OPWDD’s Former Agency Head Overlooked Potential Conflicts of Interest Amid Care Coordination Organization Transition

The New York State Inspector General’s Office today released its report and findings regarding the New York State Office for People With Developmental Disabilities’ (OPWDD) and the State Department of Health’s (DOH) care coordination organizations (CCOs) in the State’s health home program.  

The investigation found instances where key players neglected to address potential conflicts of interest in setting up the program to enhance care for individuals with intellectual and developmental disabilities. The Inspector General found no definitive evidence to support allegations that the individuals’ roles improperly influenced the process or designations of CCOs. Nor was there any evidence to support the allegation that OPWDD leadership structured managed care policies for their own benefit.  

The report, the result of a comprehensive investigation of complaints submitted in September 2020 by OPWDD’S Commissioner Theodore Kastner, M.D., examined aspects of the State’s transition to a managed care system for individuals with intellectual and developmental disabilities. Specifically, Kastner alleged: 

In 2016, Michael Mascari, a former part-time advisor to Kastner’s predecessor, Kerry Delaney, manipulated the procurement of CCOs and the rate setting process to maximize CCO profitability.  

Mascari and Delaney misrepresented CCO start-up costs as administrative fees in claims to the Centers for Medicare & Medicaid Services (CMS). 

Mascari, also the chair of Partners Health Plan, Inc. (PHP), rewarded Delaney for her complicity by offering her employment with his company as its CEO, which Delaney accepted. 

Overall, the investigation determined that Kastner’s allegations were often based on mistaken assumptions, a misunderstanding of the mechanism used to select CCO/Health Homes (HH) applicants, and/or reflected differences of opinion on the State’s policy to transition impacted individuals to managed care. The Inspector General’s investigation found that the substantive decisions in the State’s transition to managed care for individuals with developmental disabilities were consistent with the State’s long-standing managed care policy goals and were subject to approval by Delaney, outside state and federal agencies, and/or the Executive Chamber.  

However, the Inspector General found several instances where OPWDD and specific individuals should have sought and obtained proper ethical guidance from either the agency’s ethics officer and/or the Joint Commission on Public Ethics (JCOPE) before taking specific actions.  

At the heart of the investigation is whether Mascari was considered a State employee—and therefore subject to New York State’s Code of Ethics found in the Public Officers Law—or whether he was considered a consultant and therefore not subject to such requirements. This discrepancy creates an apparent loophole where contractors or consultants doing business with the State may be able to circumvent measures designed to ensure public accountability. 

“This comprehensive investigation found intertwined relationships, potential conflicts of interest, and the misuse of ethics loopholes by OPWDD’s prior leadership,” said acting Inspector General Robyn Adair. “There were missed opportunities by OPWDD to memorialize and ensure important integrity checks-and-balances were in place. New York State government should be vigilant in recognizing potential conflicts of interest and in taking the necessary steps to remedy any such issues.”  

Between 2012 and 2018, New York State established Health Homes – groups of healthcare and service providers working together – to ensure care for disabled individuals in a managed care structure. Health Homes receive a per-member, per-month payment for services. CCOs are specialized Health Homes that work with individuals with developmental disabilities and their families to coordinate services. 

The investigation found Mascari’s employment status with the Research Foundation for Mental Hygiene, Inc (RFMH) – a “closely affiliated entity” – was unclear:  

If Mascari was hired as a part-time consultant by RFMH and not a full-time State employee, Mascari would not be subject to the New York State’s conflict of interest provisions in the Public Officers Law. He was retained for a fixed period and did not receive benefits provided to State employees, including sick leave, health insurance and ability to participate in the State’s retirement system. 

However, Mascari’s hiring by RFMH appeared to make him an employee of that organization, as he received W-2 and I-9 Forms to report compensation, instead of a 1099-MISC Form, which is used to report compensation for contractors/nonemployees. He also completed an RFMH Employee Appointment Form and received an employee manual. In response to a question from the Inspector General about Mascari’s employment status, RFMH’s director of human resources stated that he was an employee. As an employee of RFMH, which is considered a “closely affiliated entity” in state law, Mascari would then indeed be a public officer bound by the Public Officers Law and the State’s Code of Ethics – and subject to the jurisdiction of JCOPE. 

The Inspector General found that RFMH and OPWDD should have taken more care in assessing Mascari’s employment status and mitigating potential conflicts of interest.  

The investigation found that in as early as February 2018, Mascari and Delaney – using State email – began to discuss Delaney’s future employment with PHP. Under Public Officers Law, Mascari’s solicitation should have prompted Delaney to consult the OPWDD ethics officer to determine whether she should be recused from further work on the CCO/HH program. Additionally, Mascari’s recruitment of Delaney should not have been conducted during State time and using State resources. His actions further underscored the importance of a consultation from either the agency ethics officer and/or JCOPE.  

While Delaney ultimately requested and received an informal advisory opinion on the matter from JCOPE, she only sought an opinion regarding potential post-employment conflicts of interest and did not seek an opinion regarding any current conflicts she might have with respect to PHP.  

The Inspector General would typically refer such ethical issues to JCOPE for its review. However, as Delaney left State service on January 1, 2019, JCOPE’s jurisdiction over Delaney expired on January 1, 2020. The matter was referred to the Inspector General’s Office in September 2020. 

The Inspector General’s Report, “Investigation of Alleged Irregularities Involving Care Coordination Organizations in the State’s Health Home Program at the New York State Office for People With Developmental Disabilities and the Department of Health“ is online.