Feds vs. the States: Dr. Mehmet Oz Announces an Investigation Into New York’s Medicaid Program

In early March, word came that Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS) is investigating New York’s Medicaid program—claiming it is riddled with fraud and waste.

The news came at the same time as Minnesota filed a federal lawsuit against Oz, CMS, the U.S. Department of Health and Human Services (HHS) and its secretary, Robert F. Kennedy Jr., for withholding Medicaid funding, accusing the federal government of “weaponiz[ing] Medicaid against Minnesota as a political punishment.”

These developments closely follow the Trump Administration’s announcement, on February 25, 2026, a “major crackdown” by Oz and Kennedy on health care fraud, through a plan that includes “deferring $259.5 million of quarterly federal Medicaid funding in Minnesota to prevent payment of questionable claims.” The health care fraud crackdown also includes 1) a six-month moratorium on new Medicare enrollment for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers; and 2) a CMS initiative called Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH).

The CRUSH request for information (RFI) is currently seeking input from a range of stakeholders on preventing, detecting, and responding to fraud, waste, abuse in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the health insurance marketplace. Comments on the CRUSH RFI—which refers back to a June 6, 2025, Presidential Memorandum on Eliminating Waste, Fraud, and Abuse in Medicaid—are due by March 30, 2026.

The U.S. Department of Justice (DOJ) is also playing a major role in combating fraud in Medicare and Medicaid. A new Division for National Fraud Enforcement launched in January, and there have been numerous indications, since January 2025, of an increased emphasis on health care fraud investigations, including through use of the civil False Claims Act (see related EBG Insight here).

New York Providers: Be Prepared for Downstream MFCU Enforcement

The New York Post reported on March 3 that Oz seeks from New York Governor Kathy Hochul the answers to 50 questions regarding efforts to combat fraud in New York’s Medicaid program, including “detailed information regarding program integrity[,] provider screening, and enrollment oversight.”

According to the Associated Press, New York’s Medicaid program cost $115.6 billion in FY 2025, provides health care for 1 in 3 New Yorkers and spends more per person than any other state’s Medicaid program.

Hochul has reportedly downplayed the impacts of the investigation on the state’s health care coverage. In any event, Medicaid providers in New York State should be prepared for ripple down impacts and likely increased enforcement from the New York State Office of the Attorney General’s Medicaid Fraud Control Unit (MFCU).

Regardless of whether it is CMS, HHS, DOJ, or state Medicaid Fraud Control Units that come knocking, the government is fully prepared to combat fraud, waste, and abuse in health care—and not just against the states. Investigations of companies and individuals for Medicare and Medicaid fraud also return funds to both federal and state government coffers. Compliance programs continue to be essential, especially for health care stakeholders and providers. If you have questions, please reach out to the authors.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.