How Medicaid Fraud Enforcement Has Collapsed Under Letitia James: AG Is Letting Criminals ‘Steal With Impunity,’ Rival Claims

The Trump administration’s crackdown on Medicaid fraud is shining a light on New York’s ineffective efforts to stamp out widespread misuse of taxpayer dollars and giving an opening to a long shot Republican seeking to become the state attorney general.Federal and state investigators executed raids last week on about a dozen New York City adult day care centers over significant allegations of waste, abuse, and fraud flourishing within the state. The Justice Department accused the state of failing to take action against Medicaid fraud.The federal action comes after the Department of Health and Human Services Office of Inspector General, this summer, formally denied the recertification of the state’s Medicaid Fraud Control Unit and suspended its federal funding because of its low levels of criminal Medicaid fraud enforcement.The New York Medicaid Fraud Control Unit is a sprawling bureaucracy inside Attorney General Letitia James’s criminal division with seven regional offices. It is billed as the centerpiece of the state’s effort to “investigate, penalize, and prosecute individuals and companies responsible for improper or fraudulent Medicaid billing schemes.”The federal inspector general says the unit receives $60 million in federal funding a year and employs a staff of more than 270, but has repeatedly produced the lowest levels of criminal Medicaid fraud enforcement among large states. The state averaged just nine criminal indictments per year from 2021 to 2025. The inspector general said that just prior to Attorney General Letitia James taking office, the unit averaged more than 100 indictments per year.The Empire Center for Public Policy says a review of federal data found that the unit’s enforcement activities have declined under Ms. James, and that its performance ranks among the worst in the country when adjusted for the scale of New York’s Medicaid spending.It also found that enforcement by the New York’s Office of Medicaid Inspector General has dropped in recent years even as its Medicaid spending soared. It found that the number of audits and the amount of money recovered has declined. From 2019 to 2024, the number of finalized audits dropped from 1,842 to 702, the amount of money recovered fell from $302 million to $220 million, and the total cases referred to other agencies for follow-up dropped from 768 to 431.Republican Saritha Komatireddy, running against Ms. James in the midterm election, is attacking the attorney general’s fraud enforcement, saying it has “totally collapsed” under Ms. James. “As a former federal prosecutor, I know how to investigate complex fraud schemes, prosecute criminals, and recover stolen taxpayer dollars,” Ms. Komatireddy told the Sun.Ms. Komatireddy says if she is elected she will add 20 criminal prosecutors to the Medicaid Fraud Control Unit to pursue fraudsters.“New Yorkers deserve an attorney general who protects their money, instead of allowing criminals to steal it with impunity,” Ms. Komatireddy said. “Every dollar stolen is a dollar taken from hardworking New Yorkers and vulnerable patients who truly depend on these services,” she added.Ms. Komatireddy will have to mount a last-minute surge to defeat Ms. James. A Siena University poll released Wednesday shows Ms. Komatireddy trailing by 15 points in the race despite leading in upstate polling.Ms. James has defended her record. “In Fiscal Year 2026 alone, my office’s Medicaid Fraud Control Unit has secured 59 indictments, 13 convictions, and more than $98 million in recoveries from dozens of civil settlements,” Ms. James said. Governor Kathy Hochul — also up for reelection — has made some moves to combat the fraud after being pressured by the Trump administration. She touted a joint operation with federal authorities to crack down on fraud and abuse in the state’s Medicaid Social Adult Day Care program.Social adult day care centers are one of the biggest areas of fraud. The programs are designed to provide meals, personal care, and social activities to “functionally impaired” adults. Anyone who claims to need assistance with everyday activities can qualify. The center bill Medicaid for services. Reports have found rampant abuse in the industry with seniors being paid kickbacks and billing for more people than a facility can handle. Ms. Hochul says more than 100 providers are under investigation.The owner and program director of a Staten Island adult day care center were indicted and arrested this month. The father and daughter pair is accused of billing Medicaid and long-term care companies for hundreds of seniors that the Staten Island Adult Day Care Center never serviced or intended to serve. Dozens of the “participants” were reportedly dead or outside the country. The pair faces a 457-count indictment with the top charge bringing a potential 15-year prison sentence.Ms. Hochul says she has directed the New York Department of Health to consider phasing out social adult day care as a Medicaid benefit.“New York has zero tolerance for fraud, and when bad actors take advantage of these critical programs, older New Yorkers in need lose out,” Ms. Hochul said.

How Medicaid Fraud Enforcement Has Collapsed Under Letitia James: AG Is Letting Criminals ‘Steal With Impunity,’ Rival Claims

How Medicaid Fraud Enforcement Has Collapsed Under Letitia James: AG Is Letting Criminals ‘Steal With Impunity,’ Rival Claims

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