New York drivers are accused of bilking as much as $196 million from a badly managed Medicaid transportation program.
A federal audit by the Division of Well being and Human Providers discovered the stunning quantity had been paid to move firms enrolled within the Non-Emergency Medical Transportation (NEMT) program, however rides “didn’t meet or might not have met Medicaid necessities.”
The 2022 report claimed nearly half of $445 million in taxpayer cash paid out in 2018 and 2019 in New York Metropolis was mismanaged. This included rides that weren’t correctly documented, drivers who weren’t correctly licensed, rides that weren’t pre-authorized by a medical practitioner and providers which had been billed however by no means occurred, in keeping with the report.
The federal authorities demanded New York State instantly pay again $84 million of the cash and put an additional $112 million underneath evaluate.
In a single stunning instance, the proprietor and two staff of Queens-based Purple Coronary heart Transportation had been indicted by the state Legal professional Normal for allegedly stealing $19 million, in a scheme that concerned paying weekly money kickbacks to sufferers who lent their IDs to make use of for Medicaid billing.
Purple Coronary heart claimed to rack up 1,000 miles a day on New York’s crowded streets. They then allegedly funneled the proceeds abroad by shell firms, in keeping with the AG. In October 2019, the three had been arrested after returning to the US from their native Guyana. Ringleader Sean Ally, an unlawful immigrant, and one confederate pleaded responsible and had been despatched to jail, in keeping with a lawyer concerned within the case.
Regardless of the alarming audit, which included 322 transportation suppliers in New York Metropolis, Gov. Kathy Hochul rewarded the corporate answerable for doling out the funds, Medical Answering Providers (MAS), by increasing its roughly $1 billion contract in 2023.
HHS stated state officers ought to work with MAS to “refund to the federal authorities any unallowable quantities.”
It’s unclear if the state ever complied. Officers didn’t reply to The Publish’s request for remark.
“Medicaid is mostly susceptible to fraud as a result of its sufferers don’t normally pay copays, and so might not discover or report improper billing claims,” Chris Pope, a Medicaid professional and senior fellow on the Manhattan Institute, instructed The Publish.
“Non-emergency transportation is especially vulnerable to fraud, as a result of it permits individuals who aren’t licensed medical professionals to assert funds from this system.”
The state disputed the HHS report, admitting to solely a small variety of inconsistencies. It claimed many of the suspicious rides really did meet necessities, or had been as a consequence of bookkeeping rising pains as MAS expanded its territory.
The issues have since continued, The Publish can reveal. Within the final yr, the New York Legal professional Normal’s Medicaid Fraud Management Unit has reached agreements to reclaim $13 million allegedly stolen by NEMT contractors.
In accordance with the settlement from the AG’s workplace, one Bronx-based firm referred to as American Base No. 1 will repay $4.75 million to resolve allegations it grossly inflated milage, amongst different alleged scams, together with one driver who claimed 96 distinctive journeys amounting to driving 2,158 miles in only a single day.
One other Bronx firm, NBT Transportation, pays again $1.5 million to resolve allegations it submitted claims for faux toll bills from Medicaid, in keeping with the AG.
Seaman Radio Dispatchers of Manhattan was sued for $1.2 million for allegedly gathering Medicaid transportation funds for useless folks whereas the corporate’s taxi license was suspended. The defendants have denied civil expenses in opposition to them, and the case is ongoing, court docket information present.
Different firms talked about within the lawsuits and settlements used false addresses to assert funds, employed unlicensed or banned drivers — a few of whom had beforehand been convicted of Medicaid fraud — and operated kickback schemes with passengers.
A Western New York State Senator instructed The Publish of 1 harrowing fraud in his district involving a drug addict utilizing NEMT to attend methadone remedies. The motive force concocted a kickback scheme with the affected person, splitting the fare if the affected person promised to request the identical driver.
The Senator’s workplace stated as an alternative of going to remedy the driving force started taking the affected person to “drug dealing areas.” The affected person has since died.
The AG’s workplace additionally stated they despatched cease-and-desist letters to a different 54 transportation firms suspected of fraud and abuse in January 2025.
MAS has sole management over the state’s ballooning Non-Emergency Medical Transportation (NEMT) program. A 2019 Cuomo-era report confirmed NEMT prices had skyrocketed 131% since 2011, however state lawmakers who spoke to The Publish had no concept how a lot this system prices in the present day — saying the governor’s workplace has not made that info out there to them.
In a 2025 letter to Gov. Hochul urging she return NEMT to county-level management, Republican New York State Senator George Borrello wrote, “Medicaid transportation was an area duty, run cost-effectively by counties that understood their communities.
“Now it’s a billion-dollar boondoggle run by unaccountable brokers who reply to nobody, whereas fraud is exploding and taxpayers are getting ripped off.”
In 2011, Cuomo had taken NEMT away from county-level administration and awarded contracts to regional brokers, giving over $400 million in contacts to Maxwell.
By 2017, Maxwell’s MAS brokerage had management of all of the state’s regional contracts, together with New York Metropolis.
MAS proprietor Rus Maxwell, and his husband, have donated over $300,000 to ex-Governor Andrew Cuomo and his successor, Hochul, even internet hosting a fundraiser for Hochul simply two months earlier than she renewed his firm’s contract.
Maxwell didn’t reply to a request for remark from The Publish.
Maxwell’s husband, Syracuse firefighter Morgan McDole, donated half of his yearly wage, $37,500, to Cuomo’s marketing campaign claiming on the time that it was an expression of gratitude for the governor’s homosexual marriage help.
In 2022, husband McDole donated a further $52,000 to Hochul’s marketing campaign.
Lower than one month after the AG’s workplace introduced the $13 million in lawsuits in opposition to MAS contractors in June 2025, McDole donated $16,000 to Hochul and Maxwell donated $26,000 to the Hochul-controlled New York State Democratic Committee, marketing campaign finance paperwork reviewed by The Publish reveal.
Collectively, the 2 donated $236,000 to Cuomo and over $100,000 to Hochul.
The New York Division of Well being (DOH) declined to reply questions from The Publish concerning the 2022 audit or if the state has since applied reforms.
In contrast to different states similar to Florida, Texas and Minnesota, New York is notoriously tightlipped about its $115 billion annual Medicaid spend, by not offering particulars about the place taxpayer cash finally ends up, as we lately reported.
The Publish lately uncovered how the state misplaced $1.2 billion of taxpayer cash to scammers and middlemen by the Shopper Directed Private Help Program (CDPAP) and the way it spends as much as $400 million a yr on Social Grownup Day Care facilities, which principally duplicate the choices of senior facilities.
Each of those packages, like NEMT, had been Cuomo-era Medicaid overhauls which were continued by Hochul. Prior to those adjustments — which had been bought to taxpayers as cost-saving and fraud-reducing — the state spent about $50 billion a yr on Medicaid.
Gov. Hochul has ignored current bipartisan requires an unbiased audit of the state’s Medicaid behemoth.
