State planned to give no-bid contract to PPL, lawmaker claims

State Sen. James Skoufis shared proposed draft language that would have provided Public Partnerships LLC with a no-bid contract to take over a popular home care program in the state during a testy hearing on the transition Thursday. But leaders from both the state Department of Health and PPL denied any knowledge of the initial proposal to hand the out-of-state company a $9 billion contract without a competitive bidding process. 

Questions to state Health Commissioner James McDonald and PPL Vice President of Government Relations Patty Byrnes over the draft proposal were just one example of the heated exchanges that took place during the hearing to examine the troubled transition of the Consumer Directed Personal Assistance Program. After over four hours of grilling the pair, many legislators were frustrated with the answers – or lack thereof – provided about the shift from nearly 700 fiscal intermediaries processing Medicaid payments to just one.

Skoufis, chair of the state Senate Investigations Committee, shared draft legislative language that would have compelled the state to contract with PPL: “No later than March 31, 2025 the department of health, through the commissioner, shall partner with Public Partnerships, LLC ("Statewide FI") to provide on a statewide basis the services of a fiscal intermediary” 

At the time, PPL was reportedly already widely expected to take over CDPAP. In the end, the requirements for a company to become the statewide fiscal intermediary were written in such a way that PPL was one of only four companies to even qualify for the contract, out of more than 130 companies that placed a bid.

On Thursday, McDonald said he had no knowledge of the proposal that supposedly came from the governor and denied any advanced communication between DOH staff and PPL. “I would hope you would have better knowledge of why this language is in there than I would because you're lawmakers,” he told legislators.

Byrnes similarly said no one from the governor's office contacted PPL about the proposal, insisting she was as shocked as anyone to learn about it. Skoufis called the prospect that the company had no inkling it may have gotten a no-bid contract “astonishing.”

A spokesperson for Gov. Kathy Hochul did not directly address the draft bill language when asked, but defended the transition and the procurement process for PPL. “Following the law passed by the State Legislature, New York's shift to a single fiscal intermediary went through a standard procurement process at DOH – and no State officials knew who would be selected until the procurement process was complete,” spokesperson Sam Spokony said in a statement. “The bottom line here is that New York saved CDPAP from a fiscal crisis by removing hundreds of wasteful administrative middlemen.”

Senate Health Committee Chair Sen. Gustavo Rivera, who co-led the joint hearing with Skoufis, and other lawmakers expressed incredulity at various points while questioning both the state and PPL officials. “It is more than a little frustrating that there are many of these questions that, in honesty sir, with respect, you should have answers to,” Rivera said to McDonald near the start of the hearing.

Rivera’s frustrations boiled over during his second round of questions to McDonald when the health commissioner denied knowledge of consumers encountering language barrier issues when calling PPL. “I’m not even sure if I want to go on asking questions and questions because I’m not sure how useful this has been,” Rivera said. “This is incredibly disappointing … And we’re not asking for anything crazy.”

Even PPL’s choice of representative left legislators wanting. The company’s CEO, president and CFO all stepped down after the hearing was announced but before it took place, and none of its new leadership team attended the hearing on Thursday. Byrnes, the vice president of government relations, said the invite was addressed to her, which did nothing to soothe the ire of lawmakers. “(That) the CEO thought they were not invited because they were not named is unacceptable and really ridiculous,” said state Sen. Cordell Cleare. “They should have been here today. This is critical and very important, and it's just like the tone of everything today has been condescending.” 

Notably absent from the lineup of speakers was a representative from the governor’s office, even though budget director Blake Washington penned an op-ed Thursday morning defending the CDPAP transition. “The expectation was that the (health) commissioner was going to be able to speak effectively on behalf of the executive branch,” Skoufis told reporters. “He clearly was unable to do that or unwilling to do that today.”

Skoufis said that when it came to the first four hours of testimony, “80% of it was a complete waste of our time,” adding that he expected McDonald and Byrnes to have at least answered more of the questions. Both he and Rivera said that they have no plans to put the matter to bed. “You can be sure that this is not the end of the conversation with the first two panelists,” Skoufis said.