Trump DOJ Sues New York Health Officials Over Alleged Fraud in $10 Billion Medicaid Homecare Contract

Jun 16, 2026

The Trump administration's DOJ is suing New York health officials over an alleged "backroom deal" to award a $10 billion Medicaid homecare contract to Public Partnerships LLC (PPL). The suit claims a "sham" bidding process and that PPL siphoned millions in excess revenue. New York officials deny the allegations, calling the lawsuit a politically motivated attack by Republicans in an election year.

DOJ lawsuit against New York

▪The Trump administration's Department of Justice sued top New York health officials on June 16, 2026.
▪The lawsuit alleges a scheme to rig the bidding process for New York's estimated $10 billion Medicaid homecare program, the CDPAP.
▪The lawsuit names NY Health Commissioner Dr. James McDonald, Medicaid Director Amir Bassiri, and Public Partnerships LLC (PPL) as defendants.
▪The DOJ seeks to stop PPL's alleged siphoning of funds, appoint a receiver for the company, and unwind the transaction.

CDPAP contract rigging allegations

▪According to the complaint, Health Department officials cited "pressure from our Governor’s Office" regarding bidder qualifications.
▪The lawsuit accuses NY Medicaid Director Amir Bassiri of helping disqualify other qualified bidders after he personally scored PPL's successful bid.
▪The DOJ alleges the New York Health Department awarded the contract to Georgia-based PPL through a "sham bid process" in late 2024.

PPL preselection claims

▪The complaint alleges PPL misrepresented its administration costs for the $9 billion program to make its bid "artificially attractive."
▪The complaint alleges that Public Partnerships LLC (PPL) was "pre-selected" to take over the program.

Excess revenue billing practices

▪The DOJ claims PPL has taken millions of dollars in excess revenue from the CDPAP by billing at higher-than-expected hourly rates.
▪The alleged excess billing by PPL erased the cost savings that consolidating the program's management was intended to create.

Political weaponization allegations

▪A spokesperson for NY Governor Kathy Hochul called the lawsuit an attempt by the Trump administration to "weaponize the justice system to attack political opponents."
▪The New York Health Department rejected the lawsuit's accusations, calling the complaint "baseless" and the bidding process fair and competitive.
▪PPL stated it was selected through a "transparent, competitive process" and is proud of its work to modernize the CDPAP program.

CDPAP consolidation to single entity

▪In 2024, New York's legislature decided to consolidate management of the CDPAP from over 600 entities to a single one.
▪New York's Consumer Directed Personal Assistance Program (CDPAP) serves over 200,000 people with disabilities, allowing them to hire their own aides via Medicaid.
▪New York's health department claims the new single-entity structure saved the state $1 billion in its first year.
▪Governor Kathy Hochul's administration awarded the single-entity contract to PPL in 2024 to streamline the program and lower costs.