The New York Attorney General, Letitia James, has taken decisive action to combat Medicaid fraud committed by transportation companies. These fraudulent schemes involve fake billing practices that exploit vulnerable patients and defraud Medicaid. To put an end to this egregious behavior, the Office of the Attorney General (OAG) has sent cease and desist notices to 54 transportation companies across the state. These notices serve as a warning, highlighting the potential financial penalties and prison sentences that await those who persist in their illegal activities of overcharging Medicaid for fraudulent services.
The OAG’s investigations into the medical transportation industry have already yielded impressive results, securing over $10 million and leading to the criminal convictions of 11 individuals. As part of their ongoing efforts, Attorney General James has recently reached settlements with four transportation companies. These settlements, totaling over $847,000, serve as a strong deterrent against future illegal billing schemes.
The OAG’s actions demonstrate their commitment to protecting vulnerable patients and ensuring the integrity of the Medicaid system. By holding transportation companies accountable for their fraudulent practices, they are safeguarding taxpayer dollars and preventing further exploitation of those in need of medical transportation services. Through their vigilant efforts, the OAG is making significant strides in the fight against Medicaid fraud.
“Exploiting Medicaid patients and unlawfully profiting from it is not only a violation of the law but also a threat to the healthcare system that all New Yorkers depend on,” emphasized Attorney General James. She issued a stern warning to the entire medical transportation industry, urging them to cease these deceptive practices that exploit vulnerable individuals and deplete crucial funds intended for healthcare services.
With millions of dollars already recovered and prison sentences secured for those involved in such fraudulent activities, the Attorney General remains steadfast in her commitment to dismantle these schemes. Her relentless efforts aim to safeguard state funds from being stolen through corruption and fraud, ensuring that they are utilized to assist those in genuine need.”
Medicaid reimburses approved companies for transporting Medicaid patients to and from their medical appointments. Eligible providers, such as licensed taxi companies, enroll with the state and are randomly assigned to transport patients to specific non-emergency medical visits. These companies must ensure that they employ licensed drivers and use appropriate vehicles. They can only bill Medicaid for services that have been provided, including a base rate for the trip, mileage, and any tolls incurred.
The Medicaid Fraud Control Unit (MFCU) of the OAG has conducted investigations on transportation companies statewide that engage in fraudulent activities to embezzle Medicaid funds. These companies employ various deceptive tactics, including submitting false invoices, inflating costs by adding fake toll charges, manipulating trip mileage, and employing unlicensed drivers. Additionally, some companies take advantage of vulnerable Medicaid recipients by offering them kickbacks in exchange for requesting transportation services from their company. Such kickback schemes further jeopardize the well-being of already vulnerable New Yorkers. MFCU investigators have uncovered instances where transportation companies exploited Medicaid recipients seeking substance abuse treatment by recruiting them as passengers for fraudulent billing schemes.
Attorney General James has taken decisive action against Medicaid fraud by unveiling new measures. In a recent announcement, the OAG has issued cease and desist notices to 54 transportation companies across the state, compelling them to halt their fraudulent billing practices that not only siphon funds but also jeopardize the well-being of Medicaid patients.
To further hold these companies accountable, fifteen of them have also been served demands for the repayment of unlawfully obtained funds. These notices serve as a reminder of the violations committed and provide a clear outline of the potential penalties that await non-compliant companies. It is important to note that Medicaid providers who knowingly breach laws and regulations may face severe consequences, including imprisonment and hefty fines. In the event that these companies persist with their illicit practices, the OAG will exhaust all available legal options to recover funds and ensure that the individuals behind these operations face appropriate punishment.
Attorney General James has recently announced four new settlements with transportation companies for violating Medicaid transportation rules, which will result in the return of over $847,000 to the state. These settlements are in addition to the cease and desist notices. The transportation companies involved are as follows:
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- 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 United States Department of Health and Human Services – Office of the Inspector General, the New York State Department of Health, the Office of the Medicaid Inspector General, and the State’s transportation administrator, Medical Answering Services LLC, for their collaboration in these investigations.
The investigations were carried out by a team of Auditor-Investigators and Data Analysts, led by MFCU Chief Auditor Dejan Budimir. MFCU Detectives, under the leadership of former Deputy Chief Commanding Officer William Falk and Deputy Chief Ronald Lynch, also played a crucial role. Acting Commanding Officer Ronald Lynch, MFCU Regional Directors, Special Assistant Attorneys General, and legal support analysts from each of the Medicaid Fraud Control Unit’s seven regional offices worked together, with coordination from MFCU Chief of Criminal Investigations Thomas O’Hanlon and MFCU Chief of Civil Enforcement Alee Scott, along with AAG Emily Auletta. MFCU, which is headed by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney, operates under the Division of Criminal Justice, led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.
MFCU’s investigations have resulted in the criminal convictions of fraudulent transportation providers throughout the state. In December 2024, Attorney General James announced the convictions and sentences of five taxi company owners and their seven companies. They were found guilty of stealing over $4.4 million in Medicaid funds through fake billing and illegal kickback schemes, as well as money laundering. Similarly, in October 2024, Attorney General James secured the convictions of three owners of a transportation company in Monroe County for engaging in fake billing and illegal kickback schemes. The masterminds behind the scheme will serve prison and jail time, in addition to being required to repay over $2.1 million. Continuing in March 2023, Attorney General James successfully obtained over $860,000 from a Capital Region transportation company that had fraudulently billed Medicaid. In 2020, Attorney General James secured the conviction of a Niagara Falls transportation company owner for stealing from Medicaid by submitting fraudulent claims for rides that were never provided. The owner and their drivers were ordered to pay $1.2 million in restitution to the state. In 2019, Attorney General James announced the indictment and subsequent arrest of the owner of Purple Heart Transportation in New York City. They were found guilty of stealing from Medicaid by submitting fake transportation service bills for services that were never rendered. The masterminds behind this scheme have been sentenced to prison and jail, and have already repaid $4.5 million to date.
If you suspect Medicaid provider fraud or have information regarding abuse or neglect of a nursing home resident, it is important to report it. The Medicaid Fraud Control Unit (MFCU) is dedicated to safeguarding the public by tackling Medicaid provider fraud and ensuring the protection of nursing home residents. To file a complaint, you can do so confidentially through an online form or by calling the MFCU hotline at (800) 771-7755. In case of an emergency situation, it is crucial to immediately contact 911.
New York MFCU has received a total funding of $70,502,916 for the federal fiscal year (FY) 2025. Out of this amount, 75 percent, which is $52,877,188, has been awarded as a grant by the U.S. Department of Health and Human Services. The remaining 25 percent, equivalent to $17,625,728 for FY 2025, is funded by the state of New York.
If you require assistance in accessing Medicaid transportation services, you can reach out to New York’s Medical Transportation Broker through the following contact numbers:
