New York’s governor is weighing the shutdown of a $500 million Medicaid adult day care benefit after raids hit more than 100 providers across the state.
Story Highlights
- More than 100 adult day care providers were targeted in fraud searches across New York.
- A state audit flagged $285 million in questionable payments out of $2.4 billion since 2019.
- Federal cases show kickbacks and billing for services not provided, including a $65 million plea.
- New York’s reported costs ran 40% to 60% above national averages, signaling risk.
Governor Signals Possible Shutdown After Sweeping Raids
Governor Kathy Hochul said investigators searched more than 100 social adult day care providers across New York as part of a coordinated Medicaid fraud probe. Agents removed records, computers, and boxes from multiple sites. Hochul said targets were suspected of money laundering, kickbacks, improper billing, and other fraud. She directed state health officials to review the program’s future, including a potential end to the benefit. The investigation is ongoing, and not all providers have been charged.
State activity followed a February audit by New York State Comptroller Thomas DiNapoli. Managed-care plans paid about $2.4 billion for social adult day care services from January 2019 through October 2024. The audit identified about $285 million in questionable payments, including more than $28.6 million to centers that had been terminated for cause from at least one plan network. The findings point to weak oversight and conflicts in provider status controls.
Concrete Fraud Evidence From Federal Prosecutions
Federal prosecutions have already shown what some schemes looked like. The United States Department of Justice reported that Ahsan Ijaz pleaded guilty to defrauding New York Medicaid of about $65 million. Court documents described claims for services not provided, cash kickbacks to beneficiaries, and billing for people who were not even in the United States when services were supposedly delivered. These facts show real, adjudicated conduct beyond mere allegations.
In a separate case, the Justice Department charged eight defendants in an alleged $38 million scheme tied to social adult day care services. The charges described billing for medically unnecessary or nonexistent services, kickbacks, and daily claims for hundreds of beneficiaries at sites permitted for only 30 people. The scope and tactics outline how abuse can scale inside a loose oversight system.
Cost Anomalies and Oversight Gaps Put Taxpayers at Risk
Federal Bureau of Investigation reporting said New York’s Medicaid costs for social adult day care ran 40% to 60% higher than national levels, a sign of systemic risk. While the comparison’s method was not detailed in public reports, the gap raised red flags for investigators and lawmakers. Higher costs do not prove fraud by themselves, but when paired with kickback cases and audit flags, they point to a program design that invites abuse.
JUST IN: New York Gov. Kathy Hochul has directed the state Department of Health to consider ending the state’s Medicaid social adult day care benefit.
The directive came on the same day that state and federal investigators carried out a crackdown on providers suspected of fraud,…
— The Epoch Times (@EpochTimes) October 22, 2026
The audit cited weak communication about terminated providers, questionable encounter payments, and plan-level control failures. That means the problem is not only bad actors but also gaps in how the state and managed-care plans track eligibility, verify attendance, and stop payments. Those weaknesses matter for seniors who need real services and for taxpayers who expect tight oversight. Stronger controls, tighter eligibility checks, and real-time verification could reduce waste while keeping care for those who qualify.
What Ending the Program Would Mean
Ending the benefit would cut off a path that providers allegedly used to siphon money. It would also disrupt a service that some older adults use for meals, supervision, and activities during the day. Officials have not released a final plan. The state could choose targeted enforcement instead: exclude bad actors, demand repayment, require attendance verification, and hold managed-care plans accountable for improper claims. The decision now sits with state health leaders at Hochul’s direction.
Where This Leaves Conservative Taxpayers
Taxpayers saw raids, a $2.4 billion spend over five years, and clear evidence of kickbacks in federal cases. That is enough to demand action. New York can protect seniors and stop fraud at the same time. The best test is simple: pay only for services delivered to eligible members, at approved sites, with real attendance records. If the state cannot enforce that standard, then ending the benefit may be the only way to stop the bleeding and defend the public’s dollar.
Sources:
zerohedge.com, justice.gov, fox5ny.com, vinnews.com, ntd.com
