Authored by Aldgra Fredly via The Epoch Times,

The U.S. Department of Justice (DOJ) on June 16 sued New York health officials and a Georgia-based company over an alleged fraud scheme involving the state’s $10 billion Medicaid homecare program.

The lawsuit names state Health Commissioner James McDonald, state Medicaid Director Amir Bassiri, and financial management services company Public Partnerships LLC as defendants.

In its lawsuit, the DOJ asked the court to issue an injunction barring the defendants from making “false statements and misrepresentations” about New York’s Consumer Directed Personal Assistant Program (CDPAP) and prevent what it called the company’s “siphoning of funds from the federal coffers.”

“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,” Assistant Attorney General Brett Shumate of the DOJ’s Civil Division said in a statement.

CDPAP is one of New York’s largest health benefit programs. It provides home care through lay caregivers to Medicaid patients with disabilities or significant medical needs.

The lawsuit states that more than 250,000 patients and more than 300,000 caregivers participated in the program as of 2024. That same year, the New York Legislature passed a statute consolidating management of CDPAP from hundreds of existing fiscal intermediaries to a single fiscal intermediary.

The DOJ alleged that the New York Health Department awarded Public Partnerships the contract to manage CDPAP through a “sham bid process” in late 2024.

The Justice Department accused Bassiri of being part ​of an effort to disqualify other qualified bidders after he had “personally scored” Public Partnerships’ successful bid.

According to the complaint, Bassiri was part of last-minute email exchanges with other states, in which Health Department officials said they were “under some sort of ‘pressure from our Governor’s Office’” to see if other bidders were qualified.

The DOJ accused the state health department of enabling the company to generate “millions of dollars in excess revenues” from the program by “billing at hourly rates in excess of those anticipated by New York prior to the contract award.”

The department said that Public Partnerships’ self-dealing and New York’s failure to enforce the contract’s terms erased the cost savings the program’s transition was expected to deliver.

“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 McDonald for the DOJ’s National Fraud Enforcement Division said in the statement.

Public Partnerships has denied the allegations. The company said in a statement to multiple news outlets that it won the contract “through a transparent, competitive process.”

“We strongly disagree with the characterizations in the complaint and will respond fully through the appropriate legal process,” the company said.

In a statement, the New York Department of Health called the lawsuit baseless and lacking merit.

The department said the courts have confirmed that the process of hiring Public Partnerships “was accomplished through a fair and legally sound competitive bidding process.”

It added: “We look forward to the day where these disingenuous attacks can stop and our partners in Washington can look to New York as a model for how to improve to control costs and root out abuses while preserving and improving quality of care.”

A spokesperson for New York Gov. Kathy ​Hochul said, “New York’s decision to move to a single fiscal intermediary has already saved taxpayers more than $1 billion while deterring ‌fraud, ⁠waste and abuse.”

Hochul is not a defendant and was not accused of wrongdoing.

The Epoch Times reached out to both McDonald and Bassiri for comment but did not receive a response by publication time.