By: Don Driggers

The federal official overseeing Medicaid is sharply criticizing the leadership of several Democratic-run states, arguing that widespread fraud and abuse are draining billions of taxpayer dollars from the nation’s healthcare system.

Dr. Mehmet Oz, who now heads the federal Centers for Medicare and Medicaid Services, singled out New York Gov. Kathy Hochul and California Gov. Gavin Newsom in particular, accusing them of failing to adequately address mounting evidence of fraud in their states’ Medicaid programs. Speaking during a radio interview, Oz said the problems are severe enough to suggest deeper systemic issues, according to reporting by the New York Post.

Medicaid is a public health insurance program funded jointly by federal and state governments to provide coverage for low-income Americans, the elderly and people with disabilities. But Oz said the program in several large states has become vulnerable to abuse and mismanagement.

“There’s a rot in the system,” Oz said while discussing Medicaid spending in New York, the New York Post reported.

The criticism comes as federal officials launch a sweeping probe into New York’s massive Medicaid program, which costs roughly $124 billion annually. Oz recently announced that his agency is seeking detailed information about the program’s spending, oversight mechanisms and efforts to detect fraud, according to the New York Post.

New York’s Medicaid system is one of the largest in the country, covering more than 6.8 million residents — about one-third of the state’s population. Oz has argued that the state’s spending per beneficiary significantly exceeds the national average, raising concerns about inefficiency and possible fraud within the system, the New York Post reported.

During his remarks, Oz pointed to New York’s rapidly expanding home-care sector as one area where oversight may be lacking. He claimed the number of workers paid through Medicaid to assist elderly residents has surged in recent years, sometimes covering services that family members traditionally provided themselves, according to the New York Post.

Oz suggested that the program may be functioning partly as a political patronage system that funnels taxpayer money into jobs rather than focusing strictly on healthcare needs.

He also raised concerns about spending on social and community programs for seniors, questioning whether certain facilities that receive Medicaid funding are delivering meaningful services to the elderly residents they are supposed to help, the New York Post reported.

The federal official didn’t limit his criticism to New York.

Oz also took aim at California’s Medicaid program — known as Medi-Cal — saying the state has an unusually high number of hospice providers, particularly in Los Angeles. He claimed there are about 2,000 hospice facilities in Los Angeles alone, out of roughly 6,000 nationwide, a figure he described as suspicious and potentially indicative of fraud schemes involving false billing for end-of-life care, according to the New York Post.

Investigators are now examining whether some hospice operators have enrolled patients who were not actually terminally ill in order to collect government reimbursements.

Oz did acknowledge that fraud exists in states led by both political parties. For example, he pointed to problems in Florida involving companies that supply medical equipment and bill Medicaid, the New York Post reported.

However, he directed his sharpest criticism toward Democratic governors, accusing them of ignoring repeated warnings from auditors and regulators about vulnerabilities in their systems.