Why Kathy Hochul & NY Dems fear questions about Medicaid fraud

Gov. Kathy Hochul denounces the federal probes of New York’s Medicaid outlays as politically motivated, but Empire Center health expert Bill Hammond lays out state Democrats’ political motives for squelching any investigation.

“The governor and other top state officials rely heavily on political support — and campaign donations — from Medicaid-funded health-care interests,” notes Hammond.

In other words, US Medicaid czar Dr. Mehmet Oz’s search for Medicaid fraud could kill their golden goose.

New York’s vast Medicaid spending is a big fat target for fraudsters: As Hammond notes, it’s the nation’s most costly Medicaid program, shelling out $4,492 per state resident in 2024 — 77% more than the national average and 24% more than No. 2 spender Kentucky — partly because it offers benefits far above the poverty line.

Now look at how that money is spent, and who it benefits.

The state’s Consumer Directed Personal Assistance Program, funding home care aides, has shot up to nearly $15 billion a year, as these aides “now outnumber the combined total of retail clerks and fast-food counter workers” in New York.

And Hochul’s bid to “reform” it is being probed for bid-rigging of the contract with Public Partnerships LLC, the company Hochul hired to oversee CDPAP in the name of cost control.

New York also uses hundreds of millions of Medicaid dollars to subsidize health insurance for SEIU 1199 members; other grants fund lobbying for more Medicaid spending.

And some cash goes to “politically connected” groups that don’t even pretend to provide direct care for patients: E.g., Somos Community Care — which offers back-office services to physicians but gets tens of millions in Medicaid cash — has funneled $51 million in “consulting fees” to “Henry Munoz, a former vice chair of the Democratic National Committee with no previous background in health care.”

Meanwhile, nursing homes that seem to barely break even simultaneously pay tens of millions for services and rent to firms with “the same or overlapping” ownership.

And the state barely tries to ferret out Medicaid corruption.

The main investigator is the Medical Fraud Control Unit in the state Attorney General’s Office: From 2020 through 2024, reports Hammond, it completed an average of just eight probes per billion dollars spent — “the third lowest among the 50 states” and 63% below the US average.

And now the Democratic-controlled state Senate is pushing “reforms” to “arguably hamstring” the Office of the Medicaid Inspector General, which can audit hospitals, nursing homes and other care providers.

A lot of beaks are dipped in the state’s Medicaid pool — and New York’s political class wants to keep it that way.

Federal investigators can’t dig fast, or deeply, enough.