New York City agreed to a $70 million settlement with the Justice Department, which accused the city's personal-care services of over billing Medicaid's PCS Program by millions of dollars.

This program is designed to provide the basic essentials for patients, such as cleaning, shopping and medical aid to Medicaid recipients.  Under the law, an applicant may not receive these services unless their eligibility is determined.   This includes assessments from a physician, social worker and a nurse.  Since 2000, nearly 17,500 people have received this 24-hour health care service from the city and Medicaid, the Justice Department pointed out.

Given the size and scope of the programs administered by the city, and the highly punitive and draconian application of the False Claims Act, which provides for triple damages, the city's decision to settle the case was prudent and in the best interest of protecting the city's [fiscal health], said Michael Cardozo, city corporation counsel to the City of New York, in a statement, according to the Wall Street Journal. The City remains deeply concerned about the use of the False Claims Act to resolve funding disputes among governmental entities.

U.S.Attorney Preet Bharara, who has recently made headlines by helping to expose a gun running scheme by the NYPD, believed that the settlement was fair, considering how much was defrauded.

U.S. District Judge Jed Rakoff approved the settlement between New York and the federal government.

The settlement acknowledged that nearly a decade, the city was neglectful when it allowed people to receive the 24-hour personal care program without the proper assessments from medical personnel.  The city also pledged to adopt new policies that will meet federal government regulations.

Cardozo had originally claimed that the issue was merely technical record-keeping deficiencies and nothing more.  Federal officials argued that the guidelines were important to the system because it determined payment.

Cardozo said the city had acted appropriately.  The city believed they were providing the program and services people that needed them.

These services allowed poor and infirm New Yorkers - among our most vulnerable population - to remain in their homes and live independently, said Cardozo, according to The New York Times.

Bhara acknowledged Cardozo's comments saying that the settlement does compare to the $18 billion cost that the city incurred since the program began.

It is unfortunate that Mayor Bloomberg's counsel would contradict the stipulations that he personally signed and submitted to the court, in which he acknowledged that the settlement was fair and reasonable, said Bharara, according to The New York Times. The city's argument that this case was about 'paperwork' was specifically rejected by Federal District Court Judge Jed Rakoff when he denied the city's motion to dismiss this case.