[co-author: Stephanie Kozol]*
On June 30, 2025, New York Attorney General (AG) Letitia James announced new lawsuits, criminal charges, and settlements with 25 New York transportation companies related to alleged schemes to defraud Medicaid of millions.
The Investigation
The New York AG’s investigation into Medicaid fraud within New York’s medical transportation industry has been ongoing for more than five years, resulting in more than a dozen convictions and, as of January 2025, $10 million in settlements and financial penalties.
In January 2025, the New York AG announced the issuance of cease-and-desist notices to 54 transportation companies, warning them of potential financial penalties and prison sentences if they continued their alleged schemes of overcharging Medicaid for fraudulent services. These 54 companies and their owners faced various allegations, including:
- Billing for trips that never occurred;
- Inflated mileage and fake toll claims;
- Use of unlicensed drivers; and
- Kickback schemes involving vulnerable recipients — often targeting those seeking substance-abuse treatment.
The New York AG’s latest update on its medical transportation investigation announced settlements totaling $13 million from 16 companies, with seven new companies facing lawsuits. Each of the seven companies facing lawsuits received one of the January 2025 cease-and-desist letters but, according to the New York AG, they failed to comply and continued their allegedly fraudulent practices.
The New York AG is also seeking to hold owners of medical transport companies personally responsible for the alleged schemes. Two owners recently pled guilty to charges arising from the investigation: one for grand larceny and the other for offering a false instrument for filing in the second degree. Additionally, one owner faces charges of grand larceny, health care fraud, and offering a false instrument for filing.
Key Takeaways for the Medical Transport Industry
The New York AG’s latest announcement regarding her long-running investigation of the medical transportation industry indicates that the industry is still under scrutiny in New York. Accordingly, providers should pay heed to the relevant licensing and billing requirements, and any cease-and-desist letters they receive from the New York AG’s office to avoid becoming the target of future enforcement actions.
Medicaid reimburses licensed transportation providers for nonemergency trips — including a base fare, mileage, and tolls. Providers must use licensed drivers, proper vehicles, and only bill for actual, necessary trips. So, medical transportation providers should consider taking the following steps to ensure compliance:
- Accurate billing – ensure trip mileage submitted for Medicaid reimbursement aligns with vehicle odometer readings.
- Following licensing requirements – use proper vehicles and fully licensed drivers in compliance with TLC/Medicaid rules.
- Avoid Kickbacks – avoid any incentive payments to clients for requesting transportation services.
- Internal auditing – regularly audit bills, mileage logs, toll receipts, and ride confirmations to ensure employees and independent contractors are not engaging in fraud.
Why It Matters
While often overshadowed by federal investigations, state AGs are playing a growing role in policing Medicaid spending. The New York AG’s ongoing investigation and enforcement actions against medical transportation providers are just one part of a broader surge in state-led Medicaid fraud takedowns, reinforcing that every level of government is scrutinizing the misuse of taxpayer dollars.
*Senior Government Relations Manager
