Dr. Mehmet Oz says organized Korean and Chinese crime networks are bleeding New York's Medicaid program dry through a cluster of senior daycare centers in Queens, and he has given Gov. Kathy Hochul a hard deadline to explain how it happened.
Sixty four social adult daycare centers sit within a single square mile of Flushing, Queens, the densest concentration of such facilities anywhere in the country, according to CBS News. Between 2018 and 2024 the neighborhood's Medicaid-eligible senior population grew by roughly 20 percent. The number of seniors those daycare centers billed Medicaid for grew 390 percent over the same stretch. The math does not work, and Oz, the administrator of the Centers for Medicare and Medicaid Services, wants to know why New York never asked the question first.
"How many social adult daycare centers do you need?" Oz asked CBS News, a plain question that state regulators apparently never bothered to answer themselves.
The case broke wide open after independent investigative journalist Nick Shirley released a video posted July 10 showing him inside several of the Flushing facilities, where he says operators openly described a scheme paying elderly Korean and Chinese residents cash and gift cards to show up for ping pong, tai chi and board games while the centers billed Medicaid for legitimate medical day care. Shirley and Oz put the total at more than 190 million dollars in fraudulent billing tied to the investigation, a figure both men have stated publicly but which remains their own characterization pending further federal confirmation. Shirley described what he found as "organized Korean and Chinese mafias, along with other foreigners operating and stealing taxpayer dollars," according to RealClearPolitics.
Oz did not stay behind a podium for this one. He joined Shirley on the ground in Queens, visiting an apartment where the two say three separate durable medical equipment companies claimed to operate with no visible inventory. Oz called it "almost certainly fraud" and estimated the operators were pulling in 2 to 8 million dollars a month, according to Mediaite. That is not a policy dispute. That is an allegation of a specific crime, made by a sitting federal official standing in the doorway.
The fraud is not hypothetical or newly invented for a headline. In February, federal prosecutors charged two Queens men, Inwoo Kim and Daniel Lee, in a separate 120 million dollar scheme run through a pharmacy and two Flushing daycare centers called Royal Adult Daycare and Happy Life, according to the HHS Office of Inspector General. Kim and Lee allegedly paid cash and supermarket gift certificates to Medicaid recipients to steer them into filling prescriptions and enrolling in daycare they did not need. That case predates Shirley's video. It shows the pattern was already known inside the system well before Oz sent his letter.
Fifty questions and a 30 day clock
Oz's formal letter to Hochul, first sent in March and now central to his renewed public push, poses 50 specific questions about provider screening, program integrity and enrollment oversight across New York's Medicaid system. New York spends more than 100 billion dollars a year on Medicaid, second highest of any state, and its per-beneficiary spending runs more than 12,500 dollars, 36 percent above the national average, according to CMS figures cited in the letter. Oz set a 30 day deadline for Hochul to deliver a corrective action plan, warning that CMS will begin deferring payments to the state if she does not.
A spokesperson for Hochul told Fox News Digital earlier this year that the governor was already working to root out waste, fraud and abuse and that her office would cooperate with the administration to
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