CSC Faces Lawsuit For Allegedly Helping New York City Carry Out Medicaid Fraud

CSC is under fire this week as the U.S. Justice Department has filed a lawsuit, alleging that the solution provider participated in Medicaid fraud with the New York City government.

The lawsuit was filed this week in Manhattan federal court by Preet Bharara, the U.S. Attorney for the Southern District of New York, against CSC and the city of New York. It alleges that CSC and the city of New York were defrauding Medicaid by using computer systems to alter billing data to their advantage.

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"As alleged, CSC and the City [of New York] created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible. Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid," Bharara said in a statement.

CSC was contracted with the city of New York to help the city process insurance claims and Medicaid payments for its early intervention program (EIP), which provides services to children with developmental delays or medical problems. CSC's contract with the city incentivized the solution provider to help meet or exceed the city's Medicaid payment goals.

The lawsuit alleges that CSC and the city of New York committed Medicaid fraud in three ways. First, that CSC helped the city of New York get around the requirement that the city use private insurance coverage before billing Medicaid by replacing missing policy IDs with a default policy number that private insurers would reject. Second, the lawsuit alleges that the computer programs built by CSC would send claims to Medicaid instead of private insurers after a certain period of time, saying that they had been rejected by private insurers. Third, the lawsuit alleges that CSC developed computer programs to identify codes that would be rejected by Medicaid and replaced them with a generic code.

These alleged schemes allowed the two companies to collect tens of thousands of false claims and millions of dollars from Medicaid, the lawsuit claims.

CSC denied it participated in any fraud. In a statement to CRN, the company said it is confident after its own review of the claims that all eligible beneficiaries received their EIP services, that CSC did not submit EIP claims to Medicaid that were not justified, and that Medicaid paid the correct amount.

"We believe there is no factual or legal basis to support virtually all the allegations of which we have been made aware during the course of the inquiry, and that the complaint is without merit," a CSC spokesperson said.

CSC said that it would be fighting back against these allegations, with the spokesperson saying the company will "vigorously defend itself."

A law department spokesperson from the city of New York said in a statement to CRN, "The City has cooperated fully with the U.S. Attorney's investigation, but we strongly disagree with the allegations, which we believe involve technical billing issues, not fraud. The Health Department acted appropriately and all services billed were authorized and provided."

PUBLISHED OCT. 30, 3014