HHS-OIG denies New York Medicaid fraud unit’s recertification

HHS-OIG denied recertification of New York’s Medicaid Fraud Control Unit and suspended its federal grant effective July 1, 2026, through Sept. 30, 2026, when the current grant period expires. The office said federal funding is available only when a unit is certified and recertified annually.

The issue matters beyond New York because Medicaid Fraud Control Units operate in all 50 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands, and OIG says it annually recertifies each unit while funding part of operating costs.

Why OIG acted

In its June 30 letter, OIG said New York’s unit had the lowest criminal enforcement results among similar-sized units, with fewer than 10 criminal indictments in four of the last five years and just 53 fraud convictions from 2023 to 2025.

OIG also said 34% of the unit’s open cases were more than three years old and that the unit was working through a backlog of older cases.

The letter said the suspension can be lifted before Sept. 30 if New York takes corrective action. AP reported that Attorney General Letitia James said her office was considering legal options to fight the freeze.

What to watch next

The practical question is whether New York can persuade OIG that it has fixed the problems before the grant period ends. If not, the freeze continues, and other states will be watching because the case shows how HHS-OIG can use certification and grant terms to pressure state fraud units.

Sources

• U.S. Attorney's Office, Northern District of New York statement on federal decertification
• HHS-OIG denial letter for New York Medicaid Fraud Control Unit
• Associated Press report on New York Medicaid fraud unit funding freeze