New York politicians are failing to address substantial Medicaid fraud within the state's adult day-care centers and may be actively concealing it, according to recent reports. Despite public exposure and federal scrutiny, the situation in facilities, particularly in Flushing, Queens, appears to have seen little change.
In January, an investigation revealed numerous social adult day-care centers (SADCs) receiving Medicaid funds without providing adequate services. Following this, former Trump administration official Mehmet Oz visited Flushing, highlighting the dense concentration of these centers and estimating that "hundreds of millions of dollars" in potential fraud were occurring. The Trump administration had previously threatened to withhold federal payments due to concerns over fraud.
A recent follow-up visit found many of the 77 SADCs in the one-mile radius in Flushing still operating with minimal patient presence or appearing shuttered, mirroring observations from six months prior. This lack of apparent change persists even with federal attention.
These Flushing SADCs collectively billed Medicaid approximately $733 million for services between 2018 and 2024. For example, Livingwell Day Care reportedly billed $27 million for 26,500 patients, while Bao Kang Adult Day Care billed $32 million for 43,900 patients over the same period. Despite these billing figures, visits to Livingwell Day Care revealed dimmed lights and an empty mess hall, and Bao Kang Adult Day Care showed empty common areas, although a worker claimed to serve 200 people daily.
Medicaid regulations stipulate that SADCs should serve individuals with chronic illnesses or disabilities. However, many of the examined Flushing facilities appear to offer services comparable to general senior centers, raising questions about eligibility and necessity.
Former officials have criticized the "lack of proper state oversight," suggesting these centers have become lucrative targets for "criminal syndicates." Governor Kathy Hochul, Attorney General Letitia James, and state Sen. John Liu, who represents the area, have been accused of downplaying the issue. Liu has publicly stated that it would be "misguided to . . . paint Flushing as the epicenter of this kind of fraud, if it exists."
Reports indicate that New York officials have been reluctant to release Medicaid billing information publicly, requiring federal data acquisition for investigations. Critics argue that state leaders may be motivated by the federal government's significant contribution to Medicaid costs, viewing increased state billing, even through fraudulent means, as a way to secure more federal funding for New York. This practice, however, directs taxpayer money to illicit actors, according to the findings.