Feds probe dozens of NYC adult daycares amid fraud concerns

Federal authorities have initiated investigations into numerous social adult daycare centers in a New York City neighborhood, prompted by a CBS News data analysis that uncovered a significant cluster of these Medicaid-funded facilities. The rapid proliferation of centers catering to seniors has raised red flags regarding potential fraud.

Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, questioned the necessity of such a high number of centers in one area. Social adult daycare facilities provide essential services like meals, personal care, and social activities to seniors and individuals with disabilities, with costs billed to state governments and covered by federal and state tax dollars. Nationwide, Medicaid paid adult daycare providers $3.35 billion in 2024, with New York state receiving 17% of that amount, more than any other state. New York's spending on these centers nearly quadrupled between 2018 and 2024.

The epicenter of this spending surge is Flushing, Queens, which hosts 64 social adult daycare facilities within a one-mile radius, according to the CBS News analysis of Medicaid data. These Flushing facilities bill Medicaid for services equivalent to over 90% of local Medicaid-eligible seniors. Enrollment at these centers has dramatically outpaced the growth of the senior population in the area; while the Medicaid-eligible senior population grew by approximately 20% from 2018 to 2024, the number of seniors billed by social adult daycares quintupled, increasing by 390%.

Investigators are now tasked with determining whether these facilities are legitimately billing for a vastly increased number of participants or if fraudulent claims are being submitted. A spokesperson for the New York State Department of Health stated that the state has implemented measures to combat Medicaid abuses, including a new tracking process and enhanced oversight. Since 2021, the agency has referred 387 centers for investigation, with a third of those cases forwarded to the Attorney General's office for law enforcement action.

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[It] begs the question: How many social adult daycare centers do you need?