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ALBANY – The US Department of Justice is set to file a lawsuit against Gov. Kathy Hochul’s administration over its allegedly rigged revamp of the state’s Medicaid homecare program, The Post has learned.
The feds will file a formal complaint in the coming weeks, expected to take aim at both Hochul’s admin and the company at the center of the $11 billion program’s overhaul, according to three sources familiar with the DOJ’s investigation.
The federal probe, spurred in part by an investigation by state Senators last year, could hone in on a range of accusations surrounding the homecare mess, including alleged bid rigging and non-compliance with Medicaid billing rules, the sources said.
The move comes as 1199SEIU — the powerful healthcare union that pushed Hochul and lawmakers to overhaul the Consumer Directed Personal Assistance Program, or CDPAP — enters the final stages of unionizing thousands of home health aides employed through the taxpayer-funded scheme.
Hochul took up the CDPAP revamp in 2024, citing allegations of rampant fraud and abuse, and decided to change the way aides enrolled in the program to provide care to loved ones at home are paid — switching from hundreds of middlemen firms to one company in charge of payroll.
But her administration has since faced accusations that the bidding process was skewed in favor of the company that ended up landing the massive, $1 billion contract, Public Partnerships LLC, or PPL.
Damning emails unearthed by the Empire Center for Public Policy Tuesday show top officials at the state Department of Health and in Hochul’s office hashed out details of the job with PPL employees — two weeks before state lawmakers even signed off on soliciting bids for the contract.
“We appreciate the opportunity to speak with you over the last few days. As discussed during this morning’s call, PPL is in the process of drafting a recommended implementation plan,” a PPL employee wrote in a 2024 email to state Medicaid Director Amir Bassiri and Medicaid Chief Operating Officer Amanda Lothrop, amid several meetings between the firm and top health officials at the time.
Bassiri would later be one of the individuals involved in scoring the contract bids, according to sources familiar with the process.
Angela Profeta, Hochul’s deputy secretary for health, was also looped in on the conversations, according to the emails obtained by the Empire Center.
A week after that email was sent — and still before the state budget deal involving the sweeping changes to CDPAP’s payment structure had been finalized — The Post previously reported that Hochul was trying to hand the contract to PPL.
A rep for PPL told lawmakers during a blockbuster hearing in August that the company had no conversations with the Hochul administration before submitting its proposal for the job, then later rescinded that statement.
Patrick Runkle, assistant director of the DOJ’s Consumer Affairs branch, wrote in a court document in June that his team was also probing whether the rushed timeline to force aides and homecare recipients under PPL had violated consumer protection statutes.
Hochul has defiantly dug in on the CDPAP reboot – refusing to entertain extending the window for the transition to PPL last year and now doubling down that her changes have resulted in massive savings in New York’s exploding Medicaid spending.
“We saved over a billion dollars as a result,” state Budget Director Blake Washington said during a discussion with Citizens Budget Commission President Andrew Rein last week.
Hochul’s budget office hasn’t provided details to support its claim of $1 billion in projected savings, and the state still expects Medicaid spending as a whole to grow by a blistering 11% this year.
Hochul’s office declined to address the looming lawsuit or allegations it rigged the process in favor of PPL.
“Well before the Trump administration even took office, Governor Hochul was leading efforts to root out waste, fraud and abuse – including sweeping CDPAP reforms,” Hochul spokesperson Jonah Allon wrote in a statement.
A rep for PPL declined to say if the firm was cooperating with the federal investigation and maintained that its ultimate selection “followed a routine, lawful process.”
“When New York decided to transition CDPAP to a single fiscal intermediary to protect the program’s sustainability and save taxpayer dollars, PPL was an obvious contender as the national leader in consumer-directed care,” said PPL’s Vice President of Government Relations Patty Byrnes, the rep who retracted her statement to state senators.
The Department of Health and 1199SEIU didn’t respond to requests for comment.
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