Federal raids on senior day care centers across New York City have renewed scrutiny of extraordinary growth in Medicaid billing, particularly in Flushing, Queens, where the number of seniors billed for services increased 390 percent between 2018 and 2024, despite the area’s Medicaid-eligible senior population growing by only 20 percent.
The Oct. 20 crackdown involved federal, state, and local authorities investigating suspected fraudulent billing, illegal kickbacks, and money laundering. More than 100 providers are under investigation, while federal health officials conducted over 80 visits to facilities across the city.
The enforcement operation follows earlier investigations that uncovered hundreds of millions of dollars in questionable Medicaid payments and serious deficiencies in state oversight. The findings have raised questions about how New York’s rapidly expanding adult day care industry was monitored and whether taxpayer-funded services were actually delivered.
Medicaid billing surges as senior population grows modestly
A CBS News investigation published July 1 found an unusually high concentration of Medicaid-funded social adult day care centers in Flushing, a Queens neighborhood with a substantial Chinese immigrant population.
According to CBS’s analysis of Medicaid data, 64 facilities operated within a one-mile radius, making Flushing the most densely concentrated area for such centers in the United States.
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The investigation revealed a striking discrepancy between population growth and Medicaid billing.
Between 2018 and 2024, the area’s Medicaid-eligible senior population increased approximately 20 percent. During the same period, the number of seniors billed for adult day care services surged 390 percent.
Collectively, facilities in Flushing billed Medicaid for the equivalent of more than 90 percent of the neighborhood’s Medicaid-eligible seniors. That comparison does not necessarily mean all those individuals lived in the neighborhood or that the claims were fraudulent.
Nevertheless, the figures have drawn the attention of federal investigators.
“How many social adult daycare centers do you need?” Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), asked CBS News.
The spending increase extends beyond Flushing.
CBS found that Medicaid paid adult day care providers approximately $3.35 billion nationwide in 2024. New York’s 375 facilities accounted for 17 percent of that spending, the largest share of any state.
Statewide spending on the services nearly quadrupled between 2018 and 2024.
The New York State Department of Health defended its oversight record, telling CBS that the administration had taken “strong action in recent years to control costs” and address potential abuses.
The department said it had strengthened monitoring procedures and implemented additional compliance requirements.
However, the dramatic increase in billing has left investigators examining whether the industry’s expansion reflects legitimate demand for services or improper claims against Medicaid.
Federal raids uncover questionable attendance and billing records
The concerns intensified on Oct. 20 when federal authorities launched coordinated enforcement operations across New York City.
According to Fox News, which accompanied Oz during inspections, the CMS administrator personally visited Kent Senior Care and Evergreen Adult Day Care in Flushing, questioning operators about apparent inconsistencies in their records.
At Kent Senior Care, Oz challenged the facility’s Medicaid claims after observing considerably fewer seniors than its billing records appeared to indicate.
“The bills are much higher than they should be,” Oz told the center’s director.
The director responded that investigators had arrived early and additional participants were expected later.
Oz also questioned why the facility appeared to be billing for five days of attendance when some seniors reportedly participated only two or three days per week.
The director maintained that the center billed only for actual attendance.
Additional questions arose over specialized wheelchair transportation charges. Investigators observed no seniors using wheelchairs during their visit, although the facility’s billing records included charges for wheelchair-related transportation.
The director suggested that incorrect codes might have resulted from staff copying outdated information.
“Probably he just copy and pasted,” the director explained.
At Evergreen Adult Day Care, a manager reported that approximately 200 seniors attended on Mondays, Wednesdays, and Fridays, with about 150 participating on Tuesdays and Thursdays.
Oz said he observed only around 25 people during his inspection.
“The numbers don’t seem to add up,” he said.
The manager disputed the assessment, explaining that some seniors were attending classes elsewhere in the building while others had left for appointments or errands.
Fox News also reported finding attendance sheets containing names for Oct. 22 and 23, although the inspection took place on Oct. 20. The news outlet could not immediately establish whether those entries represented advance schedules or falsified attendance records.
The discrepancies have prompted further scrutiny, although the observations alone do not establish criminal wrongdoing.
Federal investigators must determine whether the records reflect legitimate services, administrative mistakes, or deliberate attempts to obtain improper Medicaid payments.
State audit identified $285 million in questionable payments
The October raids followed significant concerns raised months earlier by New York’s own financial watchdog.
A February audit by State Comptroller Thomas DiNapoli identified more than $285 million in questionable Medicaid payments associated with social adult day care facilities.
Auditors found that payments had continued for services dated after facilities were removed from at least one managed long-term care network.
Of that amount, more than $28.6 million involved facilities terminated for cause, including concerns about fraud, waste, abuse, program integrity, or quality.
The audit also identified approximately $1.3 million in improper payments associated with inadequate service documentation at three facilities.
Investigators examined 92,969 claims and found that 7,964, worth approximately $672,147, lacked supporting attendance records.
In another case, auditors identified a Flushing facility with an authorized capacity of 323 people that submitted claims for 530 participants on a single day.
Those claims generated $47,255 in Medicaid payments.
The findings raised questions about whether existing monitoring systems could reliably verify that facilities provided the services for which they sought reimbursement.
In a Feb. 19 statement, DiNapoli warned that “without stronger oversight from the Department of Health,” both vulnerable seniors and taxpayer funds could be placed at risk.
His office also assisted federal investigators in a separate criminal case involving an alleged $120 million Medicare and Medicaid fraud operation connected to adult day care centers and pharmacies.
Despite the audit’s findings, state officials maintained that New York had established substantial safeguards.
State Health Commissioner Dr. James McDonald said New York possessed “among the strongest oversight and program integrity systems in the nation.”
The differing assessments highlight a central question in the expanding investigation: whether existing oversight systems were sufficient to detect improper billing before significant public funds were distributed.
The comptroller’s findings do not establish that the entire $285 million represented fraud. However, they identify weaknesses in documentation, payment controls, and communication between healthcare plans that investigators say require corrective action.
New York considers major reforms as fraud prosecutions mount
The growing scrutiny has prompted Gov. Kathy Hochul to consider significant changes to New York’s social adult day care program.
In an Oct. 20 announcement, Hochul confirmed that state and federal authorities were investigating more than 100 providers suspected of potential fraud or illegal activity.
“New York has zero tolerance for fraud,” Hochul said.
The governor announced additional payment reviews, potential reimbursement suspensions, and a broader assessment of whether the program should continue operating in its current form.
New York had already imposed a moratorium on new social adult day care providers in July. That restriction remains in effect until January 2027 and could be extended.
Hochul has directed the state Health Department to recommend further reforms by Dec. 31, including the possibility of phasing out the benefit and transferring eligible seniors to alternative services.
According to the governor’s office, more than 400 social adult day care programs currently serve approximately 45,000 Medicaid recipients statewide, at an estimated annual cost exceeding $500 million.
State officials say they reviewed 418 programs for compliance in 2025. Between 2021 and 2025, the Office of the Medicaid Inspector General investigated 387 subjects connected to adult day care operations and referred approximately 100 cases for potential criminal prosecution.
Attorney General Letitia James acknowledged the value of legitimate senior care programs but said facilities should focus on serving vulnerable residents, “not generating fraudulent profits for their owners.”
Several recent federal prosecutions have demonstrated how substantial the losses from Medicaid fraud can become.
On Oct. 2, the Justice Department announced that Ahsan Ijaz, a 29-year-old Brooklyn businessman, had pleaded guilty in connection with an approximately $65 million Medicaid fraud scheme.
Prosecutors said businesses associated with Ijaz paid cash kickbacks to Medicaid recipients, then submitted claims for services that were never provided. Some claims involved individuals who were outside the United States when the services supposedly occurred.
In September, another defendant involved in the same broader operation, Zakia Khan, was sentenced to 76 months in prison. Authorities said her businesses fraudulently billed Medicaid approximately $64 million.
Separately, federal prosecutors charged two Queens men in February over an alleged $120 million Medicare and Medicaid scheme involving illegal kickbacks and claims for services never delivered.
Assistant Attorney General A. Tysen Duva said the defendants allegedly turned facilities intended to serve seniors into a “$120 million dollar Medicare and Medicaid fraud scheme.”
The criminal prosecutions establish that significant fraud has occurred within the industry, but they do not prove wrongdoing by every facility currently under investigation.
State Health Commissioner McDonald said that throughout the review process, “protecting older adults and maintaining care will remain our priority.”
For federal investigators, the central challenge is determining how much of the extraordinary growth in Medicaid billing represents legitimate services and how much may have resulted from fraud.
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