Morning Read: Are non-profits that help disabled bilking NY taxpayers?
The New York Times is running a major expose this morning that suggests that some non-profits in New York state are running up huge budgets thanks to state Medicaid payments, paying staff-members low wages but charging the state big bucks.
For their work, which requires no special credentials, the employees typically earn $10 to $15 an hour.
But when the nonprofit organizations that employ those workers bill the state, they collect three and four times that amount — with some having received as much as $67 an hour.
Spending on this little-known home care program, called Community Habilitation, has soared in recent years, creating multimillion-dollar surpluses at some nonprofit agencies and eye-popping salaries and benefits for those who run them.
And it helps explain how New York’s costs of caring for developmentally disabled people have ballooned in recent years, creating the nation’s most generous system of Medicaid-financed programs, with little scrutiny of its efficiency or results.
Soaring Medicaid costs have emerged as a major concern for local governments in the North Country. The issue of care for the disabled has also been an issue because of scandals at the Sunmount facility in Tupper Lake.
Tags: criminal justice, health, politics
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I have always thought the terms “non-profit” and “not for profit” are scams if anyone in them makes more than $50,000.
To me they are all businesses that make a profit, at least for the top dogs, and should be treated as such.
I don’t think it’s outrageous for upper management of some of these organizations to make $50K or more per year. Especially since some are required to have a Masters degree as a minimum qualification and oversee dozens of personnel, create and manage budgets, deal with community boards, country legislatures, etc.
That said, it’s certainly inappropriate to vastly over bill Medicaid for wages that far exceed what the agency is actually paying those who work directly with the clients. Such practices should be illegal.
Billing at a rate 3x what the workers get paid is not outlandish. Overhead, health insurance, etc add to a person’s base salary. Professional consultants (attorneys, engineers, etc) use this all the time.
The first paragraph seems to be waging a bit of class warfare there. Isn’t it a Good thing that people can earn that without a college degree?
“I have always thought the terms “non-profit” and “not for profit” are scams if anyone in them makes more than $50,000.”
Pete that is ridiculous. We would certainly not have the best higher-education system in the world if we had to follow this rule.
How much do the administrators make and how big are their expense accounts?
With regard to benefits, most nonprofits do not offer health insurance and retirement benefits as generous as local and state governments.
The problem everyone is that they are not good at what they do but are very good at getting paid.
I know it’s all too easy to waste and spend tax payer monies but you would think NY State would have discovered this and not the NYT.
The issue is fraud.
Do the bill at the rates allowed or not?
That is a separate issue from administration compensation at not for profits who are supposed to help the poor and disabled. Part of the issue is not for profits that are totally dependent on government funding, essentially they are not independent, they are an arm of the government, just another government subcontractor no different from Lockheed Martin or any other government contractor.
I work for a charity in SLC in administration. The average Executive director salary is between 45-75 for most serving lower income populations, this is not an outlandish salary and nationwide it is on the far low end. I think there are a couple of executive directors who might make up closer to 90k, but anyway no one is getting rich.
Now I have met some of the larger not for profit leaders downstate, some of them frankly are making too much in my opinion, 200K plus for supposedly helping the poor.
Of course if you want to include hospitals and colleges then all bets are off. I think the President of SLU for example makes around 350K the old president had payouts of over 700K in one year; at this “not for profit” University. So it all depends on the field.
There no doubt are some organizations that have exploited the system of care for vulnerable people. However, there is also a significant list of providers who have been charged with Medicaid and Medicare fraud and cannot practice in NYS.
Many agencies that pay that $10-15 pay scale have been working hard to maintain employee benefits, including employer provided health care. That has taken up a huge chunk of agency budgets.
To me as long as someone is making money, it is not a “not for profit.”
Taking this a step further, I think all organizations no matter what they call themselves should be subject to paying property taxes.
And by the way, I do include the government as a not for profit agency, also apparently run by a bunch of over paid incompetents.
Pete says “as long as someone is making money, it is not a “not for profit.”
But Pete, the _institution_ isn’t “making money”– it isn’t showing a profit. The problem is that some “non-profits” pay outsized salaries to their upper management (and in the case of colleges and universities, their super-star academics).
“…the government [is] run by a bunch of over paid incompetents.” It’s WAY more complicated than that! I think that if you studied government offices broadly, you would find a pretty high proportion of smart, hard-working people (some of whom are underpaid), and a minority of incompetents. The trouble is that A) the incompetents can wreak a lot of havoc in people’s lives, and B) some of the hard-working people are working hard at protecting their turf rather than at doing what needs to be done.