Community Options Fined $5 Mil for Medicaid Fraud

New York Attorney General Letitia James secured over $5 million from Community Options, Inc. and Community Options NY, Inc., a non-profit providing day habilitation services to adults with developmental disabilities in New York City, for failing to provide proper services and submitting false Medicaid claims.

Community Options was found to have ignored regulations designed to ensure safe and adequate care for the vulnerable population it serves. The investigation revealed violations of requirements for day habilitation services from 2017 to 2023, with employees routinely failing to comply with documentation standards.

In January 2022, the organization further violated laws by not returning overpayments for services that did not meet state requirements. Despite acknowledging the errors, a senior employee instructed subordinates to fraudulently create and back-date missing monthly summary notes.

Attorney General James emphasized the importance of quality community-based activities for disabled New Yorkers, stating that Community Options’ actions deprived them of valuable programs. The settlements with the Office of the Attorney General’s Medicaid Fraud Control Unit and the United States Attorney’s Office will ensure proper care and services are provided to those in need.

Community Options’ Day Habilitation Without Walls Program was intended to provide enriching activities for its clients, but the investigation found that many did not receive the full benefits promised due to the non-compliance. The settlement underscores the state’s commitment to protecting vulnerable populations and ensuring organizations live up to their promises of care.

New York’s Medicaid program relies on stringent requirements to ensure providers are delivering quality services. Community Options’ failure to meet these standards has been addressed with a substantial financial penalty, sending a clear message about the consequences of defrauding the system and failing to support individuals with developmental disabilities.