The Justice Department is suing the state over a Medicaid program.
They say the Consumer Directed Personal Assistance Program is riddled with fraud and accused the state of bid-rigging.
The program was transferred to a single, out-of-state corporation, PPL, last year.
The $11 billion program allows about a quarter-million disabled and elderly people to get health care at their own home and live independently.
State officials deny the allegations, saying the move saved taxpayers $1 billion in the first year.