The U.S. Department of Justice announced a federal lawsuit Tuesday against New York State, Public Partnerships LLC and other key players in an embattled home care contract for an “alleged fraud scheme.”
In 2024, New York abruptly announced the state would move from over 600 companies administering the state’s largest Medicaid-funded home care program to only one. The selection of Public Partnerships LLC, or PPL, and the following contract, transition of services, continued access to services for consumers with disabilities, and communications from the parties is the focus of the DOJ’s suit.
“The scheme has caused and continues to cause substantial harm to many thousands of vulnerable home-care Medicaid patients and caregivers, to small- and medium-sized New York businesses who were put out of business, and to the American taxpayer who ultimately is footing the bill,” the lawsuit reads.
The Medicaid-funded Consumer Directed Personal Assistance Program, or CDPAP, allows people with disabilities to hire, train and self-direct people they know to provide care, who are paid through a fiscal intermediary, or FI. According to the lawsuit, in 2024 the program had over 250,000 disabled people enrolled and over 300,000 workers, making it “one of New York’s largest health benefit programs.”
“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,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division in a press release. “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.”
The DOJ alleges “PPL was preselected as the winner through a sham bid process” and that PPL misrepresented its abilities, including to take over “on the contractually imposed timeline,” in its bid. It is also alleged that PPL falsified its bid submissions to “hide the profits it intended to make from a federal health care benefit program,” and misrepresented several aspects of PPL’s business, including their PPL@Home website, financial resources, plans to hire customer support workers and the company’s history in other states.
Other allegations against PPL include making “false or misleading statements” about: “pre-bid award communications” with the state, progress of the transition and how it is impacting consumers to both the public and the state, and regarding pay and benefits to workers before they were already enrolled with PPL.
The New York State Health Department, as well as its Commissioner Dr. James McDonald and state Medicaid Director Amir Bassiri are also named in the suit. The DOJ alleges the department of health and its employees also made “false and misleading statements and material omissions,” including to program participants, elected officials and the public about the progress and impact of the transition on consumers and workers.
The DOJ also claims there were also “false and misleading statements or omissions” regarding “financial structure of the bid and contract, and making or using materially false writings or documents with knowledge as to their falsity” and about the bid process.
“Specifically, DOH has represented that the bid process was fair and competitive, when it knows that the bid process was skewed in PPL’s favor from the beginning,” the lawsuit reads. “DOH also represented that there was no ‘improper influence’ during the bidding period, while leaving out the fact that Defendant BASSIRI himself had vetted PPL as the presumptive sole FI prior to the bidding period even commencing.”
BTPM NPR and public broadcast partners in the New York Public News Network reached out to New York Governor Kathy Hochul, the New York State Department of Health and PPL for comment. All three pushed back on the accusations, with both the governor's office and the department of health calling the legal action a political attack. (Full statements from the DOH and PPL may be seen below.)
A spokesperson for Governor Hochul, who has been in office since 2021, told NYPNN's Samuel King “this is just another sad attempt by the Trump administration to weaponize the justice system to attack political opponents in an election year.”
“New York’s decision to move to a single fiscal intermediary has already saved taxpayers more than a billion dollars while deterring fraud, waste and abuse,” the governor's spokesperson said. “As many courts have already held, the transition to a single fiscal intermediary was lawful and appropriate. We are confident the facts are on our side."
“This baseless complaint is the latest attempt by Washington Republicans to score political points at the expense of vulnerable New Yorkers," a spokesperson for the New York State Department of Health said via email. "It is inexcusable and completely lacking in merit. The fact of the matter is this administration saved CDPAP from a fiscal crisis by removing hundreds of wasteful administrative middlemen."
PPL shared in a statement with BTPM NPR that the company stands by their work in New York.
"We strongly disagree with the characterizations in the complaint and will respond fully through the appropriate legal process," the company said in a statement. "Public Partnerships LLC (PPL) was selected through a transparent, competitive process to strengthen and modernize New York’s CDPAP program, and 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."
However, the political director of Caring Majority, an organization representing home care consumers and their workers, argues the state laid out "the red carpet" for this federal action.
"It is absolutely a political attack, and had the governor been acting above board and doing everything she could to protect Medicaid and protect the New Yorkers who use Medicaid, there would be no grounds for this suit," Ilana Berger, from Caring Majority, told BTPM NPR by phone on Tuesday. "The Trump administration is going to look for anything to go after our Medicaid program and the governor's corrupt, wrong actions with this PPL situation have laid out the, basically the red carpet, for the Trump administration to come in and claim fraud."
PPL and New York state have faced significant pushback, questioning and criticism, from elected officials, advocates and program members. The DOJ’s lawsuit is also not the first lawsuit filed with regards to the program transition.
In an exclusive interview with BTPM NPR addressing consumer concerns in April 2025, then-PPL president Maria Perrin disputed the notion that the transition had been “flawed.”
“I don't know that I'm in agreement that there is a flawed implementation. I would say every implementation contains a lot of change, and that's hard," Perrin said.
Below are the full statements provided to BTPM NPR and NYPNN from the defendants:
New York State Department of Health: “This baseless complaint is the latest attempt by Washington Republicans to score political points at the expense of vulnerable New Yorkers," a statement from New York State Department of Health, provided to BTPM NPR reads. "It is inexcusable and completely lacking in merit. 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. 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.”
Public Partnerships LLC: "We strongly disagree with the characterizations in the complaint and will respond fully through the appropriate legal process. Public Partnerships LLC (PPL) was selected through a transparent, competitive process to strengthen and modernize New York’s CDPAP program, and 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.
PPL was entrusted to serve more than 250,000 New Yorkers who depend on consumer directed home care for their daily lives, and the hundreds of thousands of caregivers who provide that care. That mission drives every decision we make and remains our focus today. We have worked alongside the New York State Department of Health throughout the transition and at every step cooperated transparently with our state partners. We are proud of what we have achieved with the State of New York and stand by our performance."
