New York City sued by Justice Department over Medicaid claims

The federal government alleges the city of New York and Computer Sciences Corp. orchestrated fraudulent billing schemes that generated millions of dollars in false Medicaid claims paid to the city.

The U.S. Justice Department filed a lawsuit accusing the city and health IT company CSC of violations under the False Claims Act, Preet Bharara, the U.S. attorney based in New York City, announced last week.

According to the complaint, the city and company used computer programs to get around the requirement that Medicaid should be billed only after private health coverage is exhausted. They also allegedly used a “defaulting program” to falsify diagnosis codes.

New York City and CSC officials deny the allegations. “The city has cooperated fully with the U.S. attorney's investigation, but we strongly disagree with the allegations, which we believe involve technical billing issues, not fraud,” the city's law department said in a statement. “The Health Department acted appropriately and all services billed were authorized and provided.”

CSC spokesman Richard Adamonis said in a statement: “We believe there is no factual or legal basis to support virtually all the allegations of which we have been made aware during the course of the inquiry, and that the complaint is without merit.”

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