OPWDD is in the midst of developing a new rate methodology, which will have significant implications for voluntary provider agencies for years to come. Agencies have been engaging with OPWDD and other stakeholders during this process on the technical aspects of the rate redesign. The overall objective is to reform the reimbursement rate from a cost-based methodology to an acuity-based methodology.  

However, provider agencies have expressed concerns about the potential outcome of the final rate methodology, which may result in significant long-term losses for provider agencies statewide. Agencies that have already invested in direct care wages above the regional average, will be penalized due to the proposed regional cost approach. 

The Coordinated Assessment System (CAS) will be used to determine the relative acuity of a person, which in turn determines how much an agency must be reimbursed for supporting that person. However, it is not clear whether the CAS has the functionality to appropriately identify the level of support required for a person, leaving open the possibility of people being placed into lower tier classifications that do not reflect the level of staffing required, and improperly reimbursing providers at a lower rate.   

A decade ago, the State shifted rate-setting authority for I/DD services from the Office for People with Developmental Disabilities (OPWDD) to the Department of Health (DOH). This change has resulted in a rate-setting process that is slow, unpredictable, and inefficient, leaving many non-profit agencies in precarious financial positions. For example, new rates were established on July 1, 2024 but were not finalized until six months later on December 31, 2024. This has caused hardships for providers who base their budgets, salary increases, and operations on these new rates, forcing them to tap into limited reserves and lines of credit as a bridge until the new rates can be finalized and applied.  

As noted in the January 2025 NYS Comptroller’s report, The Critical Role of Nonprofits in New York, “When contracts are not timely executed and/or payments for services are delayed, nonprofits may face difficult choices: decrease the services they provide, defer paying or hiring staff, or even laying off staff. They may also be subject to cash flow burdens—relying on loans or lines of credit to make existing payroll or other expenses, incurring costs for which they are not reimbursed delayed state contracts and payments hinder nonprofit operations and disrupt services to New Yorkers that rely on them.”2 Therefore, any new rates or cost-of-living increases much be applied in a timely manner to ensure the stability of providers.