MILWAUKEE, WISCONSIN - JULY 08: Administrator for the Centers for Medicare & Medicaid Services Dr. Mehmet Oz speaks ahead of U.S. Vice President JD Vance at the 128th Air Refueling Wing Hangar on July 08, 2026 in Milwaukee, Wisconsin. Vance traveled to Milwaukee to deliver remarks on the Trump administration's anti-fraud initiatives.
Photo by Scott Olson/Getty Images
NEW YORK — A number that helped set off a federal fraud investigation into New York's Medicaid program turned out to be off by roughly a factor of ten, according to the very agency that produced it. The admission, made quietly to a wire reporter months after the original accusation went public, has become a case study in how a disputed statistic can still end up driving federal policy — even after it's been walked back.
An "Unheard Of" Number That Wasn't Real
The episode began in a letter and video message from Dr. Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services, announcing a fraud probe into Governor Kathy Hochul's administration and giving the state 30 days to respond. Oz's claim: roughly 5 million New Yorkers had used Medicaid-funded personal care services — home-based help with things like bathing and meal prep — in a single year. That would work out to nearly three-quarters of the state's Medicaid population. Oz called the figure "unheard of" on camera and said New York needed to come clean about how its program was run.
The number didn't survive contact with people who actually track New York's Medicaid data. The Fiscal Policy Institute, an Albany-based think tank, pointed out within weeks that the state's primary home-care benefit, Managed Long-Term Care, has fewer than 400,000 enrollees total — nowhere close to a figure that would require three out of every four Medicaid recipients in the state to be receiving the service.
CMS Concedes the Real Figure
The agency eventually confirmed the mistake. A CMS spokesman told the Associated Press, in the agency's first public acknowledgment of the error, that the true number was closer to 450,000 New Yorkers — between 6% and 7% of enrollees, not three-quarters. CMS attributed the gap to a methodology problem: it had apparently added up separate monthly headcounts as though they represented one annual total, inflating the figure many times over.
Michael Kinnucan, the Fiscal Policy Institute analyst who first raised the alarm, didn't mince words about how the error happened: "These numbers could have been cleared up in a phone call, so it's really slapdash." Despite conceding the number, CMS said its broader review of New York's program integrity was continuing.
A Miscalculation, Then a Funding Cut
The bad math didn't end the confrontation between Washington and Albany — it appears to have been the opening act. Weeks after Hawaii became the first state Medicaid Fraud Control Unit ever decertified by federal regulators on June 4, 2026, the Department of Health and Human Services' Office of Inspector General denied recertification to New York's own fraud unit as well. A June 30 letter from Inspector General T. March Bell suspended roughly $60 million a year in federal grant money for the unit, effective July 1 and running through September 30 — a decision Bell's letter summed up bluntly: "Enough is enough."
Unlike the personal-care dispute, the funding freeze rested on a different set of numbers entirely. Federal investigators pointed to New York's criminal-enforcement record: despite a staff of more than 270 people, the unit secured just eight or nine criminal Medicaid fraud indictments annually in fiscal years 2023 and 2025 — far fewer than comparably sized states, some of which oversee Medicaid programs half New York's size. Investigators also cited a backlog in patient-abuse and neglect cases and said the unit ranked last among five similarly sized peer units on that measure.
That said, the same federal review didn't paint New York as a fraud-fighting failure across the board. HHS-OIG's own reporting has previously credited the state as one of four that account for roughly half of all civil Medicaid fraud recoveries nationwide, and inspectors ranked New York's unit third out of five comparable states on total recoveries even as they flagged its criminal caseload as the weakest link.
Albany Pushes Back — With the Real Numbers
New York Attorney General Letitia James, whose office runs the fraud unit, moved quickly to challenge the funding suspension. In a statement posted to her office's own site, James said her team had recovered more than $627 million for Medicaid since 2019 and noted the same administration had previously praised New York's anti-fraud work. "The only people this decision benefits are the criminals we investigate every day," she said, adding that her office was weighing its legal options. The dispute has also become fodder in James's own re-election campaign, where her Republican opponent, Saritha Komatireddy, has seized on the funding suspension as a line of attack.
New York can still avoid a permanent loss of funding: if the unit submits a corrective-action plan and shows measurable progress before the September 30 deadline, HHS-OIG has said the suspension could be lifted. If the state falls short, New York risks losing its federal Medicaid Fraud Control Unit grant entirely heading into the next fiscal year.
A Pattern Critics Say Goes Beyond New York
Watchdog groups argue the personal-care miscalculation and the funding suspension aren't two unrelated stories. An analysis published by the Center for Economic and Policy Research contends the original error helped set the tone for everything that followed, and situates the New York dispute inside a wider federal push that has already resulted in funding holds against Minnesota's and California's Medicaid programs — all of them run by Democratic administrations. New York's fraud unit remains under federal pressure as part of a much larger undertaking: all 53 Medicaid Fraud Control Units nationwide, covering every state plus Washington, D.C., Puerto Rico and the U.S. Virgin Islands, are currently going through the same kind of federal recertification review.
What It Could Mean for Latino New Yorkers
The dispute lands squarely on a program that a substantial share of New York's Hispanic population depends on. According to the most recent state-level breakdown from KFF, covering 2023, New York's Medicaid program served about 8.67 million people that year, of whom roughly 1.88 million — about 22% — were identified as Hispanic.
New York's Medicaid eligibility and benefits remain unaffected for now — this dispute is about the state's capacity to investigate and prosecute fraud, not about who qualifies for coverage. But advocates for immigrant and low-income communities warn that a prolonged funding standoff, layered on top of an admitted federal miscalculation, risks eroding public trust in a program millions of Latino families rely on for home care, pediatric visits, and treatment of chronic conditions. Because the nationwide MFCU review now touches all 53 units, similar disputes could eventually surface in states with even larger Hispanic Medicaid populations, including Texas, Florida and Arizona — a dynamic worth tracking closely given how heavily mixed-status and low-income Latino households across the country depend on the program.
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