Objective

To determine whether the Department of Health (DOH) provided adequate oversight of Medicaid managed long-term care plans to ensure social adult day care program services met program standards. The audit covered the period from January 2019 through October 2024.

About the Program

Many of the State’s Medicaid recipients are enrolled in managed long-term care (MLTC) plans, which provide long-term care services to individuals who are chronically ill or disabled and who wish to stay in their homes and communities. These services include Home and Community-Based Services (HCBS), which encompass Social Adult Day Care (SADC). SADC has been a covered MLTC service since March 2014 and provides members with socialization, supervision, monitoring, personal care, and nutrition within a structured setting. From January 2019 through October 2024, MLTC plans made $2.4 billion in payments for SADC services.

SADCs must comply with New York Codes, Rules and Regulations (NYCRR), Title 9, Section 6654.20, which establishes minimum standards for SADC program administration and operation. Additionally, in January 2014, the Centers for Medicare & Medicaid Services issued the HCBS Final Rule (Final Rule) establishing criteria for Medicaid reimbursable settings such as SADCs. This Final Rule requires that the service planning for HCBS participants be developed through a person-centered planning process that considers health and long-term support needs in a manner reflecting the individuals’ preferences and goals, resulting in a Person-Centered Service Plan.

In December 2021, DOH utilized the site name and address provided in network submissions by MLTC plans and assigned a site ID to each to create the HCBS Sites and Contracts Database (Database). This tool allows DOH to monitor SADC site compliance with the Final Rule by documenting when annual site visits occur and the review outcomes (e.g., compliance or need for remediation).

Key Findings

We identified weaknesses in DOH’s oversight of the SADC program that resulted in non-compliance with program standards as well as questionable and improper Medicaid payments. For example, we identified over $285 million in questionable encounter payments to SADCs for service dates after the SADCs were terminated from at least one of the six MLTC networks we reviewed, including over $28.6 million paid to SADCs terminated for cause (fraud, waste, and abuse; integrity; and quality). In some cases, when one MLTC plan terminated an SADC for cause, other MLTC plans continued to pay them for services.

We also visited three SADCs and identified $1.3 million in improper payments for services lacking supporting documentation, as follows:

• From a judgmental sample of 15 members’ assessments and Person-Centered Service Plans at two of the three SADCs we visited, we found non-compliant files for 14 of the 15 members, totaling $625,360 in payments. Examples of non-compliance included payments made for claims that occurred prior to a member having their required initial assessment, as well as missing and unsigned Person-Centered Service Plans (meant to ensure the member participated in developing the plan for their services). Although DOH recommends MLTC plans review 10% of enrolled members during annual site visits, three MLTCs we reviewed met this threshold on only two of the nine site visits reviewed.
• While the NYCRR requires that SADC services be documented, neither the rules nor DOH specify what is considered sufficient documentation to support billing for SADC services. All three SADCs we visited used member sign-in logs to document the delivery of services; however, our review of these logs found 7,964 of 92,969 encounter claims (about 9%) totaling $672,147 were not supported by a sign-in log. DOH’s ability to assess the benefits of the SADC program—as well as its ability to protect Medicaid dollars from waste or abuse—is limited without detailed documentation requirements supporting that services were provided as well as a routine review of what services are provided.

Additionally, SADCs are required to use a facility with sufficient space to accommodate program activities and services and to operate the facility in a manner that prevents hazards to personal safety. We reviewed the Certificates of Occupancy and other related documentation found in the NYC Department of Buildings’ Building Information System for two SADCs, finding that MLTC plans were not always ensuring SADCs meet requirements as follows:

• One SADC that opened a site in 2018 had a violation still listed as active as of November 2024 for not amending the Certificate of Occupancy issued in 2014 for the ambulatory health care facility that previously occupied the space. For a second location for the same SADC, an August 2017 violation stated that a new Certificate of Occupancy was to be obtained after a complaint of work without a permit was filed in August 2017; however, as of May 2024, no updated certificate had been issued.
• One SADC operating on three floors at a location had, according to the Certificate of Occupancy, a combined maximum capacity of 323 people. We identified 386 service dates where the members exceeded this capacity. For example, according to encounter claims data, on September 28, 2022, this SADC served 530 members (totaling $47,255 in payments)—207 over its maximum allowed capacity.

Key Recommendations

• Review the improper and questionable encounter payments identified in this report and make recoveries, where appropriate.
• Strengthen monitoring of SADC services to prevent improper payments and confirm that members receive the services outlined in their Person-Centered Service Plans.
• Ensure that SADCs obtain the proper Certificate of Occupancy or take necessary corrective actions. Additionally, enhance monitoring of MLTC plans to ensure they obtain the proper Certificates of Occupancy before enrolling SADCs in their network.