DOJ Accuses New York Officials of Fraud in $10 Billion Home Care Program

A federal lawsuit targets New York’s top health officials and a Georgia company, claiming a rigged bidding process put the care of 250,000 disabled New Yorkers at risk while millions in Medicaid dollars vanished into improper profits.

CDPAP Fraud Allegations Shake New York’s Home Care System

When the federal government accuses state officials of running a “sham” bidding process to benefit a favored company with billions of Medicaid dollars on the line, that is not a political dispute. That is a crisis for the people who depend on the program to survive.

The U.S. Department of Justice filed a civil lawsuit Tuesday against two of New York State’s top health officials and a Georgia-based private company, alleging a brazen CDPAP fraud scheme that used false statements, rigged bids, and backroom deals to funnel control of a $10 billion Medicaid home care program to a single, pre-selected vendor. At the center of it all: the Consumer Directed Personal Assistance Program, known as CDPAP, which serves more than 250,000 New Yorkers with disabilities.

What Is CDPAP and Why Does It Matter?

The Consumer Directed Personal Assistance Program is one of the most human-centered programs in New York’s Medicaid system. It allows people with serious disabilities to hire their own aides, including trusted friends and family members, who are then paid through a fiscal intermediary using Medicaid funds.

According to the DOJ lawsuit, in 2024 the program enrolled over 250,000 disabled New Yorkers and employed more than 300,000 workers, making it one of the state’s largest health benefit programs. It is not a bureaucratic abstraction. It is the difference between a disabled person living independently or losing their ability to function day to day.

For years, the program was administered by more than 600 fiscal intermediary companies spread across the state. Then, in 2024, the Hochul administration decided to consolidate that work into the hands of a single company: Public Partnerships LLC, or PPL, a Georgia-based firm.

The Allegations: A Sham Bid and a Backroom Deal

According to the AP News report on the lawsuit, the DOJ alleges that PPL did not win the contract through fair competition. Instead, federal prosecutors claim the company was “preselected” before the bidding process even began, and that the bidding itself was engineered to ensure PPL would win.

Named as defendants in the civil suit are:

• Dr. James McDonald, New York State Health Commissioner

• Amir Bassiri, New York State Medicaid Director (named individually and in his official capacity)

• Public Partnerships LLC (PPL), the Georgia-based company awarded the contract

The DOJ’s allegations are detailed and damning, according to WSKG:

• PPL falsified its bid submissions to “hide the profits it intended to make from a federal health care benefit program”

• PPL misrepresented its ability to take over on the required timeline

• PPL made false claims about its financial resources, customer support plans, website capabilities, and performance history in other states

• The state Department of Health made “false and misleading statements” to program participants, elected officials, and the public about the transition’s progress and impact

• Medicaid Director Bassiri personally “vetted PPL as the presumptive sole FI prior to the bidding period even commencing”

“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 DOJ’s Civil Division.

The lawsuit asks the court to unwind the transaction entirely.

The Hochul Administration Fires Back

New York State officials did not accept the allegations quietly. Governor Kathy Hochul’s office dismissed the lawsuit as a political weapon, according to Gothamist.

“This is just another sad attempt by the Trump administration to weaponize the justice system to attack political opponents in an election year,” a Hochul spokesperson said.

The New York State Department of Health was equally blunt:

“This baseless complaint is the latest attempt by Washington Republicans to score political points at the expense of vulnerable New Yorkers. The fact of the matter is this administration saved CDPAP from a fiscal crisis by removing hundreds of wasteful administrative middlemen.”

The state points to what it calls a real accomplishment: the new structure saved taxpayers more than $1 billion in the first year, they say, while reducing fraud and bringing greater accountability to the program.

PPL also pushed back, defending its record through a spokesperson:

“Public Partnerships LLC 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.”

The Political Divide Is Real, But So Are the Victims

This case sits at a complicated intersection of politics, public health policy, and Medicaid accountability. The Trump DOJ’s decision to target a Democratic-led state’s flagship social program will inevitably read as political to some, and as legitimate law enforcement to others. Both can be true at the same time.

What cannot be argued is that the CDPAP transition was rocky. The rollout triggered widespread criticism from home care consumers, workers, advocates, and lawmakers across party lines from the moment it was announced. Hundreds of fiscal intermediary companies were shut out of the market overnight. Workers reported delays in pay. People with disabilities feared losing access to the aides they trusted.

State Senate Minority Leader Rob Ortt supported the DOJ’s action in a statement, saying Senate Republicans had been sounding the alarm about the troubled transition for months:

“The federal government’s decision to examine this transition is an important step toward providing the answers that patients, caregivers, providers, and taxpayers deserve.”

But even some advocates who have been deeply critical of the Hochul administration’s handling of CDPAP expressed caution about the DOJ’s motives. Ilana Berger of Caring Majority, an organization representing home care consumers and workers, told WSKG:

“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. 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 red carpet for the Trump administration to come in and claim fraud.”

What Is at Stake for New Yorkers

At its core, this lawsuit is about whether a $10 billion program that vulnerable people depend on was handed to a company through manipulation rather than merit. That question deserves a real answer, no matter which side of the political aisle you sit on.

More than 250,000 disabled New Yorkers wake up every day relying on CDPAP to live with dignity and independence. They are not a talking point. They are real people. And if the federal government’s allegations are correct, those people were put at risk while state officials and a private company made false claims and manipulated a bidding process for financial gain.

Here is what matters going forward:

• The DOJ’s civil lawsuit is now before the courts. No criminal charges have been filed.

• All defendants are entitled to defend themselves in court and are presumed to act lawfully until a court rules otherwise.

• The lawsuit seeks to unwind the PPL contract, which could mean another significant transition for program participants.

• Program participants and their families should stay engaged and contact their representatives if their services are disrupted.

Transparency Must Win

Whatever the outcome of this lawsuit, New York’s leaders owe the public a transparent account of how this contract was awarded. When Medicaid dollars fund a program this large, and this important to people’s daily lives, the bidding process must be airtight. No backroom deals. No pre-selected winners. No false statements to elected officials.

If the state acted lawfully and saved a billion dollars, it should be able to prove that in court. And if it did not, the people of New York deserve to know.

Stay informed, stay engaged, and demand accountability from the officials who manage the programs that serve the most vulnerable among us.