House Oversight Panel probes New York Medicaid matching practices

The House Oversight Committee is intensifying its probe into allegations that the state of New York has been improperly matching federal funds under a Medicaid program used to sustain safety-net hospitals – shortchanging such providers by having them put up their own funds to cover the state’s match – as part of an unlawful scheme to shore up Albany’s shaky finances.

In a letter obtained by RealClearPolitics, Chairman James Comer has requested a briefing from Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz within the next two weeks pertaining to such allegations and called on his agency to issue formal guidance regarding the sourcing of non-federal matching funds in the relevant Medicaid program.

“The Committee is concerned that the State, and likely other states too, are failing to follow federal law by misrepresenting the source of the non-federal share that the State is responsible for providing to trigger federal dollars under the Medicaid DSH [Disproportionate Share Hospital] program,” the letter reads.

At the center of the committee’s probe is the Empire State’s Nassau University Medical Center. That hospital, the only one to serve all comers, some 270,000 patients annually hailing from the county’s suburbs east of Manhattan, relies on Medicaid’s DSH program for funding. Under that program, the federal government matches non-federal funding at roughly a one-to-one rate, with states often collecting the non-federal share from local governments or through provider taxes and fees.

As RealClearInvestigations reported in November, former Nassau University Medical Center leaders allege that, over a 20-year period, the provider was cheated out of $1 billion because the state improperly required the hospital to post an annual $50 million non-federal share to the federal government. The hospital, in turn, would receive the federal government’s $50 million share and its own money back, despite state representations purportedly suggesting otherwise.

The leaders who unearthed this alleged scheme claim that it contributed to financial shortfalls threatening the center’s viability – a center that, as a public benefit corporation, the state and county were jointly responsible for overseeing. The hospital would file suit against the state in December 2024 in a bid to recoup the funds its executives believed it was owed, with the state contending that it was allowed to tap the hospital to put up the non-federal match. Months later, Democratic Gov. Kathy Hochul would allegedly orchestrate a hostile takeover of the facility, directing the New York legislature to pass a budget enabling her to effectively seize control of it from Republican Nassau County Executive Bruce Blakeman.

Following that takeover, the newly installed Hochul appointees on the hospital’s board would force out the executives who had unearthed and challenged the alleged scheme, and quash the hospital’s litigation.

The committee’s request for a briefing and formal clarification regarding the sourcing of funds under the Medicaid program follows its initiation of an investigation in July, when it solicited documents and communications from Gov. Hochul and her Executive Chamber. Chairman Comer’s letter to Dr. Oz indicates that New York has only partially provided materials responsive to that request.

Months earlier, in February, several New York representatives sent a letter to Health and Human Services Secretary Robert F. Kennedy Jr. and CMS’ acting administration elevating the matter and seeking clarification on state obligations under the Medicaid matching program, and whether health authorities had reviewed the Nassau University Medical Center situation to assess whether the Empire State had complied with federal law and regulations.

The letter comes amid recent reporting of over $1 billion in fraud, waste, and abuse in another state welfare program that draws on Medicaid, its Consumer Directed Personal Assistance Program.

It also comes as Nassau County Executive Blakeman recently initiated his campaign to unseat Gov. Hochul in the state’s 2026 contest.