The Justice Department filed a lawsuit against New York officials and the company Public Partnerships LLC June 16 over alleged fraud involving Medicaid funds for a $10 billion home care program.
PPL is responsible for managing caregivers in the Consumer Directed Personal Assistance Program. As of fall 2024, CDPAP had more than 250,000 patients and 300,000 caregivers. The state of New York funds half of the program, and federal Medicaid dollars reimburse the other half, according to the complaint.
PPL proposed $68.50 per-member, per-month payments as its sole compensation throughout the contract, far below its proposal prior to the bidding process, the lawsuit said. But the Justice Department said PPL allegedly tried billing managed care organizations at higher per-hour direct care rates, violating its contract.
“I think this hourly rate game is going to become our hobby,” a PPL leader wrote in a 2024 email regarding the CDPAP strategy, the lawsuit said.
Managed care organizations reportedly informed the New York Department of Health that PPL sought billions in excess of what they thought was warranted, but the department did not act. The lawsuit claimed the department shut down other bids in favor of PPL’s, as well.
The complaint added that PPL’s bid included misrepresentations of its staffing plan, software quality and financial preparedness. The lawsuit also accused PPL of not disclosing pay rate information to caregivers until they were registered. The complaint alleged PPL and the New York Department of Health made false or misleading testimonies when facing concerns about PPL becoming the fiscal intermediary for the program.
“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 McDonald for the Justice Department’s National Fraud Enforcement Division.
According to the lawsuit, caregivers went underpaid, and patients had to seek care outside of their homes.
The lawsuit comes amid a broader federal anti-fraud push in government-sponsored programs. Both the department and PPL rejected the complaint’s characterization.
“This baseless complaint is the latest attempt by Washington Republicans to score political points at the expense of vulnerable New Yorkers. It is inexcusable and completely lacking in merit,” a New York Department of Health spokesperson told Becker’s. “The fact of the matter is this administration saved CDPAP from a fiscal crisis by removing hundreds of wasteful administrative middlemen. In the process, we reduced costs for state and federal taxpayers while protecting home care for those who need it. As the courts have confirmed, this was accomplished through a fair and legally sound competitive bidding process.”
A PPL spokesperson reiterated the company “was selected through a transparent, competitive process to strengthen and modernize New York’s CDPAP program.”
“We are proud of our work to deliver greater accountability, consistency and support for the hundreds of thousands of New Yorkers who rely on it. We remain committed to strong program oversight, financial accountability and operational efficiency to ensure taxpayer dollars are managed responsibly while supporting high-quality, consumer-directed care,” the statement said.
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