U.S. Justice Department seeks to halt alleged fraud in New York home-care Medicaid contract

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Justice halts NY Medicaid fraud

Highlights

The U.S. Department of Justice filed suit against the New York State Department of Health, Bassiri, and Public Partnerships LLC, alleging millions in unauthorized profits from the Consumer Directed Personal Assistant Program contract.
The complaint asserts that New York's 2024 contract award to PPL followed a sham bidding process and concealed that PPL would not meet key financial and operational representations.
Excess billing and weak oversight, according to the Justice Department, have erased hundreds of millions in anticipated Medicaid savings, with delays risking statewide patient care disruptions.

Contract allegations and lawsuit scope

As reported by the U.S. Department of Justice, the department has filed suit in the U.S. District Court for the Eastern District of New York against the New York State Department of Health, Bassiri and Public Partnerships LLC, which has managed the Consumer Directed Personal Assistant Program since 2025.

The government says the lawsuit is intended to stop a scheme through which PPL has generated millions of dollars in unauthorized profits funded by federal taxpayers after taking over the program. It alleges New York awarded the contract after a sham bidding process, then failed to act after learning that PPL intended to depart from representations made in its bid and from the contract’s financial terms.

The suit seeks an injunction barring the defendants from making further misrepresentations about the program and from charging taxpayers millions of dollars not authorized under the contract. Justice Department officials say the case is part of a broader push to protect taxpayer-funded healthcare programs from fraud and misuse.

Program transition and financial impact

CDPAP is a Medicaid home-care program that allows lay caregivers to assist patients with disabilities or significant medical needs. The New York Legislature passed a statute in spring 2024 to consolidate program management from hundreds of fiscal intermediaries into a single operator, creating one of the largest Medicaid administrative contracts in the country.

The lawsuit alleges that although the state presented the summer 2024 bidding process as fair, PPL had already been preselected before receiving the contract in late 2024. It also claims New York and PPL knowingly misled the public about whether the transition could be completed by April 1, 2025, despite understanding that the deadline likely would not be met and that delays could disrupt patient care statewide.

According to the complaint, PPL and New York also disregarded contractual limits on revenue and profit that were meant to help generate hundreds of millions of dollars in savings from the transition. The Justice Department says excess billing and weak oversight have erased much of those expected savings, while the public and state lawmakers remain misled about the scale of operational problems in the program.

In our earlier coverage of the widening U.S. federal deficit through May FY2026, we outlined how spending continues to outpace revenue despite a modest year-over-year improvement in the cumulative shortfall. We also noted that the scale of federal outlays and projected deficits keeps pressure on Washington to tighten oversight and curb waste across taxpayer-funded programs.

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