New York Governor Kathy Hochul has ordered the state Department of Health to evaluate ending the Medicaid social adult day care program, citing ongoing fraud and abuse. The directive follows a coordinated crackdown by state and federal investigators targeting suspected fraud in the program, which serves over 45,000 Medicaid members annually at a cost exceeding $500 million. Hochul emphasized the need to address 'fraud, waste, and abuse' and has directed the department to consider alternatives such as shifting participants to other services for older New Yorkers. The recommendations are due by December 31.
Social adult day care is a non-medical benefit offered through New York's Medicaid managed long-term care program, providing daytime supervision, meals, and social activities. The federal Centers for Medicare & Medicaid Services (CMS) approves and funds the program. The recent action follows a months-long investigation involving multiple state and federal agencies, including the FBI and the Office of the Medicaid Inspector General. FBI agents raided programs across New York City on October 20, marking what CMS Administrator Dr. Mehmet Oz called the largest enforcement action of its kind.
Hochul also announced 16 arrests in a separate auto insurance fraud investigation, which involved nearly $500,000 in fraudulent claims. She highlighted that New Yorkers pay about $4,000 annually for auto insurance, significantly above the national average, and expects reforms to lower rates. The crackdown on adult day care fraud includes requiring health plans to review claims before payment and pursuing suspensions. A moratorium on new providers remains in place until January 2027, potentially extending further.
The program has faced scrutiny in past audits, with state Comptroller Thomas DiNapoli finding over $2.4 billion in payments for adult day care services from 2019 to 2024. Payments increased by over 141% between 2021 and 2023, with auditors identifying $285 million in questionable payments. One audit case revealed a Flushing center billing for 530 people on a single day despite a legal capacity of 323. The Health Department has disputed the audit's findings, but the comptroller's office called the response misleading. Recent convictions in Brooklyn for a $68 million fraud scheme further underscore the program's vulnerabilities.
Hochul faces Republican Bruce Blakeman in the November 3 governor's race, though Blakeman's campaign and CMS did not respond to requests for comment. The governor's office stated that the decision to end the benefit would require federal approval, and the Health Department will advise on potential alternatives for participants.