ALBANY, N.Y. (Legal Newsline) - The largest Medicaid Managed Care provider in New York has settled allegations that it violated state and federal contracts by reimbursing representatives based on productivity.

Healthfirst will pay $35 million as a result of its settlement with state Attorney General Andrew Cuomo. It follows the indictment of former senior executive James Boothe.

"Medicaid providers engaged in prohibited compensation practices are committing an act of fraud against New York's taxpayers and Healthfirst's new management is rightfully taking responsibility and correcting the mistakes of the past."

Cuomo says Healthfirst paid bonuses or other incentives to employees based on the number of people they enrolled from 1999-2003.

James Boothe was charged with first-degree Insurance Fraud, first-degree Scheme to Defraud, first-degree Offering a False Instrument for Filing and first-degree Falsifying Business Records.

"Marketing reps must not engage in a numbers game that could result in ineligible person being enrolled in the Medicaid program and cost taxpayers more money," Cuomo said.

Since the alleged violations, Healthfirst has picked a new president and chief executive officer, a new chief operating officer and begun a review of past practices.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.