The House Energy and Commerce Committee accused New York on Tuesday of flouting federal law by failing to designate risk levels for Medicaid service providers, exposing the state-level program to potential taxpayer fraud. In an 87-page report published by the Republican-led panel, investigators concluded that the Empire State did not comply with federal regulations requiring categorical risk designations for all Medicaid-only providers.
House Panel Cites New York Medicaid Lapses
New York state counsel disclosed to the House panel that the state does not designate categorical risk levels for all Medicaid-only providers, according to committee findings. The report noted that New York only recently began the process of elevating three designated provider types into high-risk categories. Investigators emphasized concern that the nation’s second-largest Medicaid program spent nearly $98.2 billion in fiscal year 2024 and $12,528 per enrollee in fiscal year 2023 while lacking full compliance with federal oversight rules.
In response to the congressional investigation, New York paused enrollment for a six-month period across several programs. Affected sectors include home health care agencies, adult day cares, and applied behavioral analysis providers. Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz has been actively probing New York’s system, though officials have not yet determined the exact total of taxpayer funding diverted for fraudulent purposes.
National Scrutiny on State Medicaid Spending
Medicaid spending constitutes the largest category of state budgets, averaging 30.7% of total funding, the House report stated. Committee Chairman Brett Guthrie (R-Ky.) said in a statement that every dollar stolen from Medicare and Medicaid takes resources away from seniors, children, pregnant women, and Americans with disabilities.
Alongside New York, the House panel investigated California, Colorado, Maine, Vermont, Massachusetts, Pennsylvania, Nebraska, Oregon, and Washington State. Health and Human Services Secretary Robert F. Kennedy Jr. attributed ballooning program costs and lax safeguards to understaffing, noting that just six employees staffed the Department of Health and Human Services program integrity office between January 2021 and January 2025.
Ballooning Budgets and Vulnerable Services
Several state programs experienced steep spending surges prior to recent federal inquiries. The panel’s report noted that Medi-Cal expenditures in California rose from an annual $83 billion in 2014 to $219.7 billion by 2027. Investigators identified high rates of fraud within non-emergency medical transportation, adult day care, applied behavioral analysis, substance use disorder treatments, and home and community-based services.
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The House Energy and Commerce Committee report indicated that a rapid expansion of benefits via HCBS Section 1915(c) waivers led to soaring program costs and left Medicaid susceptible to fraud due to a lack of adequate programmatic safeguards. Additionally, Medicare programs faced elevated fraud flags in hospice, home health care, durable medical equipment, and genetic testing.
Rep. John Joyce (R-Pa.), who chairs the Energy and Commerce Subcommittee on Oversight and Investigations, stressed that protecting program integrity is a shared goal. Representatives for New York Gov. Kathy Hochul’s office did not immediately respond to a request for comment on the committee’s findings.
White House Anti-Fraud Efforts
The findings mirror separate waste and abuse investigations conducted by the White House anti-fraud task force led by Vice President JD Vance. To date, the task force has identified $96.4 billion in fraudulently obtained funding from Health and Human Services programs, halted $46.2 billion from improper distribution, and successfully recovered $33.1 billion by the Trump administration.
Common Questions About the Medicaid Investigation
Why is the House committee investigating New York Medicaid?
The House Energy and Commerce Committee investigated New York and nine other states for potential fraud and compliance failures regarding federal mandates to designate provider risk levels.
What specific New York programs faced enrollment pauses?
In response to the federal probe, New York paused enrollment for six months in programs including home health care agencies, adult day cares, and applied behavioral analysis.
How much does New York spend on Medicaid?
According to the congressional report, New York spent nearly $98.2 billion on Medicaid in fiscal year 2024, translating to $12,528 per enrollee in fiscal year 2023.
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