Powerful nurses union scheming to make bank off Hochul’s changes to NY’s $9B Medicaid program

One of New York’s most powerful unions has been scheming to benefit from Gov. Kathy Hochul’s proposed changes to the state’s allegedly fraud-ridden $9 billion home care Medicaid program, sources say.

Service Employees Local Union 1199 SEIU United Health Care Workers, best known as 1199 SEIU, appears to be trying to massively boost its membership and leverage the state into shelling out even more cash for the Consumer Directed Personal Assistance Program by ultimately increasing wages for workers, according to sources and documents obtained by The Post.

The CDPAP — which allows New Yorkers to get paid to take care of loved ones — operates using hundreds of businesses and nonprofits that essentially work as payroll agents between Medicaid and caregivers with minimal oversight.

Part of Hochul’s suggested reforms to cut costs in the rapidly growing program involves putting up a huge contract up for bid that would consolidate the work currently done by the 700 middlemen firms under one company chosen by the Department of Health.

But the politically powerful 1199 SEIU, which counts more than 450,000 members, has been reaching out to prospective bidders behind the scenes and urging them to agree to 200,000 CDPAP homecare workers unionizing under its umbrella and to increasing their wages, according to the damning documents.

“[The prospective bidder] and 1199 SEIU will jointly advocate for funding sufficient to increase wages and benefits for consumer directed personal assistants,” the unsigned memorandum of understanding shared with The Post reads.

It further states that the firm who snags the state contract “will remain neutral with respect to the question of whether CDPA’s choose to be represented by 1199 SEIU.”

A source familiar with one prospective contractor’s efforts to get the deal said the firm felt pressured to sign the MOU in order to placate the union, which has for years taken an increasingly heavy hand in crafting policy in New York.

“1199SEIU spoke to bidders who reached out to us or who we believed were eligible to bid,” the union’s spokesperson Rose Ryan, confirmed when The Post reached out with questions about the MOU and CDPAP.

Several sources familiar with similar agreements said it was not unusual for a union to work out a deal with a potential contractor ahead of work being awarded, though it’s far more common in the building trades.

But many also noted they were not surprised that 1199 SEIU was trying to benefit from what John Kaheny, Executive Director of government accountability group Reinvent Albany dubbed “one of the biggest organizing opportunities in New York to come along in a very long time.”

“The fact that 1199 is pre-negotiating with all the competitors for a state contract is that normal? I don’t know,” Kaheny said.

“It’s kind of an amazing flex by them that they’re able to have the reach and sophistication and power to be able to pull that off,” he said.

Bill Hammond, Senior Fellow for Health Policy at the government watchdog group Empire Center, added: “The political world does not mess with [1199 SEIU] and more often than not the political world caters to them.”

“Any bidder with the slightest understanding of what they were getting into when entering into this contract would know what that meant when [1199SEIU] put that piece of paper in front of them,” Hammond said, dubbing the union “close to being the fourth branch of government” in New York.

In the first half of this year, 1199 SEIU’s state political action fund committee has already shelled out around $1.4 million on political campaigns and other politics-related infrastructure.

The union also isn’t afraid to dispatch its members to pest legislators in Albany or knock on doors for its favored candidates.

1199 SEIU first waged war against Hochul’s executive budget proposal unveiled at the start of the year, which called for cutting a state-funded wage boost for CDPAP caregivers. She later floated a proposal to give the DOH more power to control and limit the middlemen firms, called fiscal intermediaries.

In March, the union held a press conference with elected officials and people who receive care under the CDPAP to lambast Hochul, claiming her plan would leave them to rot in nursing homes.

But less than a month later, 1199 SEIU considerably changed its tune.

As Hochul and legislative leaders haggled over the state budget behind closed doors, news leaked that her plan for the CDPAP had changed considerably — to the one that was ultimately adopted involving consolidating the fiscal intermediaries under one handpicked firm.

Some disability rights activists, lawmakers and trade groups representing the hundreds of existing fiscal intermediaries began raising hell, while 1199 SEIU released a statement supporting the new proposal.

“This was not something that we said, ‘you know, this is our goal in this budget to move this proposal.’ Once it had momentum, we were happy to endorse it,” 1199 SEIU political director Helen Schaub later told Crains.

“This was not our proposal coming into this legislative session,” the 1199 SEIU spokesperson echoed Wednesday.

Hochul’s office declined to say whether she still believes the singular fiscal intermediary model will control costs given the MOU agreements promise to advocate for raising wages.

While the fiscal intermediaries were unsuccessful in stopping the overhaul from making it into the budget, they’ve since sued to try to stop the contract from going forward in at least three different pending cases.

“If Governor Hochul wants to see what a ‘racket’ actually looks like she should look in the mirror and around the back room where she cut this deal,” said Max Rodriguez, manager of government affairs, at the Center for Disability Rights.