Dr. Oz Says Chinese Organized Crime Is Milking New York's $110 Billion Medicaid Program

Dr. Mehmet Oz, the Trump administration's Medicaid administrator, says New York's $110 billion Medicaid program is being drained by fraud tied to Chinese organized crime.

Oz, who runs the Centers for Medicare & Medicaid Services, made the claim Sunday on 77 WABC's Cats Roundtable with host John Catsimatidis. He called the state's spending "sickening" and said criminal networks are exploiting the program's social safety net.

"Social safety net programs are being defrauded," Oz said. "They're being hurt oftentimes by foreign governments or foreign-run criminal syndicate organizations."

The Flushing Cluster

Oz recently toured Flushing, Queens, where 64 social adult day care centers operate, mostly serving elderly Chinese and Korean immigrants, according to the New York Post. He was joined on the tour by independent journalist Nick Shirley.

Oz alleges these centers, along with a dense cluster of pharmacies in the neighborhood, are generating fraudulent Medicaid bills. "There are a dozen pharmacies on one block," Oz said. "Why? They're all fake. They're taking these Medicare beneficiary numbers and manufacturing huge businesses to fund illegal activities."

He described the alleged scheme in specific terms: scammers bribe seniors for access to their Medicaid or Medicare cards, then bill the program for wheelchairs, medications, appointments, and tests the patients never received. "They pretend they're sending this really expensive wheelchair," Oz said. "They pretend that they're sending expensive random medications. They're doing appointments they never go to. Tests they never get."

Oz put a number on it: "These programs have generated $2.1 billion against New York Medicaid." He said the operations are "run, we believe, under the auspices of the Chinese organized criminal groups that are also doing human trafficking in the East Coast."

What's Proven, What Isn't

Oz did not name specific criminal organizations, individuals, or provide documentation for the $2.1 billion figure in his WABC interview, according to the Post's account. No indictments, arrests, or formal charges tied to this specific Flushing cluster have been reported alongside his comments.

Oz is a federal official making a serious allegation involving organized crime and human trafficking without naming who he's accusing. The claim should be read as an allegation from a named federal administrator, not an established legal finding. CMS opened an investigation into New York's Medicaid program earlier this year, and that inquiry appears to still be active. No public findings, charges, or settlement have been announced as of this writing.

The structural part of Oz's claim is stronger and harder to dispute. New York's Medicaid program is the most expensive per resident in the nation, a fact CMS has cited since opening its probe. Oz argues the state has built optional add-on programs, like social adult day care and personal care services, that go beyond what federal Medicaid normally covers. "Normally, the government doesn't pay for it," Oz said. "In New York, they've created a mechanism to pay for these programs." He called that a "feature not just a flaw" of the state's system, meaning he believes New York officials designed a spending structure that invites abuse rather than merely tolerating it by accident.

A state can build a wasteful, poorly-audited reimbursement system without any single group being a foreign crime syndicate. One claim is about program design and oversight failure; the other is a specific accusation against specific people who haven't been named or charged.

The Broader Context

Oz's comments land the same week federal prosecutors in Georgia announced a separate, unrelated health care fraud crackdown involving Georgia residents, according to Savannah's local NBC affiliate. Health care fraud enforcement has been a running theme across multiple states this summer, not something isolated to New York.

Meanwhile, New York's Medicaid program faces pressure from a different direction. Local outlets including Louisville's WLKY and Lexington's WLEX reported hundreds of people rallying against Medicaid cuts set to take effect in August, with families warning that reimbursement reductions could hit services like autism therapy for children. Those cuts stem from federal Medicaid funding changes moving through Congress this year, separate from the fraud allegations Oz is raising, but part of the same overall squeeze on the program.

New York state Medicaid officials have not issued a public response to Oz's specific $2.1 billion figure or the organized-crime characterization as of Sunday. Whether CMS's investigation produces referrals to the Justice Department, and whether any of the Flushing centers or pharmacies Oz toured face charges, remains an open question with no announced timeline.