Exclusive | House GOP launches probe into NY Gov. Kathy Hochul withholding Medicaid funds to plug billion-dollar hole in state budget

WASHINGTON — House Republicans launched an investigation Wednesday into New York Gov. Kathy Hochul purportedly withholding Medicaid funding — including from hospitals serving the most vulnerable — in order to plug a billion-dollar hole in the state’s budget, The Post can reveal.

House Oversight Committee Chairman James Comer (R-Ky.), DOGE Subcommittee Chairwoman Marjorie Taylor Greene (R-Ga.) and New York GOP Reps. Mike Lawler and Nick Langworthy asked Hochul in a Wednesday letter to hand over records about the alleged “abuse of federal taxpayer funds.”

“This fiscal coverup has forced local governments to increase property taxes and cut local services,” the Republican lawmakers wrote.

“It is felt most acutely in small and mid-sized counties like Broome and Erie who do not have the enormous tax base to easily make up for the state’s clawbacks.”

In Nassau County, one hospital’s fight against the funding issues even led to a “hostile takeover” by the governor to appoint new members to its board of directors, according to executives who resigned in protest.

The Post reached out to Hochul’s office for comment.

Starting in May 2023, Hochul’s administration had shifted from providing the federal funding to localities to help pay for Medicaid services — known as the Federal Medical Assistance Percentage (FMAP) — and moved to phase it out entirely by April 2026.

“Despite taking over the growth of Medicaid in 2015 creating total savings of $37.9 billion for all counties and New York City, the state has not been adjusting the amount of enhanced federal funding the state retains for Medicaid expansion with the state assuming almost $1 billion annually in what would otherwise be local costs,” a rep for the governor’s office said in a statement at the time.

“Given the governor’s historic health care investments, the state is utilizing the available federal dollars to fund critical investments in Medicaid to ensure access, promote equity and stabilize the health system serving New York’s most vulnerable.”

Last year, Nassau University Medical Center sued New York state, claiming it had been denied $1.06 billion in federal Medicaid funding as required by law.

Instead, NUMC had been forced to pay New York’s percentage of FMAP funding for more than two decades.

Hochul’s budget deal struck with New York legislators earlier this year included an agreement that would impose a state-run board at NUMC — kicking local officials out of the hospital’s leadership.

NUMC is the only public hospital in Nassau County and around 80% of its 275,000 patients are uninsured.

“The abuse of federal taxpayer funds intended to ensure health care coverage for the most vulnerable to cover up your state’s budget shortfall is unacceptable,” the House Republicans told Hochul in the letter.

Hochul’s office has until July 16 to turn in all records and communications related to NUMC, the budget provision that began withholding Medicaid funding and other information about the Medicaid Disproportionate Share Hospital payments program.