(WNY News Now) Attorney General Letitia James of New York announced new steps aimed at combating Medicaid fraud by focusing on fraudulent practices in the medical transportation sector. 54 businesses throughout the state have received cease and desist letters from her office, warning them that continuing to engage in fraudulent billing schemes could result in harsh consequences, such as monetary compensation and possibly even jail time.
NEW YORK Today, additional York Attorney General Letitia James announced additional actions to combat a significant source of Medicaid fraud: transportation businesses who defraud Medicaid and take advantage of disadvantaged patients by using fraudulent billing techniques. 54 transportation firms around the state received cease and desist orders from the Office of the Attorney General (OAG) today, alerting them to the possibility of fines and jail time should they carry out their alleged unlawful schemes of overcharging Medicaid for fraudulent services. Eleven people have already been convicted of crimes related to continuous fraud in the medical transportation sector as a result of the OAG’s investigations, which have already raised over $10 million. Attorney General James said today that four transportation businesses have reached settlements totaling more than $847,000 for their unlawful billing schemes, in addition to issuing the cease and desist warnings.
Attorney General James stated that businesses that unlawfully profit by taking advantage of Medicaid patients embezzle taxpayer funds and jeopardize the health care system that all New Yorkers depend on. In order to prevent these schemes that exploit vulnerable New Yorkers and embezzle vital monies meant to deliver healthcare to those in need, I am putting the entire medical transportation sector on notice today. Millions of dollars have already been recovered by my office, and individuals responsible for this crime have been sentenced to prison. I will keep doing everything in my ability to put an end to these scams and make sure that state funds intended to assist underprivileged New Yorkers are not embezzled through corruption and fraud.
Authorized companies that transport Medicaid patients to and from covered medical treatments are reimbursed by Medicaid. After registering as an authorized provider with the state, a registered taxi company is chosen at random to transport patients to designated, non-emergency medical appointments. The businesses must only bill for services that are really provided, use drivers with licenses, and drive appropriate vehicles. In addition to the base rate for the trip, they can charge Medicaid for mileage and any tolls.
Transportation firms around the state have been the subject of investigations by the OAG’s Medicaid Fraud Control Unit (MFCU) for stealing Medicaid monies through illegal means, including false billing. The company’s tactics frequently include utilizing unlicensed drivers, adding fictitious tolls to raise prices, falsely prolonging the mileage of rides, and charging Medicaid for fictitious trips. Companies can take advantage of vulnerable Medicaid recipients by offering them kickbacks in return for using their services for transportation. New Yorkers who are already at risk may be further endangered by these kickback schemes. MFCU inspectors have discovered instances where transportation businesses recruited passengers to participate in fraudulent billing schemes by taking advantage of Medicaid users who were in need of substance abuse treatment.
Attorney General James announced fresh steps today to stop this Medicaid fraud scheme. 54 transportation businesses operating around the state have received cease and desist warnings from the OAG, directing them to stop illegal billing practices that jeopardize Medicaid patients and steal money. Demands for the return of money gained fraudulently have also been made against fifteen of these businesses. These businesses received letters outlining their infractions and the possible consequences of breaking the law. Medicaid providers face civil and criminal consequences, including jail time and monetary fines, for willfully breaking laws and regulations. OAG will use all available legal options to recoup money and discipline the business owners if the enterprises don’t alter their operations.
Attorney General James also announced four new settlements with transportation businesses for violations of Medicaid transportation laws, which would refund more than $847,000 to the state, in addition to the cease and desist warnings. These consist of:
- City Service Transportation, Inc. in Erie County will repay $373,216.11.
- AJ Medical Transportation Co. in Albany County will repay $350,000.
- Safe Ride of WNY, Inc. in Erie County and its owner, Robert Sapienza will repay over $66,000.
- Half Moon Medical Transportation, Inc. in Saratoga County has agreed to pay back $58,000.
Attorney General James expresses gratitude to the Office of the Inspector General at the US Department of Health and Human Services, the New York State Department of Health, the Office of the Medicaid Inspector General, and Medical Answering Services LLC, the state’s transportation administrator, for their collaboration on these investigations.
The Medicaid Fraud Control Unit’s seven regional offices were coordinated by MFCU Chief of Criminal Investigations Thomas O. Hanlon, MFCU Chief of Civil Enforcement Alee Scott, and AAG Emily Auletta. The investigations were carried out by Auditor-Investigators and Data Analysts led by MFCU Chief Auditor Dejan Budimir, MFCU Detectives led by former Deputy Chief Commanding Officer, MFCU William Falk, and Deputy Chief Ronald Lynch, Acting Commanding Officer, MFCU, and MFCU Regional Directors, as well as Special Assistant Attorneys General. Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney are in charge of MFCU. First Deputy Attorney General Jennifer Levy oversees the Division of Criminal Justice, which is headed by Chief Deputy Attorney General Jos Maldonado.
Fraudulent transportation providers throughout the state have been found guilty of crimes as a result of MFCU’s investigations. Attorney General James revealed in December 2024 that five cab company operators and their seven businesses had been found guilty and sentenced for money laundering and stealing over $4.4 million in Medicaid payments through fraudulent billing and unlawful kickback schemes. Three Monroe County transportation company proprietors were found guilty in October 2024 of fraudulent billing and unlawful kickback schemes by Attorney General James. The scheme’s masterminds will have to repay more than $2.1 million and serve jail and prison sentences. Attorney General James obtained more than $860,000 from a transportation company in the Capital Region in March 2023 for defrauding Medicaid. The proprietor of a transportation company in Niagara Falls was convicted by Attorney General James in 2020 of stealing from Medicaid by charging the state for rides that they never delivered. The state was ordered to get $1.2 million in reparations from the owner and his drivers. The proprietor of Purple Heart Transportation in New York City was indicted and arrested by Attorney General James in 2019 for defrauding Medicaid by paying for fictitious transportation services that were never rendered. The scheme’s organizers have already paid back $4.5 million and received prison and jail sentences.
Reporting Medicaid Provider Fraud: By combating Medicaid provider fraud and safeguarding nursing home residents from mistreatment and neglect, MFCU protects the public. A person can call the MFCU hotline at (800) 771-7755 or submit a private online complaint if they think they have information concerning Medicaid provider fraud or an instance of abuse or neglect of a nursing home patient. In the event of an emergency, kindly dial 911.
For the federal fiscal year (FY) 2025, New York MFCU has $70,502,916 in total funds. A grant from the U.S. Department of Health and Human Services accounts for 75 percent of that total, or $52,877,188. For FY 2025, New York State will pay $17,625,728 (the remaining 25 percent).
The following numbers can be used to reach New York’s Medical Transportation Broker if you require assistance obtaining Medicaid transportation services:
844-666-6270 in NYC, Long Island, and Westchester; 866-932-7740 in Upstate; or via the MAS website.
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