New York Attorney General Letitia James announced new measures to stop a major source of Medicaid fraud by transportation companies that use fake billing schemes to steal from Medicaid and exploit vulnerable patients. The Office of the Attorney General (OAG) issued cease and desist notices to 54 transportation companies throughout the state, warning them of potential financial penalties and prison sentences if they continue their alleged illegal schemes of overcharging Medicaid for fraudulent services. The OAG’s investigations into the medical transportation industry for ongoing fraud have already secured over $10 million and led to criminal convictions of 11 individuals. In addition to issuing the cease and desist notices today, Attorney General James announced recent settlements with four transportation companies totaling over $847,000 for their illegal billing schemes.
Medicaid reimburses authorized businesses for transporting Medicaid patients to and from covered medical services. A licensed taxi company enrolls with the state as an eligible provider and is then randomly assigned to provide trips to patients to specific, non-emergency, medical appointments. The companies must use licensed drivers, proper vehicles, and bill only for services actually rendered. They are allowed to bill Medicaid for a base rate for the trip, plus an amount for mileage and any tolls. The OAG’s Medicaid Fraud Control Unit (MFCU) has investigated transportation companies across the state for using fake billing and other fraudulent tactics to steal Medicaid funds. The companies’ schemes often involve billing Medicaid for fake trips, adding fake tolls to inflate costs, fraudulently extending the mileage of trips, and using unlicensed drivers. In some cases, companies exploit vulnerable Medicaid recipients by paying them kickbacks in exchange for requesting transportation services from the company. These kickback schemes can put already vulnerable New Yorkers at even greater risk. MFCU investigators have uncovered cases in which transportation companies exploited Medicaid recipients in need of substance abuse treatment to recruit passengers to use in fake billing schemes.
