Adult Daycares: Unregulated and High Profit

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No one had really heard of “adult day care centers” before they emerged at the center of a bribery scandal involving a Bronx Assemblyman.  But as it turns out, a recent change in state regulations means the centers have become a potentially lucrative enterprise for their operators – and with almost no oversight.  It’s no wonder they are at the center of a bribery scandal.

Warren Chan runs an adult daycare on 18th Avenue in Bensonhurst, Brooklyn.  On a recent afternoon, seniors played a lively game of ping pong while a small group of elderly Asian men and women concentrated on their mahjong game nearby. One or two seniors nodded off in front of a big screen television and in a back room a handful of men were learning to use their iPads.

But despite the activity, Chan said enrollment in his adult daycare had dropped sharply.  “So right now it’s about 15 to 20 per day. It used to be about 80 to 90,” he said.

The adult daycare operator blamed the drop on new competitors who, he said, were luring his seniors away by offering them supermarket coupons and cash.

“And they tell them, ‘it’s ok to take them’.  ‘You’re not going to get in trouble for it because these are money from the government that’s entitled to you.’” Which, Chan said, isn’t true.

But there’s a financial incentive for the centers to enroll as many seniors as they can.   

It used to be Medicaid would only reimburse adult day cares for a specific group of individuals. That changed when Governor Andrew Cuomo overhauled the medical insurance program for the poor and turned it into a managed care system. Now private insurance companies will reimburse adult daycare centers around $70 a day per adult for a much broader population.  The thinking – it would keep seniors out of more expensive forms of care, like nursing homes. 

Advocates said that’s what’s causing the fierce competition for Medicaid eligible seniors.  
Susan Dooha, Director of Center for Independence of the Disabled in New York, said the change in the Medicaid system was creating a, “wild west environment” for business owners who are more concerned with their bottom lines – and less with caring for the elderly.

The state’s Department for the Aging puts out guidelines for adult daycares that provide mostly social activities but said it only monitors centers it contracts with and isn’t responsible for the rest. The Department of Health, the agency in charge of distributing Medicaid funds, said private insurance companies should be making sure the services they are paying for are appropriate.  But at least one private insurance company said regulating an adult daycare is not their job.

Private insurance companies are reimbursed a set amount for each Medicaid recipient they enroll. Dooha says that creates an incentive for insurance companies to enroll healthier individuals.

“So if you’re getting $3000 for someone who costs you $500 you’re going to make money,” said Dooha.  

To be eligible for adult daycare, a senior should typically need help with at least one daily living activity such as toileting or feeding themselves. Those with dementia may also need supervision and qualify for the care.

But at the AMICO Senior Center in Brooklyn, Director Joan Pastore said adult daycares are recruiting active, healthy people.

At the three story senior center, some seniors ate lunch, while others played mahjong, ping pong or shot pool.  The biggest draw though, was the dance hall on the second floor, where dressed up older men and women spun each other around.  A dj played everything from Polish Mazurkas to pop music. Pastore said that at one point, an adult daycare was sending a white van over and shuttling seniors away.

“Their outreach is getting quite aggressive,” Pastore said.  “And I say exploitive that they’re just picking up older adults, ‘come free food, free this, free that’.”  The seniors say they’re told to show up, with their “white cards,” or Medicaid cards.

The tactics were irksome to Joan Pastore, the senior center director. She said programs like hers that regularly see their government funding cut have to submit to several monitors while these so called social adult daycares freely receive Medicaid funds and no one monitors them.

“That’s the problem.  There are no regulations put in place,” Pastore complained.  “Senior centers, again for the well elderly, are a lot more heavily monitored because we get government dollars and the same should be in place. Someone needs to check are these folks really in need to be in an adult daycare center. What kind of services are they receiving?”