Trump Administration Admits Glaring Error in New York Medicaid Fraud Accusations
President Donald Trump's administration has publicly admitted to a major error in data used to justify a federal fraud investigation into New York's Medicaid program. This significant mistake undermines a broader federal campaign targeting waste, predominantly in states led by Democratic governments.
Questionable Data and Political Implications
The error, representing at least one of several misrepresentations in the administration's description of the program, has prompted health analysts to question how many of the Republican administration's sweeping anti-fraud initiatives nationwide were based on faulty information. This incident reflects a recurring criticism of Trump's second term—that it often attacks first and verifies facts later.
"These numbers could have been cleared up with a simple phone call, so this approach appears remarkably slapdash," stated Michael Kinnucan, senior health policy adviser at the Fiscal Policy Institute, whose recent analysis highlighted the administration's inaccurate claims.
The Specific Error and Correction
The mistake originated in comments made last month by Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS). In a social media video and a letter to New York's Democratic Governor Kathy Hochul announcing the fraud investigation, Oz claimed that New York's Medicaid program provided personal care services to approximately 5 million people last year. This would have represented nearly three-fourths of the state's 6.8 million Medicaid enrollees.
"That level of utilization is unheard of," Oz declared in the video, adding that New York needed to "come clean about its Medicaid program."
However, CMS spokesman Chris Krepich clarified to The Associated Press this week that the actual number of New Yorkers who used those services last year was about 450,000, or between 6% and 7% of total enrollees. He explained that the agency had misidentified New York's approach to applying billing codes and had since refined its methodology.
"CMS is committed to ensuring its analyses fully reflect state-specific billing practices and will continue to work closely with New York to validate data and strengthen program integrity oversight," Krepich stated in an emailed response.
Ongoing Investigation and State Response
Krepich confirmed that the probe continues, as the administration maintains concerns about New York's oversight of personal care services and the Medicaid program overall. CMS has raised additional issues regarding New York's program, including:
- Higher spending per beneficiary and per resident compared to the average state
- Elevated personal care spending levels
- A workforce where personal care aides constitute the largest job category in the state
Health analysts attribute the state's high spending to both elevated service costs in New York and a deliberate policy choice to provide comprehensive at-home care. Cadence Acquaviva, senior public information officer for the New York Department of Health, characterized Oz's initial mischaracterizations as "a targeted attempt to obscure the facts."
"New York State remains committed to protecting and preserving vital Medicaid programs that deliver high-quality services to New Yorkers who depend on them," Acquaviva affirmed.
In a separate statement, Governor Hochul's spokesperson Nicolette Simmonds remarked, "The initial claim by CMS was patently false, and we are glad they now admit it." She added, "Governor Hochul has been clear that New York has zero tolerance for waste, fraud and abuse in Medicaid, or any other state programs, and will continue her efforts to root out bad actors, protect taxpayer dollars, and safeguard the critical programs that New Yorkers rely on."
Broader National Crackdown Context
The Trump administration's investigation into New York forms part of a larger national crackdown, with similar approaches to at least four other states—California, Florida, Maine, and Minnesota—regarding potential healthcare fraud. This anti-fraud initiative appears to be expanding as midterm election voters express concerns about affordability.
Last month, Trump signed an executive order establishing an anti-fraud task force across federal benefit programs, led by Vice President JD Vance. As part of this project, Vance announced the administration would temporarily withhold $243 million in Medicaid funding from Minnesota over fraud concerns, a move that has since prompted a lawsuit from the state.
Kinnucan expressed concern that the administration's adversarial approach to targeting fraud in certain states "politicizes" what should be a collaborative effort. "We want to think collaboratively among all the stakeholders in the program about how we can actually fix it," he said. "We don't want to have fraud be this political football."
Additional Inaccurate Claims Identified
In his video, Oz made at least two other claims about New York that Medicaid advocates and beneficiaries assert distorted reality. He stated that the state recently made its screening for personal care eligibility "more lenient by allowing problems like being 'easily distracted' to qualify for a personal care assistant."
Rebecca Antar, director of the health law unit at the Legal Aid Society, countered that the opposite was true—a rule change implemented last September actually made program requirements more stringent. She clarified that "easily distracted" does not appear among the eligibility criteria.
Krepich responded that the administrator was questioning whether New York's standard for personal care services was "sufficiently rigorous," warning that overly permissive standards risk diverting resources from those with the highest needs and pressuring Medicaid sustainability.
Oz also referred to personal care services as "something that our families would normally do for us, like carrying groceries." Kathleen Downes, a 33-year-old with quadriplegic cerebral palsy who uses personal care services in Nassau County, found this notion offensive, noting it assumes all Medicaid beneficiaries have willing and able family assistance.
Downes, who requires help with showering, using the toilet, and eating, hires both her mother and outside assistants so her aging mother doesn't bear full responsibility. She emphasized that her mother performed this labor unpaid for years, sacrificing career opportunities. "He's assuming that everybody wants to and can just do it for free forever," Downes said. "And that's not feasible for a lot of people."
