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Group for Disabled NYers Settles $18M Fraud Suit

(CN) - New York's largest provider for adults with developmental disabilities will pay $18 million to settle a fraud lawsuit, filed simultaneously, federal prosecutors said.

The Young Adult Institute falsely inflated the costs of certain residential facilities so it could receive more Medicaid benefits, according to the complaint. In addition to inflating costs, the organization falsely categorized administrative staff as social workers and fund-raising staff as administrative employees.

The institute, which receives much of its funding from New York's Office for People with Developmental Disabilities, did not admit any wrongdoings in settling the government's complaint.

"Medicaid has long been a lifeline for people with developmental disabilities, and every penny in that program must be put to its best and proper use," U.S. Attorney Preet Bharara said in a statement. "As federal and state budgets continue to shrink, it is more important than ever that we vigilantly police the Medicaid program against overbilling and improper diversion of precious dollars."

Under the terms of the settlement, the organization will pay $7.2 million to the U.S. government and the remaining $11.8 million to the state of New York. The company also agreed in a corporate integrity agreement to hire an independent monitor to ensure the accuracy of its future financial submissions.

Assistant U.S. Attorneys Rebecca C. Martin and Jean-David Barnea are handling the case, which will be finalized with the signature of a federal judge.

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