A House committee report says New York failed to designate Medicaid provider risk levels required by federal law, a gap the panel warns leaves taxpayers exposed to fraud.
The Republican-led House Energy and Commerce Committee concluded in an 87-page Tuesday report that New York was not complying with federal rules on designating risk levels for Medicaid service providers, the kind of screening meant to flag operations that could bilk the taxpayer-funded program.
New York runs the nation’s second-largest Medicaid program. The panel’s findings put the Empire State at the center of a broader probe into how states police providers who bill Medicare and Medicaid, and whether basic safeguards are even in place.
The New York Post reported that committee investigators zeroed in on a simple requirement: states must sort Medicaid-only providers by categorical risk level so high-risk outfits get tighter scrutiny before and after they enroll.
The report stated that New York’s counsel later disclosed the state “does not designate categorical risk levels of all Medicaid-only providers.”
It also said the state only recently began elevating the three provider types it does rate by risk level into the high-risk category.
“It is deeply concerning that the nation’s second largest Medicaid program, which spent nearly $98.2 billion in FY 2024 and $12,528 per enrollee per year in FY 2023, is not complying with federal regulations.”
Those figures came straight from the committee’s report of New York’s scale. Nearly $100 billion a year is real money. When risk screening is incomplete, the panel argued, the door stays open wider than federal rules allow.
Committee members framed the gap as a patient-and-taxpayer problem, not a paperwork spat. Federal risk levels exist so states can spot bad actors early in home health, adult day care, behavioral services, and other corners of the program where billing can run hot.
The committee said that after its investigation began, New York paused enrollment for a six-month stretch in some programs. Those included home health care agencies, adult day cares, and applied behavioral analysis services, among others.
How much money, if any, was diverted through weak screening in New York remains unclear in the report itself. Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz has been examining the state’s system as the oversight work continues.
House Energy and Commerce Committee Chairman Brett Guthrie, R-Ky., tied the findings to the people Medicaid and Medicare were built to serve.
Guthrie said:
“Every dollar stolen from Medicare and Medicaid is a dollar taken from the seniors, children, pregnant women, and Americans with disabilities these programs were created to serve.”
He added that the report’s recommendations lay out “commonsense steps to help CMS and the states stop fraud before it happens,” and that the panel will keep pressing to hold wrongdoers accountable and protect taxpayer dollars.
Rep. John Joyce, R-Pa., who chairs the Energy and Commerce Subcommittee on Oversight and Investigations, struck the same note on shared duty.
“These crimes hurt patients and steal from the American taxpayer. We will continue to expose those who exploit the system, hold fraudsters accountable, and advance commonsense recommendations that states can implement.”
Joyce also said protecting program integrity “must be a shared goal, because millions of Americans are counting on us to get it right.”
New York did not accept the committee’s conclusion. Nicolette Simmonds, a spokesperson for Gov. Kathy Hochul, rejected the noncompliance claim outright and cast the probe as a partisan squeeze on state resources.
Simmonds said:
“Make no mistake, this is just another attempt by Washington republicans to strip vulnerable New Yorkers of critical resources they depend on. New York is committed to administering our Medicaid program in compliance with all federal rules and any suggestion otherwise is patently false.”
She also said the governor has “zero tolerance for waste, fraud and abuse” and will keep working to root out bad actors while protecting programs New Yorkers rely on.
That leaves a clean dispute on the record. The House panel says New York failed a core federal risk-designation duty. Albany says it complies and calls the suggestion false. The report’s own counsel disclosure is what the committee used to drive its finding.
New York was not the only target. The panel also examined California, Colorado, Maine, Vermont, Massachusetts, Pennsylvania, Nebraska, Oregon, and Washington state for potential fraud risks in how Medicaid or Medicare funding is distributed.
Across that map, the report flagged service lines already showing heavy fraud pressure. Non-emergency medical transportation, adult day care, applied behavioral analysis, substance use disorder treatment, and home and community-based services were all described as “experiencing high rates of fraud.”
On the Medicare side, the report pointed to elevated fraud activity in hospice, home health care, durable medical equipment, and genetic testing.
Home and community-based services expansions under HCBS Section 1915(c) waivers, federal approvals that let states cover long-term care outside nursing homes, drew special concern. The report said states have rapidly expanded those benefits, driving costs up and leaving Medicaid “vulnerable to fraud without proper programmatic safeguards.”
Medicaid now eats the largest share of state budgets on average, the panel noted, at 30.7% of funding set aside for the programs.
California’s trajectory got a separate callout as a cost warning. The report cited Medi-Cal spending rising from $83 billion a year in 2014 to $219.7 billion by 2027.
Health and Human Services Secretary Robert F. Kennedy Jr. has blamed lax safeguards for the ballooning of many programs in recent years. He said that between January 2021 and January 2025, just six employees staffed the HHS program integrity office.
That skeleton crew figure lands hard next to the dollars at stake. The committee’s New York findings were also described as lining up with work by Vice President JD Vance’s anti-fraud task force.
So far, that White House effort has identified $96.4 billion in fraudulently obtained funding from HHS programs, halted $46.2 billion from improper distribution, and seen another $33.1 billion recovered under the Trump administration.
Those totals are national, not a New York ledger. They do show what aggressive integrity work can surface when someone is actually looking. The House report’s pitch is that risk-level screening is one of the basic tools states are supposed to use before the losses pile up.
Guthrie and Joyce both cast the recommendations as practical steps CMS and states can take now, not a years-long study. The subcommittee’s stated aim is stopping fraud that threatens the future of Medicare and Medicaid, not waiting for another cycle of waste to become tomorrow’s baseline.
For New York, the unresolved question is straightforward. The committee published counsel’s admission on missing categorical risk levels for all Medicaid-only providers, tallied nearly $98.2 billion in FY 2024 spending, and said federal rules were not met. The Hochul administration answered that it complies fully and that the charge is false. Taxpayers funding both the federal share and the state’s giant program are left with those two accounts, and with a screening gap the panel says only recently started to close for the few provider types New York already rated.
When a state handling nearly $100 billion in Medicaid money cannot show it rates every provider for fraud risk, Washington’s job is to force the safeguard back into place, not to take Albany’s word that the rules somehow do not apply.
