CDPAP FI – Litigation Alert

The Situation Report | March 24, 2025

Administrative Rate Methodology for Medicaid Managed Care Fiscal Intermediary Reimbursement Declared Null and Void by State Court 

Back in July 2024, the Consumer Directed Personal Assistance Association of NYS (CDPAANYS) and several individual fiscal intermediaries filed a petition in State Supreme Court (Albany County) to challenge the NYS Department of Health (DOH) administrative rate methodology for FIs in Medicaid Managed Care. The new three-tiered rate methodology for administrative costs took effect in August 2024. 

In connection with its petition, CDPAANYS also filed a motion for a preliminary injunction (MPI) to temporarily stop the implementation. Although the MPI was denied by the Court a few months later, the litigation on the underlying CDPAANYS petition continued. DOH then filed a motion to dismiss the case. 

After months of waiting for a decision in the case, on March 20, 2025, the State Supreme Court in Albany County issued its decision on both the CDPAANYS petition and the DOH motion to dismiss. In short, the Court determined that the DOH decision to implement the change in the administrative rate methodology was not lawful. The Court denied the DOH motion to dismiss and granted the CDPAANYS petition requesting relief – and declared the three-tiered reimbursement rate methodology to be null and void. 

HCANYS will continue to monitor this development and report on further activity, DOH statements, and possible appeals.