In March 2026, the Centers for Medicare & Medicaid Services (CMS) issued a formal letter to New York Governor Kathy Hochul and senior New York State health officials raising serious concerns regarding fraud, waste, and abuse (FWA) within the State’s Medicaid program. The letter represents one of the most direct and comprehensive federal interventions into New York Medicaid oversight in recent years and signals heightened scrutiny for Medicaid‑funded providers statewide.
Overview of the CMS Letter
CMS states that it is formally requesting detailed information regarding program integrity, provider screening, and enrollment oversight in New York’s Medicaid program pursuant to federal Medicaid statutes and regulations governing fraud prevention and program integrity.
CMS emphasizes that maintaining Medicaid integrity is a shared federal–state responsibility and cites its obligation to ensure that federal Medicaid funds are used appropriately and safeguarded against fraud, waste, and abuse.
Areas of Elevated Fraud and Abuse Risk
In the letter, CMS identifies several Medicaid service areas that it believes present heightened risk for fraud, waste, and abuse, including:
- Personal care services
- Home health services
- Adult day care programs
- Non‑emergency medical transportation (NEMT)
- Behavioral health services
CMS notes that recent public reporting, federal prosecutions, and CMS data analyses raise concerns about New York’s oversight of these service categories. The agency further states that these risks are compounded by elevated Medicaid spending levels and workforce utilization patterns that significantly exceed national norms.
Medicaid Spending and Oversight Concerns
CMS highlights that New York’s Medicaid program is among the most expensive in the nation, both on a total and per‑beneficiary basis. According to the letter, New York’s spending patterns and service delivery structure, particularly in community‑based and long‑term care services, create what CMS describes as a high‑risk environment for fraud, waste, and abuse.
CMS states that these conditions warrant immediate investigation, corrective action, and enhanced transparency to protect Medicaid beneficiaries and taxpayers.
Implications for Providers and Oversight Agencies
While the letter is addressed to State leadership, its implications extend directly to:
- Medicaid providers and subcontractors
- Managed care organizations
- Fiscal intermediaries
- Education, health, and human service programs receiving Medicaid funding
The letter signals an increased likelihood of:
- Targeted audits and reviews
- Expanded data analytics and payment scrutiny
- Heightened expectations for compliance programs and internal controls
- Closer coordination between CMS, OMIG, and other enforcement bodies
Providers should expect increased emphasis on documentation, allowability of costs, service verification, and governance oversight, particularly in the service areas identified by CMS.
Accessing the CMS Letter
The full CMS letter dated March 3, 2026 is publicly available and can be accessed here:
Letter to Governor Kathy Hochul Regarding Medicaid Fraud, Waste, and Abuse (March 3, 2026) CMS
