Feds Launch Probe Into New York's Medicaid Program

CMS Administrator Dr. Mehmet Oz alleges fraud and waste, as Minnesota sues over withheld Medicaid funds

Published on Mar. 9, 2026

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The Centers for Medicare and Medicaid Services (CMS), led by Administrator Dr. Mehmet Oz, has launched an investigation into New York's Medicaid program, claiming it is "riddled with fraud and waste." This comes as Minnesota has filed a federal lawsuit against Oz, CMS, the Department of Health and Human Services, and its secretary, Robert F. Kennedy Jr., for withholding Medicaid funding from the state, accusing the federal government of "weaponizing Medicaid against Minnesota as a political punishment."

Why it matters

The federal government's crackdown on Medicaid fraud and waste, including the new "CRUSH" initiative seeking stakeholder input, signals an increased emphasis on combating improper payments across government health programs. This could lead to heightened enforcement actions against providers, especially in high-spending states like New York whose Medicaid programs are now under federal scrutiny.

The details

The investigation into New York's Medicaid program was announced in early March, with Oz seeking detailed information from Governor Kathy Hochul on the state's efforts to combat fraud, including provider screening and enrollment oversight. New York's Medicaid program costs $115.6 billion annually and covers one in three state residents, making it the most expensive state Medicaid program. Meanwhile, Minnesota has accused the federal government of "weaponizing Medicaid" against the state as political punishment, filing a lawsuit over withheld Medicaid funds.

  • In early March 2026, CMS Administrator Dr. Mehmet Oz announced an investigation into New York's Medicaid program.
  • On February 25, 2026, the Trump Administration announced a "major crackdown" on health care fraud, including a six-month moratorium on new Medicare enrollment for certain suppliers and the new "CRUSH" initiative.
  • The CRUSH request for information, seeking stakeholder input on preventing fraud and abuse, has a comment deadline of March 30, 2026.
  • In January 2026, the U.S. Department of Justice launched a new Division for National Fraud Enforcement to combat fraud in Medicare and Medicaid.
  • Since January 2025, there has been an increased emphasis on health care fraud investigations, including through use of the civil False Claims Act.

The players

Dr. Mehmet Oz

The administrator of the Centers for Medicare and Medicaid Services (CMS), who is leading the investigation into New York's Medicaid program.

Kathy Hochul

The Governor of New York, who has reportedly downplayed the impacts of the federal investigation on the state's health care coverage.

Robert F. Kennedy Jr.

The Secretary of the U.S. Department of Health and Human Services, who is involved in the federal government's crackdown on health care fraud.

Minnesota

The state that has filed a federal lawsuit against Oz, CMS, HHS, and Kennedy, accusing the federal government of "weaponizing Medicaid" against Minnesota as political punishment.

New York Medicaid Program

The state's Medicaid program, which costs $115.6 billion annually and provides health care coverage for one in three New Yorkers, making it the most expensive state Medicaid program.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.