Minnesota Is Just the Tip of The Iceberg: NY’s Medicaid Home-Care System Is Rife With Fraud, Statistical Impossibility

If Minnesota’s fraud scandal shocks you, wait until investigators turn their attention to New York City’s Medicaid-funded home healthcare racket. Home health aides have become the largest single occupation in New York, accounting for roughly 40 percent of all job growth — an explosion driven almost entirely by Medicaid dollars. The state now claims 171 aides for every 1,000 residents aged 65 and over, the highest rate in the nation and 153 percent above the national average. That level of “need” defies basic demographics. The system relies heavily on self-reported caregiving, often by family members, with weak real-time verification and minimal auditing. When a program grows this large, this fast, with this little oversight, fraud isn’t an anomaly — it’s baked in. This isn’t about caring for the vulnerable. It’s about a Medicaid pipeline so bloated and credulous that taxpayers are funding a workforce whose scale simply cannot be real.

Empire Center for Public Policy: Home health and personal care aides are now the single largest job category in New York State, and their growth has been extraordinary. The Empire Center, using BLS data, reports NY had roughly 623,000 aides as of May 2024 and that the category represented about 38% of all job growth in the state.

For the whole of the twentieth century, New York City’s wealth was driven by myriad sectors – manufacturing, with the garment trade being a dominant force finance, publishing, technology and shipping through its major port. The unions drove manufacturing out. It’s non-existent. And successive Democrat governments, through burdensome regulation and high taxes, drove out almost everyone else. Today the two largest employers in NYC is the government and Wall Street (financial sector).

The big dirty secret is NYC is kept afloat with taxpayer funded fraud.

The New York City home-healthcare scheme illustrates how Medicaid’s design failures invite industrial-scale abuse. At the center are third-party administrators — including Public Partnerships LLC (PPL) and Leading Edge Administrators — contracted to manage payroll and “benefits” for personal care aides. On paper, these arrangements promise efficiency. In practice, they create opaque money flows with minimal oversight.

One example is the much-touted Flex Card model. Funds are deducted from workers’ paychecks and earmarked for restricted benefits that are difficult to use, poorly explained, and time-limited. The predictable result: large balances go unspent — reportedly approaching 30% — allowing administrators to retain or recycle funds while workers never receive the compensation they were promised. This isn’t a glitch; it’s a feature of predatory design, where friction equals profit.

The scale of opportunity is enormous. New York’s home-care workforce is dramatically oversized relative to need, with roughly 171 aides per 1,000 seniors — about 153% above the national average. Such an imbalance is a classic red flag for eligibility inflation, phantom services, and inflated billing. When supply vastly outstrips plausible demand, fraud doesn’t just slip through — it flourishes.

All of this unfolds against a national backdrop of chronic Medicaid leakage. Federal audits have repeatedly found tens of billions of dollars in improper payments annually, yet Washington’s response has been to outsource more functions rather than enforce rigorous eligibility checks, utilization reviews, and clawbacks. Contractors are paid to move money, not to question whether it should be moving at all.

The incentives are upside-down. Low-wage aides shoulder administrative complexity and lose access to earned compensation. Taxpayers absorb the cost. Contractors collect fees insulated from outcomes. And state agencies point to compliance paperwork while avoiding the harder work of field audits, beneficiary verification, and real enforcement.

This isn’t about care delivery. It’s about a rent-seeking ecosystem where complexity substitutes for accountability. Until eligibility is tightened, benefit designs are simplified and audited, and administrators are paid based on value delivered — not dollars processed — the same result is guaranteed: workers shortchanged, taxpayers fleeced, and fraud normalized as “program management.”

Also…..California is the fraud capitol of the U.S.

Maine.

Idaho.

Utah.

Washington State.

Here, there, and everywhere.

AUTHOR

Pamela Geller

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