Justice Department Sues Over New York's $10B Medicaid Home-Care Program

The Justice Department sued New York’s health department and one of its largest Medicaid contractors on June 16, alleging a rigged bidding process let a private company drain millions from a $10 billion home-care program meant to serve disabled and medically fragile patients.

What You Should Know

The lawsuit, filed in the Eastern District of New York, names the state Department of Health, Medicaid Director Amir Bassiri, and Public Partnerships LLC, the company that has managed New York’s Consumer Directed Personal Assistance Program since 2025, according to the Justice Department’s press release. The complaint alleges New York conducted a “sham bid process” in 2024 that pre-selected PPL for the contract.

The System Under Pressure

CDPAP provides home care through lay caregivers to Medicaid patients with disabilities or significant medical needs. The lawsuit alleges PPL and New York both knew the company’s transition would likely miss its April 1, 2025, deadline, and proceeded anyway, causing what the complaint describes as “severe disruptions to patient care.” The suit further alleges PPL ignored contract limits on its revenue, billing at rates higher than New York had anticipated.

The Receipts

“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 of the Justice Department’s National Fraud Enforcement Division, according to the DOJ release. Assistant Attorney General Brett Shumate added that New York’s “failure to police a favored vendor” had “betrayed” the public trust.”

What Happens Next

The lawsuit seeks to stop further misrepresentations about the program and to bar PPL and New York from continuing to charge taxpayers beyond what the contract authorized. The case now moves into litigation in federal court, where New York and PPL will have the opportunity to respond to the allegations.

References: Department of Justice