Rigged Medicaid Mega-Deal Exposed

Medicare health insurance documents and prescription drug plan

The Justice Department now says New York’s leaders helped a handpicked company game a $10 billion Medicaid homecare contract and milk federal taxpayers.

Story Snapshot

Federal Justice Department lawsuit says New York ran a “sham” bid that preselected Public Partnerships LLC for a massive Medicaid homecare contract.
Prosecutors allege millions in unauthorized profits, broken promises to patients, and a rigged process that shut out hundreds of competitors.
Hochul’s team and the contractor deny wrongdoing, calling the Trump administration’s case baseless and political.
The case highlights long‑running abuse inside New York Medicaid and the stakes for taxpayers and vulnerable families nationwide.

DOJ says New York rigged the CDPAP overhaul and “preselected” its winner

The United States Department of Justice has filed a civil lawsuit accusing New York’s Department of Health and Medicaid Director Amir Bassiri of using a sham bidding process to award control of the state’s $10 billion Consumer Directed Personal Assistance Program to Public Partnerships LLC, a for‑profit company based in Georgia.^[14] Federal lawyers say the state pretended to run a fair competition in 2024 but had already “pre‑selected” Public Partnerships for the billion‑dollar management contract.^[13]

The lawsuit says New York once relied on hundreds of smaller fiscal intermediaries to help disabled Medicaid patients manage caregivers and payroll, but Hochul’s team moved to replace them with a single statewide contractor.^[6] According to the Justice Department, that shift did not just centralize power, it allegedly let Public Partnerships steer the program and then “siphon” or “drain” millions in extra revenue that are ultimately reimbursed by federal taxpayers.^[11] Prosecutors want a judge to halt the scheme and appoint a receiver to take over the company’s role.^[13]

Alleged fraud, false promises, and harm to patients, caregivers, and small businesses

In its detailed complaint, the Justice Department claims Public Partnerships and New York officials repeatedly misled the public about when the transition would be complete and what it would mean for care.^[14] The contract set April 1, 2025, as the transition date, but the lawsuit says both sides knew early on that this deadline was unrealistic and would cause serious disruptions to homecare services across the state.^[14] The filing says those delays and failures did, in fact, harm patients and caregivers.^[11]

Federal lawyers also allege Public Partnerships quietly planned to blow past profit limits written into the contract, wiping out the cost savings that were supposed to come from consolidating the program.^[13] The complaint says bid documents and later communications misrepresented the company’s financial plans, staffing, website operations, and even its record in other states.^[12] According to the Justice Department, the scheme funneled millions in extra revenue to the company while forcing small and medium‑sized New York homecare businesses out of the market and leaving taxpayers to cover the inflated bills.^[15]

Hochul’s allies deny wrongdoing as more evidence of preselection surfaces

Governor Kathy Hochul is not personally named as a defendant, but the case targets her administration’s flagship homecare overhaul and the officials who carried it out.^[1] Her spokesperson has attacked the lawsuit as a partisan stunt by the Trump administration and insists the bidding process was “fair and competitive” and has already saved over $1 billion while fighting fraud and waste.^[1] Public Partnerships likewise says it won the job through a routine, lawful, and competitive selection process.^[4]

Those claims face mounting pressure from prior reporting and earlier lawsuits that raised similar red flags. Months before this federal case, whistleblowers and rival firms accused Hochul’s team of tilting the field toward Public Partnerships, pointing to emails and legislative drafts that allegedly named the company before bids were even opened.^[4] In one earlier lawsuit, a union official was quoted telling agencies that Public Partnerships would get the contract while the state was still supposedly accepting proposals.^[1] The new Justice Department complaint now echoes that picture, using the phrase “sham bid process” to describe how the winner was chosen.^[14]

Pattern of Medicaid abuse and why this fight matters beyond New York

This is not the first time New York’s Medicaid programs have drawn fraud and abuse scrutiny. The Department of Health and Human Services inspector general previously found the state improperly claimed tens of millions in managed long‑term care payments because plans did not prove eligibility or document services correctly.^[19] Federal prosecutors in Brooklyn also recently forced two homecare agencies to pay nearly $10 million after they falsely claimed they were paying legally required wages and benefits to aides.^[2] These cases show a pattern: weak oversight, complex rules, and big dollars invite abuse.

🚨BREAKING: The DOJ just filed a lawsuit against Kathy Hochul’s admin, alleging it rigged the bidding on an $11 billion Medicaid homecare program.

I WARNED ABOUT THIS LAST YEAR

The bidding on the BIGGEST contract in NY history was insanely rigged and corrupt:

– The consulting… https://t.co/TN4wtyDr9j

— Libs of TikTok (@libsoftiktok) June 16, 2026

For conservative readers, this lawsuit goes to the heart of long‑standing concerns about big government, bloated welfare systems, and cozy deals for political allies. Medicaid is funded by both state and federal taxpayers, which means alleged bid‑rigging in Albany hits family budgets in every state.^[21] The Justice Department says it is now trying to claw back money and stop the ongoing scheme,^[14] but the case will likely take years and appeals to play out. Meanwhile, disabled patients, family caregivers, and many shuttered small businesses are left to live with the damage that centralized, opaque government decision‑making can cause.^[15]