New York is weighing whether to scrap a Medicaid adult day care benefit after raids hit more than 100 providers and prosecutors exposed schemes with fake visits, kickbacks, and cash.
Story Snapshot
- Raids targeted over 100 social adult day care providers across New York.
- A state audit flagged $285 million in questionable payments within $2.4 billion spent.
- Federal cases showed kickbacks and billing for services never provided.
- The governor is considering ending the benefit to protect taxpayers.
New York’s Sweeping Probe And A Costly Program Under Fire
Governor Kathy Hochul said federal, state, and local teams searched adult day care sites across the state and removed records and computers. The operation focused on more than 100 providers tied to the Medicaid social adult day care benefit, which pays for meals, supervision, and social programs for older adults. The scope signals a system problem, not a one-off scam. The governor’s office framed the effort as a months-long push to stop money laundering, kickbacks, and improper billing in the program.
A recent audit by the New York State Comptroller sharpened the concern. Managed-care plans paid about $2.4 billion for these services from January 2019 through October 2024, and auditors questioned $285 million of those payments. The audit said plans even kept paying some centers after termination, including more than $28.6 million to providers removed for cause. Those findings point to control failures at plans and the state, not just bad actors in the field.
Prosecutors Describe Kickbacks, Ghost Visits, And Packed Rooms
Federal prosecutors have already secured a guilty plea from a social adult day care owner who admitted to defrauding New York Medicaid of about $65 million. Court papers said the scheme paid cash kickbacks to bring in recipients and billed for people who were not even in the United States when services were supposedly delivered. Prosecutors also charged eight defendants in an alleged $38 million scam that billed hundreds of people per day at sites with room for only 30.
These cases show how the grift works in practice: recruiters bring in “patients,” centers claim nonmedical services as if they were essential, and bills fly through managed-care pipes. The Federal Bureau of Investigation reported that New York’s costs for social adult day care ran 40 to 60 percent higher than national figures, a red flag for systemic abuse and loose oversight. When cash payments to seniors join soft documentation, fraud becomes easy and fast.
What Ending The Benefit Would Mean For Seniors And Taxpayers
Ending the benefit would cut off a payment stream that fraudsters can game. It would also affect seniors who use legitimate centers for meals, safety, and social contact. Lawful centers exist; the audit did not claim every dollar was crooked. But the mix of weak controls and proven scams makes the program a soft target for theft. Conservative common sense says you do not keep paying into a bucket full of holes when you can fix the bucket or replace it.
Two indicted on 457 counts for an alleged healthcare fraud operation in New York.
The mother-daughter duo are accused of fraudulently billing Medicaid over $530,000 through their adult day care in Staten Island.
The top count of health care fraud in the second degree carries up… pic.twitter.com/ojnNzDCeOL
— Jason Blair (@JasonBlair) October 22, 2026
The cleanest path is a hard choice. The state can end the benefit and replace it with tighter options, like smaller grants tied to verified attendance or home-care supports that require time-stamped, location-locked check-ins. Or it can keep the benefit and install strict guardrails: live rosters, real-time swipe-in systems, camera-verified head counts, referral audits, and prepayment review for outlier claims. The raids show urgency; the guilty pleas show proof; the audit shows where controls failed.
The Oversight Fix List If Albany Keeps The Program
First, block payments the moment a plan terminates a provider. Build a single provider-status hub that all managed-care plans must query before paying a claim. Second, require daily attendance logs matched to transportation and meals, with recipients confirming visits by phone or text. Third, ban third-party marketers and enforce no-kickback attestations with random checks. Fourth, cap daily headcounts to licensed occupancy and flag claims that exceed it for prepayment review.
Fifth, use data to hunt for rings. Link owners, referral sources, and recipients across centers to spot shared addresses, phone numbers, or bank accounts. Sixth, claw back improper payments fast and publish recoveries. When thieves see real risk, they move on. These steps do not punish honest providers. They protect them. They also protect seniors who want safe, lawful care. Raids alone cannot rebuild trust. Clear rules and hard controls can, and they should start now.
Sources:
zerohedge.com, justice.gov, fox5ny.com, vinnews.com
