An audit of New York’s Social Adult Day Care programs found millions of dollars in questionable Medicaid payments, safety concerns, and widespread compliance failures, according to Thomas P. DiNapoli.
The findings come as federal prosecutors pursue a related fraud case. On Feb. 9, the U.S. Department of Justice announced the arrest of two men from Queens accused of defrauding Medicare and Medicaid out of $120 million through illegal kickbacks, bribes, and claims for services that were never provided. DiNapoli’s office referred its audit findings and worked with law enforcement during the investigation.
“Many vulnerable New Yorkers rely on social adult day care services to help them stay in their own homes and communities,” DiNapoli said. “But without stronger oversight from the Department of Health, we risk both the well-being of these individuals and the misuse of taxpayer dollars.”
Social Adult Day Care programs provide personal care and other support services in structured settings for adults with chronic illnesses or disabilities. The programs are overseen by the New York State Department of Health.
The audit identified $285 million in questionable Medicaid payments made to providers for service dates after they had been terminated from at least one managed long-term care network. That total includes $28.5 million paid to a provider terminated for cause, which can include fraud, waste, or abuse.
Auditors also flagged improper billing practices. At three centers — including locations in Gravesend and Coney Island in Brooklyn, Flushing, and Freeport — auditors found $672,147 in claims that lacked required documentation to prove services were delivered.
Facility safety and occupancy rules were another concern. One Gravesend site failed to update its certificate of occupancy after taking over the building from a prior tenant. At a Flushing center legally limited to 323 participants, auditors found 386 days when attendance claims exceeded capacity. On one day, the site billed for 530 people — 207 above the limit — collecting more than $47,000 for that single day.
Auditors also reported widespread failures to properly assess clients and create required service plans. Of 15 member files reviewed, 14 contained incomplete or noncompliant assessments. They further found the state did not consistently review these documents during site inspections.
State health officials said New York maintains strong program oversight. Under Kathy Hochul’s administration and with oversight from the Office of the State Comptroller and the Office of the Medicaid Inspector General, the system is designed to detect fraud and protect taxpayer dollars, officials said.
The audit recommends the Department of Health review the questionable payments for possible recovery, strengthen monitoring and documentation requirements, use claims data to flag overcrowding, and ensure providers have proper certificates of occupancy before enrolling participants.
Health department officials said they have begun taking steps to address the issues raised in the audit.
