Flushing, a predominantly East Asian immigrant neighborhood in Queens, New York, has become a focal point for allegations of widespread Medicaid fraud, with numerous Social Adult Daycares (SADCs) accused of billing the state over $100 million annually. An investigation by the New York Post revealed that 77 SADCs operate within a one-mile radius of the neighborhood, accounting for 14 percent of the state's total daycare spending. These facilities, which are private businesses, have collectively billed Medicaid an estimated $733 million between 2018 and 2024.
During site visits to several of the largest SADCs, which have claimed between $20 million and $40 million from Medicaid over the past six years, many were found to have shuttered storefronts or empty rooms with no patients. At Livingwell Day Care, lights were dimmed in a mess hall with empty tables, and no seniors were present. The facility has billed Medicaid approximately $27 million from 2018 to 2024, listing over 26,500 patients, according to federal data. Staff at Livingwell refused to answer questions and attempted to remove reporters from the premises.
Similarly, Bao Kang Adult Day Care, which reportedly billed $32 million to Medicaid for serving 43,900 unique patients during the same period, appeared empty. A worker stated she did not know the number of patients but denied a tour, while security monitors showed empty common areas.
These observations come after a federal investigation in February led to charges against two men for allegedly defrauding Medicaid of $120 million over ten years using two SADCs in Flushing. Following this, workers at other facilities have reportedly been on high alert, with entrances locked during business hours and windows covered.
Other facilities identified by the investigation include Merry Adult Day Care ($25 million billed for 31,500 patients), Kang Hua ($22 million for 25,800 patients), Greater New York Social and Health ($28 million for 32,500 patients), Evergreen Adult Day Care ($32 million for 57,500 patients), and Sunrise Senior Service ($45 million for 56,800 patients). None of these specific facilities have been accused of fraud.
Local sources suggest that corruption and kickbacks are common practices. Kenny Chan, owner of a local pharmacy, described how seniors inquire about "benefits," a local term for illegal kickbacks, where seniors receive a portion of the Medicaid billing. Chan stated that he has lost business by not participating in these alleged schemes, which he believes involve a significant percentage of new pharmacies and daycare centers.
Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz criticized New York officials for inadequate oversight, stating that these centers have become "cash cows for criminal syndicates." He pointed to Flushing's high proportion of SADC spending as evidence that the centers may not solely be fulfilling a legitimate community need.
New York State Senator John Liu, representing Flushing, suggested that the proliferation of these centers might be an attempt to fill a void in resources for the area's large elderly population. He cautioned against generalizing about all centers, noting there is only one city-run senior center in downtown Flushing.
Social Adult Day Care centers are intended for seniors with chronic illnesses or disabilities who require a nursing home level of care or assistance with daily living activities. However, investigations have found many SADCs indistinguishable from regular senior centers, offering meals and entertainment funded by taxpayers to healthy and active seniors.