(The Center Square) — New York is facing a new federal probe of its $124 billion Medicaid program, as the Trump administration moves ahead with its “war on fraud” campaign in Democratic-led states.
In a letter to Gov. Kathy Hochul and other state leaders Tuesday, U.S. Centers for Medicare and Medicaid Director Mehmet Oz demanded “detailed information” about the state’s Medicaid fraud prevention and integrity efforts, citing the “explosive growth” in the number of workers serving elderly New Yorkers in home care, adult day care and personal care programs, among other concerns.
“The data is clear, New York far outspends other states on its Medicaid program on a statewide and per beneficiary basis,” Oz wrote to Hochul and other state leaders. “These elevated costs reflect a combination of more New Yorkers enrolled in Medicaid relative to the state’s population, potential fraud, expansive benefit structures, and excessive provider payment levels within New York’s program compared with most other states.”
New York’s average spending on each Medicaid beneficiary is $12,528 — 36% higher than the national average, he said, pointing out that the state’s Medicaid program costs $90 billion a year — second highest in the nation.
The letter noted recent public reporting, federal prosecutions, and CMS analysis that “raise serious concerns about New York’s oversight of personal care, home health, adult day programming, non-emergency medical transportation and behavioral health services.
“This evidence combined with New York’s elevated per capita Medicaid spending and workforce utilization patterns that significantly exceed national norms, underscores the need for immediate investigation, corrective action, and enhanced transparency,” Oz wrote.
More than 6.8 million New Yorkers — 34% of the state’s population — are currently covered by Medicaid, which is jointly funded by the state and federal government.
In a social media post, Oz said “it’s time for New York to come clean about its Medicaid program” and said he has given the Hochul administration 30 days to turn over documentation about the state fraud detection program integrity infrastructure managed care oversight in any corrective actions that have been taken to recoup lost revenue from fraud.
“Protecting beneficiaries and ensuring proper stewardship of Medicaid funds remains central to the federal state partnership, and we CMS are ready to eradicate the fraud, waste and abuse happening in New York,” he posted on X. “If we’re not satisfied with their response, we will take corrective action.”
In a statement responding to the letter, the Hochul administration defended its efforts to crack down on fraud and waste in the Medicaid program and accused Republicans of cutting funding for Medicaid programs.
“Well before the Trump administration even took office, Governor Hochul was leading efforts to root out waste, fraud and abuse,” the statement said. “New York will continue to work with the federal government to identify bad actors, just as we did when we partnered with the Justice Department on the successful investigation cited in this letter.”
“But let’s be clear about the real goal for Donald Trump and Washington Republicans: eliminating programs that support our most vulnerable and ripping away healthcare from everyday New Yorkers,” the governor’s office said.
New York Republicans, who have been complaining for years about fraud in the state’s Medicaid program, welcomed the investigation.
“For decades New York’s has had the most expansive Medicaid system in the country, with very little oversight,” Rep. Mike Lawler, R-NY, posted on X Tuesday. “This system needs a complete audit and Dr. Oz is right to demand answers from the state.”
