Department of Justice Files Suit to Stop Ongoing Medicaid Fraud Related to New York’s $10 Billion Home-Care Program

The Justice Department announced today that it has filed a lawsuit in the U.S. District Court for the Eastern District of New York against the State of New York Department of Health, New York State Medicaid Director Amir Bassiri, and Public Partnerships LLC (PPL), an Alpharetta, Georgia-based company that has managed New York's Consumer Directed Personal Assistant Program (CDPAP) since 2025.

"New York's backroom deal with PPL has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb," said Assistant Attorney General Colin M. McDonald for the Justice Department's National Fraud Enforcement Division. "Today's action is the latest reminder that the Justice Department is mobilizing every available tool to protect taxpayer-funded programs from fraud and corruption."

"One of the Justice Department's key priorities is protecting the public fisc and delivering savings to American taxpayers," said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division. "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. The Justice Department is acting to ensure that federal laws regarding truthful statements and fair dealing in federal health care programs are upheld and to prevent additional harm from being exacted against the public by Public Partnerships LLC and New York."

The lawsuit aims to stop an alleged fraud scheme by which PPL has generated millions of dollars in unauthorized profits funded by federal taxpayers in connection with its takeover of New York's $10 billion-dollar CDPAP program. The lawsuit alleges that the New York Department of Health awarded PPL the lucrative CDPAP contract after conducting a sham bid process, and then, despite learning of PPL's intent to deviate from the representations made in its bid and violate the financial terms of the contract, failed to take action to hold PPL accountable and to protect public funds from misuse, resulting in a fraud scheme that remains unchecked to this day. The lawsuit seeks to enjoin all defendants from making further misrepresentations about the CDPAP program and from charging American taxpayers millions of dollars unauthorized by the contract.

CDPAP is a Medicaid program that provides home care through lay caregivers to Medicaid patients with disabilities or significant medical needs. In spring 2024, the New York Legislature passed a statute that consolidated the management of CDPAP from hundreds of pre-existing "fiscal intermediaries" to a single fiscal intermediary, setting up one of the most lucrative contracts for administering a Medicaid program in the nation. The lawsuit alleges that although New York purported to conduct a fair bidding process to select the single fiscal intermediary during summer 2024, New York pre-selected PPL for the billion-dollar contract by conducting a sham bid process that resulted in PPL being awarded the contract in late 2024.

The lawsuit further alleges that PPL and New York repeatedly made knowing misrepresentations to the public concerning the date by which PPL's transition could be completed, intentionally concealing that, since the contract's inception, both PPL and New York were aware that the transition would likely not be complete by April 1, 2025 - the contractually designated transition date - and would result in severe disruptions to patient care and harm to patients across the state. Worse yet, PPL and New York, without explanation, have disregarded key limits the contract imposed on the revenues and profits PPL was entitled to receive under the contract - limits that were central to the goal of saving hundreds of millions of dollars through the CDPAP transition.

Instead of ensuring that PPL complied with the contract and protecting the American taxpayers, New York has permitted PPL to raid the CDPAP program of millions of dollars in excess revenues, billing at hourly rates in excess of those anticipated by New York prior to the contract award. As a result of PPL's self-dealing and New York's failure to require it to comply with the terms of the contract, the purported cost savings that the CDPAP transition was to provide largely have been erased. To date, New York and PPL repeatedly and willfully have misled the public and the New York Legislature concerning important aspects of the CDPAP transition, including, without limitation, the gross mismanagement of the program by PPL and New York.

This case was investigated by the Civil Division's Enforcement and Affirmative Litigation Branch. This case is being litigated by Assistant Director Patrick Runkle and Trial Attorneys Francisco Unger and Shimeng Zhang.