New York Governor Kathy Hochul announced on October 20 that the state government is conducting a joint investigation with federal law enforcement agencies into over 100 social adult day care facilities throughout the state. She has directed the state health department to assess feasible measures, including gradually phasing out the Medicaid payments for social adult day care services.
Governor Hochul stated that she has instructed the state health department to evaluate all possible measures to eliminate fraud, waste, and abuse that persist in the adult day care programs.
One option being considered is the gradual phasing out of Medicaid payments for social adult day care services and arranging for elderly individuals currently receiving services to transition to other support services.
Just hours before Hochul announced the intensified crackdown, law enforcement officers wearing Homeland Security Investigation (HSI) vests had been spotted in areas like Flushing, Borough Park, and Sunset Park.
Social Adult Day Care centers (SADCs) provide non-medical benefits under New York’s Medicaid Managed Long-Term Care (MLTC) program, which is an authorized Medicaid service by the federal government and jointly funded and regulated by the Centers for Medicare & Medicaid Services (CMS). This benefit can only be accessed through the MLTC plan, offering daytime care, meals, social activities, and personal care services in a community setting.
According to the state government’s release, there are currently over 400 SADC programs statewide serving approximately 45,000 Medicaid members, with an estimated annual total cost exceeding $500 million.
The state government said that in line with the Governor’s directive, the health department will coordinate with the Office of the Medicaid Inspector General (OMIG) and other relevant agencies to develop recommendations for the future of the Social Adult Day Care centers program, including enhancing oversight, reforming the program, or transitioning participants to other services to meet their needs and safeguard taxpayer resources.
The directive to “suspend the addition of new social adult day care service providers” will remain in effect until January 2027 and may be extended as needed. During the development of the proposed measures by the health department, existing enforcement actions and compliance activities will continue, with the recommendations to be submitted to the Governor by December 31.
The rapid expansion of the Flushing Adult Day Care Center has long drawn the attention of federal regulatory agencies. According to a CBS News investigation released on July 1 this year, within a mile radius of Flushing, there are 64 social adult day care centers, the highest concentration of such facilities in the country. The number of individuals served by these centers claiming service under Medicaid white cards is equivalent to over 90% of the local eligible elderly population.
Of particular concern is the disparity between the growth rates of service claims and the elderly population. Between 2018 and 2024, the eligible elderly population in Flushing grew by only about 20%, similar to the national average increase; however, the number of elderly individuals claiming services under the Medicaid white cards at local adult day care centers increased by 390%, nearly five times the original count.
CBS analysis also revealed that in 2024, approximately $3.35 billion was paid by Medicaid white cards to adult day care service facilities nationwide, with 17% going to 375 institutions in New York state. Between 2018 and 2024, New York state’s related expenditures nearly tripled, approaching almost fourfold the original amount.