New York City and IT vendor charged with Medicaid fraud

The Manhattan U.S. attorney intervened in a whistleblower lawsuit accusing New York City and Computer Sciences Corp. (CSC) of defrauding Medicaid though computerized billing scams, the U.S. Department of Justice announced.

The defendants allegedly manipulated the system's default settings to compel Medicaid payments for early intervention services to developmentally delayed preschoolers, according to Reuters.

Prosecutors say the defendants rigged the billing system to bypass Medicaid's secondary payer requirement, which states that Medicaid will only pay claims after private health insurance coverage is exhausted. CSC reportedly created a program to apply a default policy number to claims to cause payment denials by commercial payers. This enabled CSC and the city to submit tens of thousands of claims to Medicaid prematurely, which allegedly helped CSC meet the city's targets for Medicaid payments, the announcement noted. 

Moreover, CSC and the city reportedly used default programs to file Medicaid claims before private insurers had time to adjudicate them, the DOJ noted. In some cases, the city failed to supply additional information private insurers needed to process pending claims.

And in a related scheme, the defendants allegedly changed diagnosis codes used by providers to a generic code CSC knew would result in Medicaid payment, Reuters reported.

"As alleged, CSC and the city created computer programs that systematically and fraudulently altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible," said U.S. attorney Preet Bharara in the announcement. "Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid."  

Richard Adamonis, spokesman for CSC, told Reuters the company is confident it did not file false Medicaid claims. And Nick Paollucci, spokesman for New York City's Law Department, told Reuters the allegations "involve technical billing issues, not fraud."         

New York state plans to bring a related case against Computer Sciences, Reuters reported. New York is one of the states with the highest Medicaid enrollment numbers related to the program's expansion.

For more:
- here's the Reuters article
- read the DOJ announcement

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