On October 22, 2026, officials from the Centers for Medicare and Medicaid Services (CMS) visited over 80 adult day care centers in New York City and delivered warning letters regarding billing issues. What were the concerns raised in the letters and what actions are the operators required to take?
According to a letter obtained by this news outlet, CMS informed one adult day care center that through data analysis, they found that the center’s Medicaid (commonly known as “白卡” in Chinese) billing amounts were unusually high compared to peers in the state of New York. The center was reminded to review their bills and service records, while emphasizing that the notification does not constitute a determination of wrongdoing.
CMS stated that they are collaborating with the New York State Department of Health and the State Office of the Medicaid Inspector General to combat Medicaid fraud, waste, and abuse, and to identify abnormal billing patterns.
The letter requested operators to ensure accurate and complete reporting, with sufficient documentation support, compliance with billing and coding regulations, and to cooperate with audits and reviews when requested.
CMS encouraged the centers to review their bills and records themselves; if the documents are sufficient to prove beneficiary eligibility and that the reported services meet requirements, further action may not be necessary at this stage.
The letter warned that if regulatory authorities discover potential issues and the operators do not address them, they may face administrative penalties, recoupment of funds, or referral to CMS program integrity contractors, the Office of Inspector General of the Department of Health and Human Services, and other law enforcement agencies.
CMS will forward the letters to the State Department of Health and recommend that it collaborate with the medical insurance plans contracted with the center to assess the appropriateness of the billing.
The letter also reminded that state Medicaid agencies can suspend payments under certain conditions; the federal Anti-Kickback statute prohibits offering, paying, soliciting, or receiving any form of remuneration in return for patient referrals or business related to federal healthcare programs, but it did not specify that the center in question had engaged in such activities.
Two additional pages of documents obtained by this news outlet were “Inspection Notices” from the Homeland Security Investigations (HSI), requesting businesses to submit employees’ I-9 employment eligibility verification forms and related documents by October 23. This notice pertains to employee work eligibility and differs in nature from the CMS billing reminders, and it cannot solely determine the presence of healthcare fraud or employment violations in businesses.