Cornell’s Worker Institute says private equity controls roughly half of New York’s home-care market, now consolidated and highly leveraged. PE-backed agencies collected more than $2.32 billion in Medicaid payments in 2022; debt service takes funds from care and wages.
The article says private-equity buyouts rely on roughly 70% debt, placed on acquired agencies rather than investors’ books. New York agencies owned by private-equity firms change hands about every five years on average. PPL, backed by DW Healthcare Partners and Linden Capital Partners, became sole administrator of the state’s $9 billion CDPAP program.
Proposed reforms include disclosure of providers’ ownership, debt, dividends and fees; caps on administrative overhead to direct more Medicaid money to care wages; and joint liability for sponsors over portfolio companies’ wage theft, safety violations and billing fraud. California and Oregon have laws allowing regulators to review, approve or block private-equity health-care deals before closing. In Massachusetts, the attorney general secured a $19.95 million settlement from H.I.G. Capital after establishing that its board representatives knew of and allowed fraudulent Medicaid billing by unlicensed staff at South Bay Mental Health Center.
