Feds search NYC adult day care centers as Hochul orders review that could end the $500M Medicaid benefit

Federal, state and local investigators fanned out across three boroughs on Tuesday, executing search warrants at social adult day care centers in a Medicaid fraud investigation, and Gov. Kathy Hochul said the state may end the program altogether.

"FBI New York, along with multiple other law enforcement agencies are conducting law enforcement activity in the area of Queens, Staten Island, Brooklyn, and other locations around New York City in connection with ongoing federal investigations," the bureau said in a statement, ABC7 reported. Homeland Security Investigations confirmed its agents took part in "court-authorized law enforcement actions," according to CBS New York. NYPD sources told amNewYork the operation was not immigration-related.

Where agents were seen

• Borough Park, Brooklyn: investigators appeared to be inside an adult day care center on Fort Hamilton Parkway, ABC7 reported; a law enforcement source told CBS New York of a location at Fort Hamilton Parkway and 51st Street. CBS also showed video of at least eight people in law enforcement apparel at a storefront on Eighth Avenue near 41st Street.
• Flushing, Queens: around 1:30 p.m., agents removed about six boxes of materials, two computers and a large plastic container from an adult day care on 148th Street that serves mainly Korean American and Asian American seniors, amNewYork reported.
• Staten Island: warrants were also being executed there, ABC7 was told.

No arrests or charges had been announced as of Tuesday evening, and being searched does not mean a business has been accused of wrongdoing.

What the state says it found

The searches are part of a months-long investigation that targeted more than 100 social adult day care (SADC) providers, the governor's office said in a release. The state Health Department, the Office of the Medicaid Inspector General and Attorney General Letitia James's Medicaid Fraud Control Unit worked with the federal Department of Health and Human Services' inspector general, the FBI and more than a dozen other agencies. "We're targeting providers we believe who engage in illegal activity, ranging from money laundering, to kickbacks, to improper billing and other fraudulent activities," Hochul said Tuesday, according to CBS New York.

The state reviewed 418 SADC programs for compliance in 2025, and between 2021 and 2025 the Medicaid inspector general investigated 387 subjects tied to the programs and referred about 100 cases to the attorney general for possible prosecution, the release said. Earlier this year two people in Brooklyn pleaded guilty in a $68 million SADC fraud scheme, and investigators separately announced charges in an alleged $120 million Medicare and Medicaid scheme involving SADC and pharmacy services in Queens. James said her fraud unit secured 59 indictments, 13 convictions and more than $98 million in recoveries in fiscal year 2026.

Could the program end?

Social adult day care is a non-medical Medicaid benefit, offered through managed long-term care plans, that provides daytime supervision, meals, social activities and personal care in a community setting. More than 400 programs serve about 45,000 Medicaid members statewide at an estimated cost of more than $500 million a year, the governor's office said.

Hochul directed the Health Department to consider "all options," including phasing out the benefit and moving participants to other services for older New Yorkers, with recommendations due by Dec. 31. She also directed the Health Department and the Medicaid inspector general to require health plans to review SADC claims before paying them and to pursue payment suspensions. A moratorium on new providers, in place since July, runs until January 2027 and may be extended. State Health Commissioner Dr. James McDonald said protecting older adults and maintaining their care would remain the priority during the review.