New York Medicaid Program Placed Under CMS Microscope Over Fraud Concerns Involving Home Health-Related Services

In a March 3 letter^[1] addressed to Gov. Kathy Hochul, CMS Administrator Dr, Mehmet Oz raised pointed concerns about fraud, waste and abuse (“FWA”) within New York’s Medicaid Program involving payments for home health-related services.

In his letter, Dr. Oz states:

Recent public reporting, federal prosecutions, and CMS analyses raise serious concerns about New York’s oversight of personal care, home health, adult day care programming, non-emergency medical transportation (NEMT), and behavioral health services. This evidence, combined with New York’s elevated per capita Medicaid spending and workforce utilization patterns that significantly exceed national norms, underscore the need for immediate investigation, corrective action, and enhanced transparency.

The letter proceeds to review data comparing Medicaid costs in New York to the national average, concluding that “New York far outspends other states on its Medicaid program on a statewide and per beneficiary basis.”

In support, the letter notes that New York’s program costs over $90 billion annually, which is “the second highest in the nation” and that average spending per beneficiary “is $12,528—36% higher than the national average.” The letter attributes these “elevated costs” to “more New Yorkers enrolled in Medicaid relative to the state’s population, potential fraud, expansive benefit structures, and excessive provider payment levels within New York’s program compared with most other states.” In addition to enrollment, the letter focuses on the workforce delivering long-term care in New York, noting that in the home health and personal care sectors specifically, workforce increases “represented 38 percent of all job growth in New York” between 2023 and 2024.

The letter concludes that “New York’s significant Medicaid spending has resulted in a large long-term care workforce that, when combined with the vulnerabilities inherent in community-based services, create a high-risk environment for FWA.” The letter then proceeds to review certain recent New York federal enforcement actions in the home health industry involving kickbacks and services not rendered. The letter cites an analysis performed by CMS of statistical data specific to the home health service sectors in question, commenting that the CMS analysis “reveal[s] alarming spending patterns, rapid growth in high-risk service categories, and significant provider concentration that warrant immediate state attention and corrective action.” The letter noted that personal care services “represent an extraordinary concentration of Medicaid spending in New York” accounting for “$44.6 billion in total payments from 2023 through 2025 (partial).” The partial 2025 data revealed that “nearly three out of every four Medicaid beneficiaries received personal care services during that time.” The letter states that the combined high volume of claims and high concentration of providers “presents inherent risk for overbilling, documentation inadequacies, and additional claims billing spikes.” The letter expresses similar FWA concerns in the area of home health aide services, noting that these claims “demonstrate accelerating expenditure growth vastly outpacing population growth” and that in 2023 and 2024, “home health aide services’ total payments increased a remarkable 65% from each prior year . . . while 2023 and 2024 beneficiary counts grew less than 45% from each prior year.”

The letter ends by requesting that within 30 days (pending any extension request) New York provide written responses and supporting documentation to dozens of highly detailed questions probing the adequacy of the state’s Medicaid program oversight in four categories: Fraud Waste, Abuse and Improper Payments; Provider Screening, Enrollment and Revalidation; Program Integrity Infrastructure and Accountability; and Targeted Oversight Question to Address High-Risk Billing Patterns and Systemic Vulnerabilities in New York State Medicaid.

The Dr. Oz letter very likely portends increased enforcement scrutiny of New York Medicaid providers, especially those who submit claims for home health, personal care and/or related services. Now, with the assistance of outside compliance counsel, would be a good time to review your FWA controls and billing/coding protocols to ensure that your organization is not the target of intensifying enforcement efforts.

[1] Letter of Dr. Mehmet Oz to Gov. Kathy Hochus, dated March 3, 2026.