Adult day-care centers in Flushing, New York, have come under scrutiny for alleged Medicaid fraud, with reports indicating significant misuse of funds intended for patient care. Despite previous investigations and public attention, recent visits to these centers suggest little progress in addressing the issue.
In January, investigations revealed that numerous social adult day-care centers (SADCs) in Flushing were receiving Medicaid payments while providing minimal or no actual services to patients. The concentration of these centers in a small area has raised concerns about systemic abuse of Medicaid funds. At least 77 centers operate within a one-mile radius, collectively billing approximately $733 million in Medicaid services from 2018 to 2024.
Mehmet Oz, appointed as a federal Medicaid official during the Trump administration, visited Flushing and highlighted the dense cluster of centers, describing the situation as "hundreds of millions of dollars of illegal profits" being generated. His team has threatened to withhold federal payments to New York state over ongoing concerns of fraud linked to these facilities. Oz criticized what he terms a "lack of proper state oversight," asserting that these centers have become lucrative enterprises for criminal organizations.
Despite these allegations and the substantial Medicaid revenue involved, many of the centers remain either closed or largely inactive, with few patients present. A recent onsite review found conditions largely unchanged compared to earlier reports six months prior, indicating limited enforcement or corrective action.
New York State Attorney General Tish James oversees the Medicaid fraud unit, but her office ranks 49th nationwide in investigations per billion dollars of Medicaid expenditure. This low rate of probes has drawn criticism amid the ongoing controversies surrounding the adult day-care centers.
In contrast, state Senator John Liu, who represents the Flushing area, has downplayed the scale of fraud in his district. Liu described labeling Flushing as a focal point of Medicaid abuse as "misguided," and questioned the extent to which fraud actually exists there.
The situation highlights a complex challenge for New York officials tasked with oversight of Medicaid funding, amid allegations of widespread abuse, significant financial losses, and divergent perspectives among local political leaders.