Trump fights fraud by freezing funding for New York’s Medicaid Fraud Control Unit

The Trump administration on Tuesday said it would freeze federal funding for New York’s Medicaid Fraud Control Unit, a state agency responsible for investigating and prosecuting fraud in the safety-net government healthcare program. In a letter sent to New York officials, U.S. Department of Health and Human Services Inspector General Thomas March Bell accused the state of not securing enough criminal indictments and convictions and said millions of dollars in funding would be suspended through at least Sept. 30. The move is the second suspension of a state Medicaid fraud unit this year by the Republican Trump administration, and part of a barrage of anti-fraud actions it has aggressively promoted in the healthcare sector. They have included the creation of a new task force, targeted investigations, funding deferrals and demands for revalidation of healthcare providers that have touched all states but focused largely on Democratic ones. The pulled funding also comes after the administration admitted a glaring error in figures meant to help justify a fraud probe into New York’s Medicaid program earlier this year, a mistake critics said revealed a Trumpian tendency to attack first and verify the facts later. New York Attorney General Letitia James, a Democrat, immediately vowed to fight Tuesday’s funding freeze. “During my time as Attorney General, my office has recovered over $627 million for Medicaid and was recognized by this very administration for leading the nation in anti-fraud efforts,” she wrote. “We are considering all legal options to stop this outrageous action.” Letter accuses New York of low performance Bell’s letter to James and New York MFCU Director Amy Held argues that the unit is moving too slowly on cases and amassing too few indictments and convictions for wrongdoing in the Medicaid system. It notes that compared to four similarly-sized units in other states, it secured the lowest number of criminal fraud convictions between 2023