Feds Sue City, Alleging Medicaid Mess

By Jonathan Dienst
|  Wednesday, Jan 12, 2011  |  Updated 9:08 AM EDT
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Did New York City drop the ball in administering millions of dollars of Medicaid services - awarding help to people who did not need it?

That is the allegation contained in a civil lawsuit filed by US Attorney Preet Bharara.  The feds are now suing the City stating that for more than 10 years, the city's Human Resources Administration signed off on 24-hour home health care services for thousands of people - many who simply did not require such care.

Investigators say the city signed off on these Medicaid funded services without performing proper medical reviews or follow-ups.  Prosecutors alleged tens of millions of taxpayer dollars were wasted as a result.  In many cases, officials said the city even ignored or overruled doctors who reported patients no longer needed the services.

"The allegations here are serious and unfortunately reflect a systematic failure to responsibly administer the Medicaid program," said Bharara.  In one case, a 64-year-old had recovered, was alert and had good judgment yet the HRA overruled the doctor and awarded expensive 24-hour care for that patient.

Officials said 24-hour care can cost $150,000 per year and since 2000, New York City has had more than 17,000 people awarded such services.  In a statement, an HRA spokeswoman said the agency helps 42,000 elderly New Yorkers and "takes its responsibility to administer the program seriously and is reviewing the complaint."

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