NYAPRS Note: Over the past week, a stream of statewide and local groups representing hundreds of extremely hard pressed NY human service nonprofits converged on Albany to press for a 3% across the board increase for each of the next 5 years. Upwards of 550 NYAPRS members wearing ‘3 for 5’ hats were among them, out in full force across the Capital and Legislative Office Building. Be on the lookout for alerts around a number of other such rallies and actions we during March, the last month before the budget is due to be approved.
Cash-Strapped Nonprofits Serving People With Disabilities Make Case For Higher Payments
Crain’s Health Pulse February 28, 2020
A coalition of nonprofits that serve people with developmental disabilities say seven of their 12 members lost money last year, and they need the state to increase their payments to keep up with rising costs.
The New York Integrated Network said the median operating margin among the 12 agencies was below 2% during the past five years.
The group, which mostly relies on Medicaid for reimbursement, is pushing for the governor and state Legislature to approve a 3% increase in funding for each of the next five years (NYAPRS clarification) as part of the upcoming state budget.
“The major cause is that the field has not had a cost-of-living increase for nine years, even though the cost of care has gone up a lot,” said Arthur Webb, a health care consultant who is acting as executive director of NYIN. Webb served as commissioner of the predecessor agency to the state Office for People with Developmental Disabilities in the 1980s.
Webb produced the report along with investment bank Prager & Co., which has created a financial dashboard for the nonprofits.
The funding request comes in a year when the state is looking to shed $2.5 billion from its Medicaid budget, convening a redesign team to devise a savings plan. That group is scheduled to meet Monday in Manhattan.
The agencies that make up NYIN include some of the city’s largest human services nonprofits. They range in annual budget from $9.4 million to $239.4 million and bring in more than $700 million per year in programs related to developmental disabilities.
Philanthropy has not offset the meager payment increases the nonprofits have received from the state, Webb said.
Some of the agencies have looked to mergers and acquisitions to try to reduce costs. Services for the Underserved acquired Palladia, an antipoverty nonprofit that offered behavioral health and housing services, and HeartShare acquired St. Vincent’s Services in 2014. Cerebral Palsy Associations of New York State, now called CP Unlimited, acquired the housing and day programs of Catholic Charities Neighborhood Services in 2016.
Beyond deals, some of the nonprofits are looking to refinance their debt to take advantage of lower interest rates, particularly as the 12 agencies operate a combined 2,200 housing facilities.
“Just the basic maintenance every year consumes a considerable amount of dollars,” Webb said. “That has been a real challenge.” —Jonathan LaMantia