaders of both CenterLight and Centers Plan provided statements to Crain's through a Centers Plan spokesman.
"CPHL is committed to involving the member, and the member's health care decision makers, to optimize and coordinate each member's plan of care," said Mark Bloom, chief executive of Centers Plan.
"We are working closely with Centers Plan to ensure that the transition of our members will be easy, stress-free and seamless," said Ben Duster, chief executive of CenterLight Health System.
However, advocates say they want more concrete assurances. Amy Lowenstein, senior health attorney at the Empire Justice Center in Albany, said she would like to see a 90-day period following the transition in which Centers Plan can't change the services.
Neither the state Department of Health nor the plans have provided such a guarantee, either in responses to Crain's or in conversations with advocates.
"The letter sent to the member ensures choice and continuity to mitigate any potential service delivery disruption," the Health Department said in a statement. "The plan of care is maintained until the scheduled reassessment is due."
What is unclear is whether a plan can reduce the number of personal-care hours if it conducts one of its twice yearly assessments during that 90-day period. A plan would still have to adhere to state regulations that stem from a federal court decision requiring a change in a client's medical, mental or social circumstances or a material mistake during an assessment for services to reduce hours.
The MLTC plans cover in-home nursing care and personal care, including assistance with eating, bathing and dressing, as well as housekeeping, meal preparation and shopping.
"If this is the person that's helping you get out of bed and doing your grocery shopping and you don't know what's going to happen with that next month, that can be really scary. You could face going into a nursing home," said Amy Lowenstein, senior health attorney at the Empire Justice Center in Albany.