New York City Sued for Medicaid Fraud

The U.S. Attorney for New York’s Southern District filed suit against New York City in January, alleging that it had fraudulently billed Medicaid for hundreds of hours of unnecessary around-the-clock home health care services through its personal care program. In-home care has become an increasingly attractive alternative to more expensive nursing home care.

According to the complaint, the city improperly billed millions of dollars for these services, at a cost between $75,000 and $150,000 per year per client.  The complaint claims that in some cases the city’s Medicaid agency overruled health care providers’ recommendations for nursing home placement and in others acted without seeking medical opinions.  Some clients whose cases were audited did not need 24-hour services, while others could not receive enough care at home and should have been placed in appropriate facilities, the prosecution claims. 

The government suggests that the city’s pro-home care stance may be motivated by a desire to save money.  The federal Medicaid program splits the cost of home health services with the state, leaving the city with no financial liability.  Nursing home costs, on the other hand, are allocated among all three governmental agencies.

Robert Doar, the city commissioner in charge of the Medicaid services, takes the position that it is better for people to be allowed to stay in their own homes than to be forced to go into nursing homes, even if that means providing them with 24-hour care.