NEW YORK, NY – October 22, 2026 (STL.News) Federal and New York state authorities have launched a sweeping investigation into suspected Medicaid fraud involving adult day care centers across New York City, with Dr. Mehmet Oz personally confronting operators over questionable billing practices during a coordinated enforcement operation.
The investigation, which intensified on Tuesday, October 20, involves more than 100 social adult day care providers and allegations ranging from improper Medicaid billing and illegal kickbacks to money laundering.
Federal investigators say an audit identified approximately $2.4 billion in Medicaid spending on social adult day care services between January 2019 and October 2024.
Importantly, the $2.4 billion represents total program spending during that period, not an established amount of fraudulent payments. Investigators are working to determine how much, if any, was improperly obtained.
The enforcement operation has raised serious questions about government oversight, the protection of taxpayer dollars, and whether Medicaid-funded programs intended to serve vulnerable older adults have been exploited by dishonest operators.
Dr. Oz Personally Questions Day Care Operators
Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), visited adult day care facilities in Flushing, Queens, accompanied by federal health officials.
During visits to Kent Senior Care and Evergreen Adult Day Care, Oz questioned employees and operators about attendance records, Medicaid reimbursement claims, and transportation services.
Federal officials delivered warning letters to the facilities, notifying operators that their billing practices had raised concerns.
One confrontation focused on transportation charges for seniors who use wheelchairs.
According to Fox News Digital, Oz questioned why billing records showed specialized wheelchair transportation when he did not see wheelchair users during the visit.
“I don’t see any wheelchairs here,” Oz told a facility director.
The absence of wheelchair users during a particular visit does not, by itself, establish that transportation services were improperly billed. Investigators would need to compare claims with transportation records, service dates, and individual beneficiary information.
A facility representative maintained that billing reflected actual attendance, explaining that some seniors participated in programs more frequently than others.
No criminal conviction involving either of the two facilities has been established through the reported enforcement visits.
FBI and State Investigators Search Multiple Locations
While Oz questioned operators in Queens, federal and state investigators conducted enforcement activities at adult day care facilities in several New York City boroughs.
Authorities were observed removing boxes, documents, and computer equipment from facilities in Brooklyn and Queens. Investigators also worked in Manhattan and Staten Island.
The operation involved cooperation among multiple agencies, including the FBI, the U.S. Department of Health and Human Services Office of Inspector General, New York state health authorities and local law enforcement.
Investigators are examining whether providers submitted claims for services they never delivered, inflated attendance records, or engaged in illegal financial arrangements involving Medicaid beneficiaries.
Such schemes can involve several businesses and individuals, making financial records, attendance documentation and payment histories particularly important to investigators.
New York Gov. Kathy Hochul confirmed that the enforcement operation followed months of investigative work.
“We’re targeting providers who we believe engaged in illegal activity, ranging from money laundering to kickbacks to improper billing,” Hochul said.
The governor also acknowledged meeting with Oz in Washington to discuss cooperation between state and federal authorities.
The investigation remains ongoing, and the government has not established that every provider examined committed wrongdoing.
What Does the $2.4 Billion Figure Represent?
The reported $2.4 billion has attracted considerable attention because of its size.
According to the FBI, an audit identified approximately $2.4 billion in Medicaid payments for social adult day care services from January 2019 through October 2024.
That figure is not equivalent to a $2.4 billion criminal fraud loss.
Medicaid pays legitimate providers to deliver qualifying services to eligible beneficiaries. Consequently, investigators must distinguish authorized expenditures from fraudulent or otherwise improper claims.
Federal officials have also raised concerns about New York’s comparatively high Medicaid spending.
The FBI said Medicaid costs per enrollee in New York were estimated at about 40% to 60% above the national average.
Higher spending alone does not demonstrate fraud. Differences in service utilization, eligibility, provider costs, and state program structures can influence Medicaid expenditures.
Nevertheless, federal authorities contend that unusual billing patterns and previously documented criminal cases justify additional scrutiny.
How Adult Day Care Medicaid Fraud Can Work
Social adult day care programs provide supervised activities, meals, social interaction, and other supportive services for qualifying adults.
These programs can help older individuals remain in their communities instead of entering institutional care.
Medicaid funding may support eligible services through state-administered programs.
Fraud can occur when dishonest operators manipulate the reimbursement system.
Potential schemes include billing for participants who never attended, claiming services that were not provided, paying prohibited incentives to attract Medicaid beneficiaries, or submitting inflated transportation claims.
Investigators may also examine whether businesses coordinated their billing practices to conceal improper payments.
However, receiving Medicaid reimbursement, operating several facilities, or providing transportation services does not automatically indicate wrongdoing.
The central question is whether providers delivered the services they claimed and complied with applicable program requirements.
Previous Brooklyn Case Shows Documented Fraud
The current investigation follows earlier federal prosecutions involving Medicaid-funded adult day care operations in New York.
On October 2, 2026, the U.S. Department of Justice announced that Ahsan Ijaz, 29, of Brooklyn, pleaded guilty to conspiracy to commit health care fraud in connection with an approximately $65 million Medicaid fraud scheme.
Federal prosecutors said Ijaz was associated with Happy Family Social Adult Day Care Center Inc., Family Social Adult Day Care Center Inc., and Responsible Care Staffing Inc.
Prosecutors said the businesses paid cash kickbacks and bribes to Medicaid recipients to encourage enrollment and billed Medicaid for services they did not deliver.
Some claims allegedly involved beneficiaries who were outside the United States when the services were supposedly provided.
The Justice Department identified Ijaz as the 10th defendant to plead guilty in connection with that scheme.
His sentencing is scheduled for March 10, 2027, and he faces a statutory maximum penalty of 10 years in prison.
That prosecution shows substantial Medicaid fraud in the adult day care sector.
However, the October 2 guilty plea concerns a separate documented criminal case and should not be interpreted as proof against facilities targeted during the October 20 enforcement operation.
Federal Government Expands Medicaid Oversight
The New York investigation is part of broader federal efforts to identify suspicious health care billing and recover taxpayer money obtained through fraudulent schemes.
CMS has identified adult day care services as an area requiring additional oversight.
In a previous communication concerning New York Medicaid expenditures, CMS highlighted substantial increases in certain adult day care billing categories and raised concerns about possible connections between day care providers and nonemergency medical transportation businesses.
Federal officials identified potential risks involving inflated mileage claims, transportation services that never occurred, and payments for beneficiaries who did not receive the reported care.
The agency also acknowledged that overlapping day care and transportation providers can reflect legitimate coordination of services.
Regulators face the challenge of identifying suspicious billing without disrupting necessary care for eligible participants.
Oz has criticized weaknesses in oversight and called for stronger measures to prevent improper payments.
The October enforcement operation shows that federal authorities are moving beyond financial analysis to direct inspections and coordinated investigations.
New York Officials Promise Stronger Safeguards
Hochul has described the investigation as a joint effort to protect public resources while maintaining essential services for Medicaid beneficiaries.
Her administration has directed additional oversight of the social adult day care program, including a review of payment practices and potential reforms.
The state faces two responsibilities: identifying operators who may have improperly obtained public funds and ensuring legitimate beneficiaries continue receiving necessary care.
Approximately 45,000 Medicaid members statewide depend on social adult day care services, according to reporting by NY1.
Abrupt closures or payment disruptions could create problems for older adults and families who rely on the programs for supervision, meals, and social support.
No evidence indicates that seniors receiving services at the facilities under investigation knowingly participated in fraudulent billing.
What Happens Next in the Investigation?
Investigators are expected to continue examining financial records, attendance documentation, transportation claims, and relationships among providers.
Possible outcomes include administrative sanctions, repayment demands, exclusion from federal health care programs, and criminal charges where sufficient evidence exists.
Federal authorities must establish the facts of each case before determining criminal responsibility.
The investigation could also produce additional recommendations to change Medicaid oversight in New York.
For taxpayers, the case illustrates the importance of auditing large government-funded programs and ensuring payments match legitimate services.
For beneficiaries, the immediate concern is preserving access to necessary care while authorities investigate suspected misconduct.
The confrontation involving Oz and adult day care operators has brought national attention to the issue, but the ultimate scope of the alleged fraud remains undetermined.
As the investigation progresses, the key questions will be how much Medicaid money was improperly paid, who was responsible, and whether stronger safeguards can prevent similar schemes.
The investigation remains active. Allegations against providers that have not been adjudicated should not be treated as findings of criminal wrongdoing.
Sources: New York Gov. Kathy Hochul’s October 2026 announcement concerning the coordinated social adult day care investigation; FBI statements on Medicaid expenditures and enforcement activities; Centers for Medicare & Medicaid Services materials on adult day care oversight; U.S. Department of Justice, October 2, 2026, announcement concerning the $65 million Brooklyn Medicaid fraud guilty plea; Fox News Digital reporting on Dr. Oz’s facility visits; FOX 5 New York, CBS New York and Spectrum News NY1 reporting on the October 20 enforcement operation.
