House Committee on Oversight and Government Reform Chairman James Comer, along with Representatives Nick Langworthy, Marjorie Taylor Greene, and Mike Lawler, has initiated an investigation into allegations that New York State has misused federal Medicaid funds. The lawmakers have addressed a letter to Governor Kathy Hochul requesting documents and communications related to the state's Medicaid program.
The committee is probing reports that New York has not complied with legal requirements to match federal Medicaid funds. It is alleged that the state withheld or clawed back funds from localities and low-income hospitals to support its budget.
Medicaid, a joint state-federal program, provides healthcare for those in need. The federal government reimburses states through the Federal Medical Assistance Percentage (FMAP), which varies based on state income levels. Before 2023, New York allocated these funds to localities based on services provided. However, a budget approved in 2023 resulted in over $1 billion being withheld from localities.
The lawmakers claim this financial maneuvering has forced local governments to raise property taxes and cut services, particularly affecting smaller counties like Broome and Erie. They also allege that New York has required a safety net hospital to reimburse the state's portion of Medicaid matching funds while falsely reporting their allocation to the federal government.
"This fiscal coverup has forced local governments to increase property taxes and cut local services," stated the lawmakers. They concluded by criticizing the misuse of taxpayer funds intended for vulnerable populations as "unacceptable."
Read the letter here.
