Federal suit filed over 2024 home-care payroll contract in New York

The Justice Department filed suit last week over a 2024 plan to consolidate payroll services for nearly 240,000 home-care aides covered by New York’s Consumer Directed Personal Assistance Program. The program pays aides roughly $20 an hour to assist elderly or disabled residents.

New York lawmakers loosened eligibility rules in 2015, allowing friends and relatives to serve as paid aides, after which enrollment doubled and program costs rose by billions.

Contract award and bidding concerns The lawsuit alleges that state officials steered the single payroll contract to Public Partnership LLC. Court filings state the company had consulted with officials before bidding opened and appeared in an early draft of the reform legislation.

Public Partnership LLC had previously faced operational failures in Pennsylvania and New Jersey. The transition in New York also encountered problems moving workers onto the centralized system.

Spending and enforcement trends New York Medicaid spending is projected to reach $124 billion this year, nearly triple the $46 billion recorded in 2013. Officials report that as many as 3 million of the state’s 6.4 million enrollees may not qualify for benefits.

State records show anti-fraud investigations fell 45 percent and fraud recoveries dropped 80 percent during the current attorney general’s tenure. The state has not achieved the $500 million in annual savings originally projected from the payroll consolidation.