Feds sue NYC, say city committed Medicaid fraud

NEW YORK – The federal government sued the city of New York on Tuesday for Medicaid fraud, accusing it of overcharging the program tens of millions of dollars for 24-hour services for patients who need help with shopping, grooming and other personal care.

The government in a lawsuit in U.S. District Court in Manhattan sought civil penalties and damages against the city, saying administrators over the last 10 years routinely reauthorized 24-hour continuous personal care services for applicants without obtaining the required local medical evaluation.

According to the lawsuit, state law requires that anyone found eligible for the program receive assessments from a doctor, a social worker, a nurse and — when 24-hour care is necessary — from a designated local medical director.

The lawsuit said city administrators sometimes overruled the local medical director when the director decided continued care was inappropriate.

In a release, U.S. Attorney Preet Bharara said the allegations "unfortunately reflect a systemic failure to responsibly administer the Medicaid program."

Bharara added: "It goes without saying that ultimate medical decisions about patient care should be made by doctors and nurses, not government bureaucrats, and they should be based first and foremost on the best interests of the patient."

The city Human Resources Administration, which administers the program in the city, responded to the lawsuit in a statement by noting that the city helps nearly 42,000 frail and elderly New Yorkers with their daily needs through the program and takes its responsibilities seriously.

In the lawsuit, the government said about 17,500 people have received 24-hour personal care services from the city since 2000. It said the current annual cost of the services ranges from $75,000 to $150,000 per individual.

Sometimes, the city's conduct has caused patients to receive more services than necessary or warranted by their condition, costing taxpayers millions, the lawsuit said.

The federal government cited one instance in which a medical doctor determined that a 65-year-old woman did not need 24-hour services, only to be overruled by a city administrator who authorized the services anyway.

In another instance, the city caused a 75-year-old patient to get less care than needed by keeping the person in the 24-hour care program even though the local medical director said the patient needed to be in a psychiatric facility, the lawsuit said.