Bold claim: New York’s Medicaid program, worth $124 billion, is about to face the full Oz treatment. Dr. Mehmet Oz, who leads the U.S. Centers for Medicare and Medicaid Services, has launched a formal probe into the state’s expansive Medicaid system, targeting what he describes as waste, fraud, and abuse. He sent a detailed letter to Governor Kathy Hochul with 50 questions about program integrity, provider screening, and enrollment oversight, arguing that the inquiries are essential to protect beneficiaries and restore public confidence.
Key context: Medicaid is a joint federal, state, and local health insurance program for those in need. Oz argues that New York spends far more on Medicaid per person than other states, and overall per resident costs are the highest in the country. He cites figures showing the state’s average spending per beneficiary at $12,528—about 36% above the national average—and notes that New York’s per-capita Medicaid spending is nearly 80% higher than the national average. He attributes these elevated costs to higher enrollment relative to the state’s population, possible fraud, broad benefit structures, and higher provider payment levels compared with most states.
Oz notes that more than 6.8 million New Yorkers, roughly 34% of the population, are covered by Medicaid. He identifies the rapid growth of Medicaid spending as partly driven by a rising number of workers delivering elderly care at home, in adult day care, and in personal care programs.
Further illustrating concerns, Oz references criminal fraud cases prosecuted by the Justice Department, including two Brooklyn individuals who admitted defrauding $68 million from the Medicaid home care program by paying kickbacks for services not rendered at three companies, and another instance where ten defendants were arrested in a home health aide fraud scheme involving billed-but-unprovided services. The investigation also points to state-level losses tied to the Consumer Directed Personal Assistance Program and substantial spending on Social Adult Day Care centers, which some argue duplicate other services and consume up to $400 million annually.
Oz argues these cases expose ongoing gaps in program integrity, especially in home- and community-based service delivery, and calls for structural integrity measures given the scale of services involved. He also flags a 121% uptick in spending on non-medical transportation in the most recent data window and expresses concern that some providers billed for both adult day care and transportation—raising the possibility of coordinated fraud, phantom rides, inflated mileage, or services that never occurred. He also notes seemingly high spending on mental health and psychotherapy services.
Similar probes have occurred in other states, including California and Minnesota. In response, Governor Hochul defended her administration’s anti-fraud efforts, highlighting reforms to CDPAP that she says saved over $2 billion for taxpayers while protecting home care services. Hochul’s office also asserted collaboration with the federal government and the Justice Department on prior investigations to root out bad actors and protect vulnerable New Yorkers. The administration framed Republican opposition as a push to cut health care services funded by Medicaid, arguing that the real aim is to dismantle programs that support the state’s most vulnerable residents.
And this is the part most people miss: aggressive oversight can both deter fraud and safeguard essential care, but it can also spark debate about the best balance between strict enforcement and ensuring access to needed services. Do you think aggressive audits like Oz’s probe help protect taxpayers and recipients, or could they risk overreach or disruptions to care? Share your thoughts in the comments.
