An analysis by The New York Times of state inspection data from 2004 to 2010 found that the federation had been cited 27 times; most providers of similar size were cited no more than twice.
Like a spouse trapped in a bad marriage, however, the state never sought to extricate itself. It continues to pay the federation about $20 million a year in Medicaid money.
The relationship underscores the degree to which New York State has given control of its system to nonprofit providers, who receive more than $5 billion a year in Medicaid money to house and care for developmentally disabled people.
The problem stems from hasty decisions made four decades ago, when New York faced a court order to stop warehousing developmentally disabled people in huge institutions. The state turned to then-small nonprofit groups, many led by parents of developmentally disabled children, to open group homes quickly.
State officials saw the groups as allies, in need of support more than supervision. And as the organizations matured into multimillion-dollar enterprises, the state’s oversight system did not keep pace.
As a result, from the 1970s until this fall, the nonprofit providers, unlike nursing homes or hospitals, never faced fines when their care was found lacking. The state conducts inspections of their facilities, but the visits are rarely a surprise and are intended to be a collaborative learning experience.