The Department of Justice filed a lawsuit Tuesday against New York health officials and the company overseeing the state’s multibillion-dollar home care initiative, alleging misconduct in the awarding and administration of the program.
Federal prosecutors named the New York State Department of Health, the state’s Medicaid director, and Public Partnerships LLC (PPL) in a complaint filed in federal court in Brooklyn. Prosecutors allege state officials predetermined the outcome of the bidding process and steered the contract to PPL despite concerns about the company’s proposal. The complaint further claims New York failed to intervene after learning PPL intended to deviate from commitments made during the procurement process.
“New York’s backroom deal with PPL has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb,” Assistant Attorney General Colin M. McDonald for the Justice Department’s National Fraud Enforcement Division said. “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,” Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said.
Shumate continued:
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 seeks court intervention to stop what federal prosecutors describe as widespread misconduct in the administration of New York’s $10 billion CDPAP program.
CDPAP is a Medicaid-funded initiative that enables individuals with disabilities or serious medical conditions to receive care from nonprofessional caregivers, including family members. In 2024, New York lawmakers approved a restructuring plan that replaced hundreds of intermediary administrators with a single statewide contractor.
The complaint also alleges that PPL generated millions of dollars in unauthorized profits by retaining a portion of Medicaid funds intended for direct care services. Federal prosecutors contend the company inflated billable rates after taking over the program and continued collecting payments that were not permitted under the contract.
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