New Crackdown On Fraud In Social Adult Day Care Programs Detailed: Hochul

NEW YORK — Gov. Kathy Hochul shed light this week on a new crackdown on fraud within social adult day care programs.

The coordinated state and federal crackdown on fraud, waste and abuse in New York's Medicaid Social Adult Day Care, or SADC, program involved an investigation targeting more than 100 SADC providers suspected of involvement in potential fraud or illegal activity, Hochul said.

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As part of a months-long investigation into complex healthcare fraud, the New York State Department of Health, alongside the Office of the Medicaid Inspector General and New York State Attorney General's Medicaid fraud control unit, has been working closely with the U.S. Department of Health and Human Services Office of the Inspector General, Federal Bureau of Investigation, and a coalition of more than a dozen federal, state, and local partners, she said.

The investigation follows the New York State Department of Health's years-long effort to improve oversight of the program and safeguard taxpayer dollars, including reforms, audits, investigations and enforcement actions involving providers, Hochul said.

In 2025 alone, the department reviewed 418 SADC programs for compliance, Hochul said.

Between 2021 and 2025, OMIG investigated 387 subjects related to SADC operations and referred about 100 cases to the Attorney General's Medicaid Fraud Control Unit for potential criminal prosecution, Hochul said.

Earlier this year, two individuals in Brooklyn pled guilty to a $68 million SADC fraud scheme and state and federal investigators also announced separate charges in an alleged $120 million Medicare and Medicaid fraud scheme connected to SADC and pharmacy services in Queens, Hochul said.

In total, over the past five years, New York's Medicaid program has realized more than $15 billion in cost savings and recoveries through program integrity efforts, Hochul said.

Since establishing SADC as a Medicaid benefit in 2013, New York State has repeatedly strengthened oversight to combat waste, fraud and abuse, Hochul said.

Those actions have included stricter eligibility requirements, imposing provider moratoriums, establishing additional certification requirements and strengthening compliance standards related to audits, recordkeeping, staffing and provider identification, she said.

Most recently, the Department of Health announced a moratorium on new SADC providers in July 2026 to address concerns about fraud and program integrity, Hochul said.

Currently, the SADC program is overseen and administered by the state's 35 managed long-term care plans, which are directly responsible for identifying, investigating, and preventing fraud, waste, and abuse, Hochul said.

The state has already taken concrete steps to strengthen oversight of those centers, she said.

As part of the state's comprehensive strategy to address fraud, waste, and abuse in the Medicaid program, Hochul has directed the State Department of Health and Office of the Medicaid Inspector General to take immediate actions to further strengthen oversight, including requiring health plans to implement prepayment review to ensure that SADC claims are appropriate and pursue payment suspensions, as well as to develop options for addressing the issues with the SADC program, she said.

In addition, Hochul has directed the department to consider all options to eliminate continued fraud, waste and abuse, including phasing out the benefit and transitioning participants to other services that support older New Yorkers, she said.

The department will produce its recommendations to the governor no later than December 31, Hochul said.

"New York has zero tolerance for fraud, and when bad actors take advantage of these critical programs, older New Yorkers in need lose out," Governor Hochul said. "This joint effort between state and federal agencies to uncover and crack down on bad actors in New York builds on years of efforts to improve program oversight regulations. Medicaid is a lifeline for millions of New Yorkers. Protecting that lifeline means defending access to care and defending the integrity of the programs that provide it, which is why I am directing the State Health Department to present options to implement additional reforms that will further ensure taxpayer dollars being used to provide necessary care are protected."

New York Attorney General Letitia James added: "Social adult daycare centers play valuable roles serving New Yorkers in need in their communities. These centers should be focused only on providing fulfilling and enriching programming, not generating fraudulent profits for their owners. In fiscal year 2026 alone, my office's Medicaid fraud control unit has secured 59 indictments, 13 convictions, and more than $98 million in recoveries from dozens of civil settlements. We have been working in close coordination with our federal, state, and local partners to combat waste, fraud, and abuse at social adult daycare centers across multiple ongoing investigations and we look forward to continuing these efforts with our partners to shut down fraudulent schemes and return stolen funds to Medicaid."

SADC is a federally authorized Medicaid service approved, overseen and jointly funded by the federal Centers for Medicare & Medicaid Services, Hochul said. The benefit is available exclusively through the MLTC program and SADC providers are not enrolled Medicaid providers. MLTC plans are responsible for direct oversight of SADC providers, Hochul said.

Social Adult Day Care is a non-medical benefit available through New York's Medicaid Managed Long Term Care program, Hochul said. The program provides daytime supervision, meals, social activities and personal care services in a community setting. More than 400 SADC programs currently serve about 45,000 Medicaid members statewide at an estimated annual total cost of more than $500 million, she said.

New York State Comptroller Thomas P. DiNapoli issued a statement Wednesday regarding the multi-agency operation focused on Medicaid fraud in adult daycare centers.

""his week's joint operation between state and federal law enforcement and oversight agencies targeted alleged fraud in social adult daycare centers. My office's Division of Investigations is part of this coordinated effort and has worked diligently to uncover those abusing the system," DiNapoli said. "Millions of New Yorkers rely on Medicaid for healthcare and other vital services, and we will continue to protect it from fraud and abuse. Federal and state agencies worked together and got results."