By Nicholas Spangler

Read on Newsday

Updated January 8, 2025 6:48 pm

More than 50 patient transportation companies across New York, including five on Long Island, used fake billing schemes to steal from Medicaid and exploit vulnerable patients, the state attorney general said Wednesday.

While most companies transporting patients do so lawfully, fraud in the industry is a “major source” of Medicaid fraud overall, James said.

Some companies recruited substance abuse patients to request rides specifically from their services, inflated mileage for trips and billed for rides that never happened or tolls they never paid, according to her office.

Additionally, the Medicaid Inspector General’s report cited a “surge” of providers billing $50, the maximum amount allowed under Medicaid guidelines for tolls, and one driver who claimed to have driven 277,000 miles in one month. To accomplish that feat, the reports’ authors noted, the driver would have needed to maintain an average speed of 412.4 miles per hour while driving 24 hours per day.

In fiscal 2023, the last year for which statistics were available, the Medicaid Fraud Control Unit in James’ office recovered $73.2 million in settlements and judgments, carrying out 482 fraud investigations and winning seven convictions, according to the federal Department of Health and Human Services. 

That work “is protecting patients and ensuring that Medicaid funds are used appropriately,” said Vanessa Baird-Streeter, president and CEO of Health and Welfare Council of Long Island, a nonprofit umbrella organization for health and human service providers. “With less money lost to fraud, more funds can be directed to improving health care services and expanding coverage.”

In addition to the cease-and-desist notices, James’ office announced Wednesday settlements totaling $847,000 with four upstate transportation companies.

In June in federal court in Central Islip, eight defendants were charged with a multimillion-dollar health care fraud scheme, allegedly billing Medicaid for ambulette services to medical appointments that were not performed, including some claims for patients who were dead.

In a separate case in November, a Nassau County man, John Gouzos, pleaded guilty in Rensselaer County Court to stealing from Medicaid, according to James’ office. According to a news release from the office, Gouzos, owner of the Medi Cab company, pleaded guilty to health care fraud, a felony, and is scheduled to be sentenced Jan. 27 to six months in jail concurrent with five years of probation.

Prosecutors said he paid illegal kickbacks to Medicaid patients to request rides from locations much farther away from where they were actually transported, allowing them to charge more per ride. 

Not all cases of suspected fraud result in criminal prosecution, and James said her office had cut transportation fraud simply by investigating it. Between 2019 and 2023, according to a chart prepared by her office that was displayed at the news conference, payment by Medicaid for tolls in New York dropped abruptly from more than $20 million to just over $10 million.