The Trump administration launched a Medicaid fraud investigation in New York on Tuesday, directing state officials to provide details on fraud, waste and abuse within 30 days or face deferred payments — the latest in a series of actions targeting health programs in Democratic-led states.
Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz announced the probe in a video statement, citing what he called “concerning trends” in New York’s program. In a letter to Gov. Kathy Hochul, a Democrat, Oz wrote that the state’s spending levels combined with “serious concerns” about its oversight of certain Medicaid services demand “immediate investigation, corrective action and enhanced transparency.”
“Heart surgeons are trained to look at the numbers,” Oz, a former celebrity heart surgeon, said in the video. “Right now, the numbers coming out of New York’s Medicaid program don’t add up.”
The probe, announced by Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, puts New York’s Medicaid program — which cost $115.6 billion in the 2025 fiscal year and covers roughly one in three state residents — under federal scrutiny as the administration pursues what it calls a nationwide anti-fraud campaign and courts have blocked some similar funding withholdings elsewhere.
The letter flagged as a specific concern the high proportion of New York Medicaid beneficiaries receiving personal care services — assistance with daily activities such as bathing, grooming and meal preparation. New York’s program spends more per enrollee than any other state’s Medicaid program, a cost burden that has occupied state officials for years. Former Gov. Andrew Cuomo spent years contending with the program’s growth; Hochul has also pursued cost reductions, including an overhaul of how home health care is administered.
Asked Wednesday about Oz’s letter, Hochul said she believed the administration was targeting her state for political reasons, while also pledging cooperation on legitimate fraud cases.
“I will have to stand up and show them the truth and show them the facts, that they’re wrong,” Hochul told reporters. “When there is fraud I will help them fight it.”
Hochul’s office said the investigation was an attempt by the Trump administration to remove health care from ordinary New Yorkers. CMS said in a statement that ensuring states comply with federal rules is “a core part of the agency’s federal oversight role.”
The New York investigation followed CMS action against Minnesota by less than a week. The administration halted nearly $260 million in Medicaid payments to Minnesota, citing fraud allegations that Minnesota Gov. Tim Walz, a Democrat, called “targeted retribution.” Minnesota sued the Trump administration on Monday over the deferred payments and is also appealing a separate CMS decision to withhold $2 billion in annual Medicaid funds announced in early January.
Earlier this year, Oz sent letters to Democratic governors in Maine and California demanding more information or corrective action on alleged fraud in government health programs. Maine Gov. Janet Mills, a Democrat, called the request “a political attack” and said she would not be intimidated. The 30-day deadline Oz set for Maine’s response was set to expire this week, according to the Associated Press.
The administration has also moved to withhold funding related to child care subsidies and the Supplemental Nutrition Assistance Program from states that declined to provide data federal officials said was needed to identify fraud. In both those instances, federal judges ruled that the money must continue to flow while legal challenges proceed.
The administration has framed its Medicaid actions as part of a broader effort to curtail fraud and reduce federal spending. Vice President JD Vance has been tasked by the administration with spearheading what it calls a national “war on fraud.”