New York Attorney General Letitia James has reached a settlement with Community Options, Inc. and Community Options NY, Inc., recovering over $5 million for improperly providing services and submitting false claims to Medicaid for people with developmental disabilities in New York City. The nonprofit faced accusations of failing to follow required regulations, thus depriving residents of adequate care.
Community Options, known for its "day habilitation" services, ensures adults with developmental disabilities partake in community-based activities. However, investigative efforts by the Office of the Attorney General's Medicaid Fraud Control Unit, in collaboration with the United States Attorney’s Office for the Southern District of New York, revealed the organization's inability to meet obligations, especially between January 1, 2017, and September 13, 2023.
“New Yorkers with developmental disabilities rely on quality, community-based activities to lead fulfilling and independent lives,” said Attorney General James. “Community Options ignored the rules meant to ensure it was delivering the services it promised, depriving vulnerable New Yorkers of opportunities to participate in valuable programs that meet their needs. I thank the U.S. Attorney’s Office for their assistance in this investigation that will ensure New Yorkers with developmental disabilities get the care and services they deserve.”
The analysis found that Community Options not only didn't meet service requirements but also failed to document necessary activities. Additionally, a non-routine review discovered unlawful practices from January 2022, where the nonprofit failed to return overpayments and even created fraudulent documents to mask its deficiencies.
This legal action was prompted by a former employee's whistleblower lawsuit, resulting in the employee receiving a portion of the settlement. Community Options will now repay over $5 million, including about $2.8 million back to New York's Medicaid program.
In the process, expert auditors and investigators from the OAG and USAO-SDNY jointly handled the investigation and settlement process. Attorney General James expressed gratitude for the collaborative efforts. The Medicaid Fraud Control Unit of OAG encourages individuals to report any Medicaid provider fraud or abuse through their confidential hotline.