Feds say NY home caregiver program used slanted bidding scheme

BROOKLYN (CN) — The federal government sued New York health officials Tuesday accusing the state Department of Health of costing taxpayers millions of dollars by favoring a Georgia-based vendor in its bidding process for a Medicaid home care program.

The Health Department denies the fraud accusation and says the selection process was fair and legally sound, noting that a state appellate court upheld it late last year.

New York’s Consumer Directed Personal Assistant Program facilitates at-home care for Medicaid patients with disabilities or significant medical needs administered by lay caregivers, or “personal assistants,” often a family member or friend. They perform services normally done by a home health aide or nurse.

In 2024 the Legislature voted to consolidate the program’s management to a single vendor, and after a bidding process, an Alpharetta, Georgia-based company called Public Partnerships LLC was selected later that year.

According to the Justice Department, that process was a sham, and Public Partnerships had been prechosen for the deal. Once it was picked, New York officials failed to hold Public Partnerships accountable when it deviated from representations made in its bid, the feds say in their 57-page lawsuit. They accuse both Public Partnerships and New York of concealing the fact that the transition to a single vendor likely wouldn’t be finished by the stated deadline of April 1, 2025.

The U.S. government also says the defendants disregarded contractual limits on the profits Public Partnerships could receive.

“New York’s backroom deal with PPL has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb,” Colin M. McDonald, assistant attorney general in the Justice Department’s National Fraud Enforcement Division, said in a statement Tuesday. “Today’s action is the latest reminder that the Justice Department is mobilizing every available tool to protect taxpayer-funded programs from fraud and corruption.”

While the federal government says the state’s bidding scheme cost taxpayers money, the state says New Yorkers saved more than $1 billion last year when streamlining the program removed hundreds of “wasteful administrative middlemen.”

“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 Health Department spokesperson said in an emailed statement.

Centralizing monitoring and data analyses allow the department to identify and block fraudulent conduct like billing for consumers who were deceased or hospitalized, or fudged time cards, per the department. Preventing those scenarios, or acting quickly to remedy them, reduces improper payments and saves money overall.

“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,” the department said.

In October 2025, a New York appeals court upheld the state’s decision to award Public Partnerships the fiscal intermediary contract, determining the Health Department met its legal obligation to perform a meaningful review of bids using the criteria outlined in the department’s request for proposals.

The department then calculated a technical score and a cost score for each bidder’s “per member per month” price for administrative services in making its decision.

“Petitioner did not sustain its burden of showing that DOH’s determination was arbitrary and capricious, affected by an error of law, an abuse of discretion, or done in violation of lawful procedure,” the appeals court said in its ruling. It affirmed the lower court’s decision denying the petition to annul the state’s decision awarding the contract to Public Partnership.

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