New York Attorney General Letitia James’ office ranks among the worst in the country for criminally prosecuting Medicaid fraud, according to a new analysis.
The Empire Center for Public Policy calculated, using federal data, that during James’ term as AG from 2019 to 2025, the state ranked 49th for criminal investigations per billion of Medicaid dollars spent.
New York ranked 51st out of all states and Washington DC for indictments per billion, and 51st for convictions, said Empire Center fellow Bill Hammond.
And billions of dollars could be at stake.
The Empire State spends $124 billion on Medicaid, the highest per resident among 50 states in fiscal year 2024 and 77% above the national average, according to the think tank.
The federal government kicks in more than half of the bill for massive Medicaid costs and cracking down on fraud, waste and abuse is a priority to help rein in spending.
The independent analysis comes after the Trump administration said it would freeze $60 million in federal funding for New York’s Medicaid Fraud Control Unit, which the AG oversees, claiming weak enforcement against fraud.
The administration, via the US Department of Health and Human Services Inspector General Thomas March Bell, accused the unit of not securing enough criminal indictments and convictions and said its federal funding would be suspended through at least Sept. 30.
“As a result of this leadership failure and poor decision making—and with billions of dollars at stake and millions of people expecting safe care for their families—the New York MFCU has been ineffective in fighting criminal cases involving Medicaid fraud or abuse or neglect of Medicaid patients,” Bell wrote in a June 30 letter to James.
James’ office disputed the assertion of lax enforcement, but Hammond concluded the feds were mostly correct.
“A review of the available statistics, however, suggests that Bell’s criticism is well founded,” Hammond said.
“The performance of James’ MFCU – when adjusted for the scale of New York’s $124 billion Medicaid program – ranks among the worst in the US on a range of benchmarks.”
Only Alabama and Oregon ranked worse than New York for overall Medicaid investigations, while Hawaii came in first for launching such probes.
Mississippi had the highest overall indictment and conviction rate, while Nevada was top of the list for best fraud indictment and fraud conviction rate, specifically, according to the Empire Center analysis.
Meanwhile, New York’s $4,942 per resident spending was 24% higher than Kentucky, the next highest spending state, at $3,989 per resident, while the most populous state California came in fourth at $3,984 per resident. The national average was $2,791 per resident.
More populous Texas and Florida were among the lowest spenders on Medicaid — $1,579 per resident and $1,536 per resident, respectively.
The debate over Medicaid fraud enforcement has become a campaign issue as Democrat James seeks re-election to a third term in November.
Republican candidate for AG Saritha Komatireddy, a former federal prosecutor, flunked James’ Medicaid fraud enforcement.
“New Yorkers are getting ripped off every day, and Letitia James isn’t doing anything about it,” she said.
Komatireddy vowed to add 20 criminal prosecutors to the office and recover at least $1 billion in stolen Medicaid funds during her first term and return those dollars directly to New Yorkers through a “crime” tax refund.
“The reality is, under Letitia James, New Yorkers have been paying a crime tax — I’ll prosecute crime, and issue every New Yorker a tax refund,” Komatireddy said.
“Every dollar stolen from Medicaid is a dollar stolen from New York taxpayers, and means that patients, seniors, and children in New York have been deprived of critical medical care.”
But James dismissed the critique from the Trump administration and others as a partisan hit job.
“Every year, New York recovers more funds for Medicaid than almost any other state, securing more than $627 million since 2019. If the federal administration actually wanted to combat fraud, they would be working with our office, just as past administrations from both parties have done,” a spokesperson for James said.
“This administration’s reckless decision to play politics with critical funding to fight Medicaid fraud in New York will only embolden criminals and put vulnerable New Yorkers at risk.”
New York was among the top 10 states for total funds recovered each year since 2019, including leading the nation in fiscal year 2020 with $181 million recovered, her office said.
In federal fiscal year 2025, New York recovered more than $110 million, the fifth most of any state.
The majority of MFCU’s criminal convictions – 69 out of 115 from 2020 to 2025 – were classified as “high impact” convictions of owners, executives and corporations that return large amounts to Medicaid, the AG’s office said.
Recent AG criminal cases prosecuted in the last month include the arrest of two people for running a fraudulent medical clinic in Queens that stole over $100,000; the arrest of a medical supply company owner for stealing $2.5 million from Medicaid with a fake billing scheme; and the arrest of a man for a years-long fraud scheme that stole $9 million from Medicaid by charging for fake eye surgeries that never happened.
But Hammond said the AG’s defense of her office’s record was misleading.
Her office’s stats focused mostly on civil recoveries while the federal inspector general largely faulted New York’s weak criminal enforcement of Medicaid fraud.
Hammond also noted the AG office’s statistics were based on gross dollar amounts, failing to adjust for the fact that New York operates the second-costliest Medicaid program in the country after California.
As a percentage of overall spending, the state’s civil recoveries in 2025 ranked 10th and its criminal recoveries ranked 38th, his analysis found.
“For James’ whole term in office, from 2019 through 2025, New York’s civil recoveries as a percentage of spending ranked 16th and its criminal recoveries sat near the bottom at 49th,” Hammond said.
As noted in Bell’s letter to James, the New York MFCU’s investigative activity has declined sharply since 2020, James’ second year in office.
From 2020 to 2025, investigations of all types – civil and criminal – dropped by 50% in New York, compared to a 19% dip nationwide.
New York MFCU’s investigative activity plummeted since 2020, James’ second year in office, the feds and Hammond noted.
