LHCSA Licensure Process Still on Hold

Many members have inquired about the status of the application process for Licensed Home Care Services Agencies (LHCSAs) as well as the status of the new LHCSA Request for Offers (RFO) process established in last year's State Budget.

In correspondence and conversation, the Department of Health (DOH) has indicated that the LHCSA licensure process continues to be at a standstill. For background, the moratorium on new LHCSA license applications set in place in the 2018-19 State Budget concluded in March 2020. LHCSA need methodology regulations were finalized and promulgated around the same time. The new regulations for LHCSA licensure will require applicants to demonstrate need for a new LHCSA as well as undergo a financial and character competency review. The newly established review process provides a rebuttable presumption that there is no need if a county has five or more LHCSAs. However, the regulations allow for LHCSAs serving populations within Continuing Care Retirement Communities (CCRCs), Assisted Living Programs (ALPs), Nurse-Family Partnerships (NFPs), and Programs of All-Inclusive Care for the Elderly (PACE) to be licensed with no demonstration of need on behalf of the applicant.

According to the Department, the LHCSA application forms and guidance setting forth the new need methodology process are still undergoing internal review. Currently, there is no timeframe for their release. In the meantime, DOH has confirmed that it is not considering new applications at this time, nor is it considering amendments to LHCSA licenses, unless amendments are submitted on an emergency basis. This includes amendments to add a county to an existing LHCSA’s service area.

Applications submitted for LHCSAs serving ALPs are also not being considered at this time, as the ALP Certificate of Need (CON) process is currently being developed by DOH and an ALP LHCSA would go hand in hand with that approval process. DOH also confirmed that LHCSA applications serving populations within CCRCs, PACE, and NFPs are also not being considered at this time. Please let LeadingAge NY know if you have a LHCSA that you need approved for a CCRC, NFP, or PACE, as these do not require need review. The rationale for postponing ALP LHCSAs is understandable. However, LeadingAge NY may be able to make a case for DOH moving forward on a LHCSA serving residents in those other settings. This licensure process should open up as soon as DOH's internal review of the new application and need methodology is approved.

On the legislative front, members may be aware that a Medicaid LHCSA RFO requirement was established in last year’s budget to require existing LHCSAs to undergo an authorization process to provide Medicaid services. The requirement was created to help DOH consolidate the Medicaid LHCSA market, remove agencies not operating/active, and improve oversight of agencies. It would also create an arbitrary process for approval of Medicaid LHCSAs and real disruption to the sector, its providers, patients, and caregivers. The Department does not know when this RFO process will commence. The recent RFO process carried out by the State for fiscal intermediaries (FIs) (and established for similar reasons) was a tumultuous process. Many questioned the validity of the award process, and this year’s State Budget opened that RFO process back up for additional contracts.

The Legislature recently proposed new legislation, A.7304/S.6640, to repeal the LHCSA RFO requirement. LeadingAge NY is supporting this bill. You can find our memo of support, here.

LeadingAge NY will keep members updated on these issues. Please contact us if you have any questions or concerns.

Contact: Meg Everett, meverett@leadingageny.org, 518-929-9342