The government announced it settled a civil fraud lawsuit against Community Options, Inc., (“COI”) and Community Options New York, Inc., (“CONY,” and together with COI, the “Defendants” or “Community Options”) for fraudulently billing Medicaid for services without necessary and accurate documentation and failing to report and return overpayments to Medicaid. Defendants agreed to pay the United States $2,148,540.37 plus $2,868,085.74 to the State of New York, for a settlement totaling $5,016,626.11.

CONY, a New York-based not-for-profit corporation, operates a network of residential and non-residential facilities and programs for adults with developmental or intellectual disabilities in the State of New York. The network offers Day Habilitation services and beneficial programs to boost individuals’ independence and life skills.

COI, located in New Jersey, oversees CONY and lends administrative support to process CONY’s claim submissions for reimbursement to the New York Medicaid Program.

Among other violations from 2017-2024, Community Options did not meet the New York State Office for People With Developmental Disabilities (OPWDD) requirements. They did not maintain adequate policies concerning the provision and documentation of Day Habilitation services consistent with the requirements and failed to adequately train their employees in compliance.

Defendants entered into a Corporate Integrity Agreement with HHS-OIG, requiring that they maintain a compliance program to follow federal healthcare program requirements. They will use an independent organization to review claims they submit to Medicaid to ensure they meet all requirements.

Acting U.S. Attorney Matthew Podolsky said: “Community Options has now admitted and accepted responsibility for its conduct. This Office will continue to ensure that our most vulnerable New Yorkers receive the services they deserve, and that our federal healthcare programs are protected against fraud and abuse.”

Constantine Cannon whistleblower partner Alysia Solow said: “Everyone who participates in federal healthcare programs must comply with all laws to ensure taxpayer dollars are used appropriately. This case underscores the importance of enforcing laws to maintain the integrity of government healthcare programs.”

In connection with this lawsuit and settlement, the government joined a private whistleblower lawsuit filed under seal pursuant to the False Claims Act.

Under the qui tam (or whistleblower provision) of the False Claims Act, private parties can file lawsuits on behalf of the government and receive up to 30% of the monetary recovery.

Medicaid Fraud

Fraud is pervasive in the healthcare and pharmaceutical fields, and with government programs including Medicare and Medicaid. Examples can include upcoding, taking kickback payments for service or patient referrals, billing for medically unnecessary services, making false statements about covered services, and more.

Our Firm Helps Medicaid Fraud Whistleblowers

Constantine Cannon has extensive experience representing Medicaid whistleblowers. Please contact us if you believe you have a case. We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consult.

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United States Attorney’s Office, Southern District of New York, Press Release

Read Network that Offers Programs for Adults with Disabilities Agrees to Pay $5M to Settle False Claims Act Case at constantinecannon.com