Source : INDIA TODAY NEWS
The Trump administration said on Tuesday that it would freeze federal funding for New York’s Medicaid Fraud Control Unit, the state agency that investigates and prosecutes fraud in the government health programme. In a letter to New York officials, US Department of Health and Human Services Inspector General Thomas March Bell said the unit had not secured enough criminal indictments and convictions, and that millions of dollars in funding would be suspended through at least September 30.
advertisement
The action is the second suspension of a state Medicaid fraud unit by the Republican administration this year, after a similar move against Hawaii. It is part of a broader anti-fraud drive in the healthcare sector that has included a new task force, targeted investigations, funding deferrals and demands for provider revalidation across states, with much of the focus on Democratic-led states. The funding freeze also comes after the administration acknowledged an error in figures it had earlier used to support a fraud probe into New York’s Medicaid programme.
New York Attorney General Letitia James, a Democrat, said the state would challenge the decision. “During my time as Attorney General, my office has recovered over $627 million for Medicaid and was recognized by this very administration for leading the nation in anti-fraud efforts,” she wrote. “We are considering all legal options to stop this outrageous action.”
In his letter to James and New York MFCU Director Amy Held, Bell said the unit was moving too slowly on cases and had too few indictments and convictions for wrongdoing in the Medicaid system. He said that, compared with four similarly sized units in other states, New York had the lowest number of criminal fraud convictions between 2023 and 2025.
The letter said the state had chosen to focus on “high impact, complex fraud cases” instead of smaller individual cases, and acknowledged that this was one reason for the lower number of criminal convictions. But Bell said that approach had not produced enough results. “Enough is enough,” he wrote. “The New York MFCU has failed to comply with the terms and conditions of its MFCU grant award.” He added that the suspension could be lifted before September 30 if New York took corrective action and showed it had addressed the concerns behind the freeze. If not, he said, the suspension would continue.
New York officials rejected the administration’s claims. The attorney general’s office said it has “long been recognized as a national leader in effectively investigating and prosecuting Medicaid fraud schemes”, including by the HHS inspector general’s office. It pointed to a 2025 report from that office which said New York was one of four states that accounted for half of total civil recoveries that year. A spokesperson for the attorney general’s office said most of the unit’s criminal convictions involve company owners, executives and corporations that return large sums to Medicaid.
New York’s health department also defended the state’s record. “Under the leadership of Governor Kathy Hochul, New York State has taken concrete steps to root out waste, fraud and abuse in Medicaid,” spokesperson Cadence Acquaviva said. “We look forward to the day when these disingenuous attacks end.” Joan Alker, executive director and co-founder of Georgetown University’s Center for Children and Families, questioned the cut. “If you want to fight fraud, don’t take away money from states’ fraud control units,” she said. “I chalk this up to more political theater to distract voters from historic Medicaid cuts before the midterms.”
The move follows months of federal pressure on states over fraud in safety-net programmes, including Medicaid. The administration has asked at least five states, four of them led by Democrats, to share details on how they identify, prevent and address Medicaid fraud. It has also withheld some Medicaid funding from Minnesota and California over fraud concerns. Minnesota Governor Tim Walz, a Democrat and Kamala Harris’ 2024 running mate, accused Trump of acting out of retribution. The administration’s anti-fraud push has also extended to Medicare, with Dr Mehmet Oz, who heads the federal Centers for Medicare and Medicaid Services, announcing a six-month moratorium on new enrolments for hospice and home care providers nationwide.
The funding freeze on New York’s Medicaid Fraud Control Unit has therefore become part of a wider federal crackdown on alleged healthcare fraud, even as New York says its record shows strong enforcement and vows to contest the suspension.
With PTI Inputs
– Ends
SOURCE :- TIMES OF INDIA
