The US Department of Justice has sued Public Partnerships LLC, Dr James McDonald, commissioner of the New York State Department of Health, and State Medicaid Director Amir Bassiri over alleged fraud connected with New York’s $10 billion Consumer Directed Personal Assistance Program.
The complaint, filed on 16 June in the US District Court for the Eastern District of New York, seeks permanent injunctive relief under 18 USC §1345. McDonald is sued in his official capacity, while Bassiri is sued in both his official and individual capacities. The allegations have not been determined by the court.
The United States alleges that the New York State Department of Health preselected PPL through a sham procurement process before awarding it the role of sole statewide fiscal intermediary for CDPAP. The complaint accuses PPL, McDonald and Bassiri of making false or misleading statements and material omissions concerning the procurement, PPL’s operational readiness and the programme’s administration.
CDPAP provides Medicaid-funded home care through lay caregivers, including family members, to people with disabilities or significant medical needs. New York legislation adopted in spring 2024 consolidated administration from hundreds of fiscal intermediaries to a single provider. PPL secured the contract later that year and was expected to complete the transition by 1 April 2025.
The Justice Department claims PPL’s bid misstated its staffing model, financial readiness and technology capabilities, including representations about its PPL@Home platform. The complaint states that CDPAP served more than 250,000 patients and 300,000 caregivers as of autumn 2024 and billed approximately 350 million hours of care annually.
The complaint also alleges that PPL proposed compensation of $68.50 per member per month but later extracted revenue through hourly billing arrangements outside the contract’s stated financial structure. The government seeks orders restraining further alleged healthcare offences and misleading statements, restrictions on property linked to the alleged conduct and the appointment of a receiver for PPL.
The Civil Division’s Enforcement and Affirmative Litigation Branch investigated the matter. Patrick Runkle, Francisco Unger and Shimeng Zhang are listed as counsel for the United States, alongside US Attorney Joseph Nocella Jr and Assistant Attorney General Brett A. Shumate.
A separate state-law procurement challenge ended on 21 October 2025, when the Appellate Division, First Department, unanimously upheld the dismissal of Freedom Care LLC’s case against the New York State Department of Health.
The court found that Freedom Care had not shown the contract award was arbitrary, capricious or unlawful. Gibson, Dunn & Crutcher represented Freedom Care, while Featherstonehaugh, Clyne & McCardle represented PPL.
The federal action raises separate questions concerning healthcare fraud, false statements and Medicaid-funded revenue. Solicitors and in-house counsel advising government contractors, healthcare providers and managed care organisations will need to test whether bid representations remain accurate after award and whether operational changes create disclosure or remediation duties.
Law firms handling public contracts should expect closer coordination between procurement, fraud, healthcare and regulatory teams as the case proceeds.