Medicaid spending surge in New York adult day care centers under scrutiny

In Flushing, Queens, 64 social adult daycare facilities operate within a one-mile radius, a concentration that has pushed New York’s Medicaid adult day care spending under a brighter federal and state spotlight. Those centers serve an area where billing has reached the equivalent of more than 90% of local Medicaid-eligible seniors, raising a basic question about whether the program is meeting elder-care needs or exposing a system too easy to game.

The money flowing through the sector is large enough to explain the attention. Medicaid paid adult daycare providers $3.35 billion nationwide in 2024, and 17% of that total went to the 375 facilities across New York state, more than any other state. The surge has been especially sharp in social adult day care, a Medicaid-covered service New York added in 2014, after adult day health care had been part of the state’s long-term care landscape since 1969 as an alternative to institutional care.

The enforcement record has only deepened the concern. On January 15, 2026, two defendants pleaded guilty to a $68 million Medicaid kickback scheme tied to two Brooklyn social adult day cares and a home health care company. On February 9, 2026, federal prosecutors unsealed charges against two Queens men in a separate $120 million Medicare-and-Medicaid fraud case involving social adult day care centers and a pharmacy. Federal authorities are also investigating possible fraudulent activity at some social adult day care facilities across New York state.

State oversight has come under similar criticism. Thomas P. DiNapoli, New York’s comptroller, said a February 2026 audit found questionable Medicaid payments, safety risks and compliance problems in social adult day care programs. His office said the audit identified $285 million in questionable Medicaid payments. The New York State Department of Health says adult day programs are supposed to meet standards covering admission, assessment, staffing qualifications and patients’ rights, but the audit added to the sense that those safeguards were not keeping pace with spending.

The distinction between the two kinds of programs matters. Adult day health care is a community-based model, and most of those services are operated by nursing homes. Social adult day care is governed by separate state rules, and that separate structure has helped the sector expand quickly while complicating enforcement. In a city where one neighborhood can absorb dozens of providers, the question now is whether Medicaid controls were built tightly enough to keep legitimate elder services from becoming a magnet for abuse.