DOJ sues New York over alleged ‘fraud scheme’ linked to home healthcare

The U.S. Department of Justice (DOJ) has filed a lawsuit against the New York State Department of Health, alleging that the state’s Medicaid program, and one of its contractors, are engaged in a $10 billion fraud scheme related to home healthcare delivery. 

In a complaint filed with a U.S. District Court, the federal government accused Public Partnerships—a private, for-profit group that manages state Medicaid programs—of skimming profits from each hour of care it billed on behalf of providers delivering home health services to patients.

These profits were “unauthorized,” the DOJ confirmed. Further, authorities allege that Public Partnerships is not equipped to manage New York’s Consumer Directed Personal Assistance Program (CDPAP), which determines which patients require in-home care and how reimbursement is issued, based on the needs of disabled Medicaid beneficiaries.  

The company has taken over the management of CDPAP, but the DOJ said it did so by making false statements to deceive the state. Further, the agency stated that the New York Department of Health failed to do its due diligence, conducting a “sham bid” process for the takeover of CDPAP, driven by Public Partnerships' promise to bring savings. 

Even as Public Partnerships failed in delivering on its promise, the state health department failed to act to hold the company accountable for its “gross mismanagement” of federal Medicaid funds, the DOJ alleged in its lawsuit. 

“New York’s failure to police a favored vendor that unlawfully siphoned millions of dollars of Medicaid funding is egregious and betrays the public trust,” Assistant Attorney General Brett Shumat said in a statement. “The DOJ is acting to ensure that federal laws regarding truthful statements and fair dealing in federal health care programs are upheld.”