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Audit Exposes Deep Flaws in Ride Program (Image Credits: Unsplash)
New York City – A federal audit revealed that nearly half of $445 million spent on non-emergency medical rides in 2018 and 2019 failed to meet Medicaid standards, potentially costing taxpayers up to $196 million.
Audit Exposes Deep Flaws in Ride Program
The Department of Health and Human Services examined payments to 322 transportation providers in New York City. Investigators found numerous violations, including rides without proper documentation, unlicensed drivers, trips lacking medical pre-authorization, and services billed but never provided.
The report prompted federal demands for the state to repay $84 million immediately, while another $112 million remained under review. State officials contested many findings, attributing issues to administrative adjustments during program expansion.
Schemes Involve Ghost Rides and Kickbacks
Several companies faced allegations of elaborate frauds. Queens-based Purple Heart Transportation drew indictments in 2019 after owners and employees allegedly stole $19 million through cash kickbacks to patients who lent their Medicaid IDs for fictitious trips.
The firm claimed extraordinary daily mileage on congested streets and routed funds overseas via shell companies. Ringleader Sean Ally and an accomplice pleaded guilty and received prison sentences.
Recent settlements highlighted ongoing problems. The Attorney General’s office recovered $13 million from contractors last year, targeting inflated mileage, fake tolls, and rides for deceased individuals.
| Company | Location | Settlement Amount | Alleged Fraud |
|---|---|---|---|
| American Base No. 1 | Bronx | $4.75 million | Inflated mileage (e.g., 2,158 miles in one day) |
| NBT Transportation | Bronx | $1.5 million | Fake toll expenses |
| Seaman Radio Dispatchers | Manhattan | $1.2 million (ongoing) | Rides for dead passengers; suspended license |
| Agape | Bronx | $2.45 million | Altered trip mileage |
Authorities issued cease-and-desist letters to 54 more firms in January 2025 for issues like unlicensed drivers and passenger kickbacks.
Central Broker Draws Scrutiny Over Ties
Medical Answering Services (MAS) managed the program’s fund distribution under a roughly $1 billion statewide contract renewed by Governor Kathy Hochul in 2023, despite the audit. The firm assumed control after 2011 changes centralized operations away from counties.
Owner Russ Maxwell and his husband, Morgan McDole, donated over $300,000 to former Governor Andrew Cuomo and more than $100,000 to Hochul. They hosted a fundraiser for her shortly before the renewal. Costs for non-emergency rides surged 131% since centralization.
Experts Urge Sweeping Reforms
“Medicaid is generally vulnerable to fraud because its patients don’t usually pay copays, and so may not notice or report improper billing claims,” said Chris Pope, a senior fellow at the Manhattan Institute. He noted non-emergency transport’s risks due to involvement of non-medical professionals.
State Senator George Borrello advocated returning control to counties. “Medicaid transportation used to be a local responsibility, run cost-effectively by counties that understood their communities. Now it’s a billion-dollar boondoggle run by unaccountable brokers who answer to no one, while fraud is exploding and taxpayers are getting ripped off,” he wrote to the governor.
Key Takeaways
- A 2022 federal audit flagged up to $196 million in questionable Medicaid transport payments in New York City alone.
- Recent Attorney General actions recouped $13 million, with more cases pending.
- Program costs have ballooned amid centralized management and political donations linked to key contractors.
This scandal underscores vulnerabilities in New York’s $115 billion annual Medicaid program, which spends more per person than any other state. Stricter oversight could stem future losses and restore trust in essential services for the disabled and ill. What steps should lawmakers take next? Share your thoughts in the comments.
Besides founding Festivaltopia, Fritz is the managing director of Europe’s largest manufacturer of mobile stages Kultour and has a lot of experience in the event industry, loves music and likes to go to festivals.
