The federal government has taken legal action against New York over a major home care program for Medicaid patients. On June 16, 2026, the U.S. Department of Justice filed a lawsuit in federal court in Brooklyn. The case targets how New York handled a contract worth billions of dollars. It raises serious questions about fairness, public money, and the care of people who depend on the program.

What the Program Does?

The program at the center of the case is the Consumer Directed Personal Assistance Program, often called CDPAP. It is part of New York’s Medicaid system, which spends about 10 billion dollars on home care. The program lets Medicaid patients with disabilities or serious medical needs hire their own caregivers. Many people choose a friend or family member to help them with daily tasks at home.

The program serves a huge number of people. More than 200,000 patients take part, and more than 260,000 personal assistants provide care through it. That makes it one of the largest programs of its kind in the country.

What the Government Claims?

The Justice Department says New York ran an unfair bidding process to pick the company that now manages the program. That company is Public Partnerships LLC, known as PPL, based in Alpharetta, Georgia. PPL has managed CDPAP since 2025.

The government argues that the state already picked PPL before the bidding even started. It calls the process a sham. The lawsuit claims PPL then earned millions of dollars in improper profits. It also says state officials learned that PPL planned to break the terms of its contract but did nothing to stop it.

A Justice Department official said New York’s failure to watch over a favored company harmed taxpayers and betrayed public trust. Another official said the deal pushed many Medicaid patients aside and cost taxpayers millions.

Here is a clear summary of the key facts in the case.

Who the Lawsuit Names?

The lawsuit names several defendants. It includes the New York State Department of Health and the state’s Medicaid director, Amir Bassiri. It also names the company, PPL, as a defendant.

Governor Kathy Hochul is not a defendant. The lawsuit does not accuse her of any wrongdoing.

What the Government Wants?

The Justice Department is asking the court to step in and fix the situation. It wants the judge to stop any further fraud and to block the company from charging taxpayers for costs the contract does not allow.

The government also wants the court to appoint a receiver to take over the company’s role. A receiver is an outside party who steps in to manage an organization when serious problems arise. This request shows how far the government wants the court to go.

How New York Responded?

New York pushed back hard against the lawsuit. A spokesperson for Governor Hochul called the case a political attack. The spokesperson said the Trump administration is using the justice system to go after political opponents during an election year.

The state also defended its choice to use a single company to manage the program. According to the governor’s office, that decision has already saved taxpayers more than 1 billion dollars. The state says the move also helped reduce fraud, waste, and abuse. The Health Department rejected the claims in the lawsuit.

Why This Matters?

This case touches the lives of hundreds of thousands of people. Patients rely on the program for daily care, and many caregivers depend on it for their work. Any disruption could affect them directly.

The case also raises bigger questions about how states manage large public programs. Medicaid spending in New York has grown sharply over the past several years. Both sides agree the program needs careful oversight, even as they disagree about what went wrong here.

What Happens Next?

The case now moves through the federal court system. A judge will review the claims and the evidence from both sides. The state and the company will have the chance to respond in court and defend their actions.

For now, the program continues to operate while the legal fight plays out. The outcome could shape how New York runs its home care services for years to come. It may also influence how other states handle similar contracts. People who use the program will want to watch closely, since the result could affect the care they count on every day.