Federal investigators are looking into why there are dozens of Medicaid-funded social adult daycare centers in one New York City neighborhood.
CBS News reported that the authorities are investigating whether the quick rise of daycare centers in the area suggests that fraudulent activity is occurring.
Social daycare facilities offer meals, personal care, social activities and other assistance to seniors and people with disabilities. Those services are then billed to the state government and covered by federal and state tax dollars.
The costs have been rising — especially in New York state, a CBS News data analysis found. Medicaid paid adult daycare providers $3.35 billion nationwide in 2024, and 17% of that money went to the 375 facilities across New York state — more than any other state. New York spending on these adult daycares ballooned in recent years, with the bill to taxpayers nearly quadrupling from 2018 to 2024.
Those numbers have not gone unnoticed. Investigations are underway into some social adult daycare centers across New York with potential federal action against them anticipated, CBS News has learned.
The epicenter of the spike in spending is the bustling neighborhood of Flushing, Queens, the densest cluster of social adult daycare facilities in the country: 64 within a one-mile radius, according to a CBS News analysis of Medicaid data.
The facilities in Flushing bill Medicaid for the equivalent of more than 90% of local Medicaid-eligible seniors.
Enrollment at these facilities is far outpacing the population growth for seniors in the area, CBS News found. From 2018 to 2024, the neighborhood's Medicaid-eligible senior population grew about 20%, the same as the rest of the country. But the number of seniors that its social adult daycares billed for nearly quintupled — up 390%.
A New York State Department of Health spokesperson defended the state’s efforts to address rising fraud involving government programs. He said the state has taken action to root out Medicaid abuse, including instituting a new tracking process and enhanced oversight and compliance reviews.
About 387 centers have been referred for investigation since 2021. A third of those have been sent to the attorney general for prosecution. "The Governor and the Department have taken strong action in recent years to control costs and root out abuses while preserving and improving quality of care," the spokesperson said in a statement.
Over the past year, the issue of fraud in government programs has become a hot national topic after investigations revealed billions of dollars in taxpayer funds being lost to scammers.
In a previous report, CBS News looked into hospice care in Los Angeles and found hundreds of centers that exhibited clear red flags indicating fraud. The outlet noted several indicators such as cramming many offices into one building and billing for sick patients who never received care or were not even dying.
Four years after California vowed to stamp out Medicare fraud, a CBS News investigation discovered hundreds of hospices with red flags remain in business. @adamyamaguchi met a woman who sought physical therapy after a pickleball injury, only to discover that she was a victim of… pic.twitter.com/GtdBRH927m
— CBS Evening News with Tony Dokoupil (@CBSEveningNews) March 11, 2026
Dr. Mehmet Oz, who heads the Centers for Medicare and Medicaid Services, called out states like New York, Minnesota, and California for allowing waste and fraud to run rampant. “This administration under President Donald Trump is not going to tolerate taxpayer dollars being stolen because people aren’t paying attention anymore. We’re focused on this,” he said.
Oz has also threatened to cut off payments to states that fail to address fraud.
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