Over a year has passed since former leadership at Nassau University Medical Center filed a lawsuit against New York state, alleging a decades-long Medicaid scam that deprived the largest safety-net hospital on Long Island of as much of $1 billion in aid.
Following a turbulent year at NUMC, in which its board and leadership was ousted and replaced by mostly state appointments, the federal Committee on Oversight and Government Reform is investigating the same reports, according to a Jan. 16 letter sent to Dr. Mehmet Oz, the administrator for the Centers for Medicare & Medical Services within the U.S. Department of Health and Human Services.
The alleged Medicaid scheme
In late-2024, Nassau University Medical Center and its parent public-benefit corporation, the Nassau Health Care Corporation, accused the state for withholding $1.06 billion, plus interest, in Medicaid payments that the hospital said it was entitled to receive.
According to notice-of-claims documents distributed to reporters at a November 2024 conference in the lobby of the East Meadow hospital, a disproportionately large share of patients served by NUMC are eligible for Medicaid. NUMC is one of three public hospitals in New York that serve all patients, regardless of their ability to pay for medical care.
Because of the large number of Medicaid patients, the hospital receives federal funding through the Disproportionate Share Hospital program and the Upper Payment Limit program — both Medicaid programs authorized under the Social Security Act.
In order to receive payments from the federal government, states — in NUMC’s case, New York — must contribute their assigned share, commonly referred to as the state share or non-federal share, to hospital funding.
Typically, the state share matches the federal contribution.
According to the notice-of-claims documents, in 2024, NUMC was due to receive DSH payments totaling roughly $100.2 million. The federal share of the DSH payments was half of that total, around $50.1 million, which was transferred to the State Department of Health for distribution.
The documents alleged that the state orchestrated a ruse to mislead the federal government by requiring NUMC to front the state’s contractual share of the DSH funds from its own operating account. As a result, NUMC received only half of the DSH payments it was entitled to, because the state required the hospital to fund its own non-federal share.
The hospital alleged that it had been a victim of similar schemes since at least 2001.
Throughout 2025, a restructured board was implemented at the Nassau Health Care Corporation and NUMC, due to provisions that passed in the state’s budget in May. These changes ousted former leadership who brought the allegations against the state. Gov. Kathy Hochul appointed a new chairman of the board, Stuart Rabinowitz, a former president at Hofstra University. The hospital also welcomed Thomas Stokes as its new chief executive earlier this month.
On Jan. 15, the hospital announced it had received $109.6 million in funding from state leadership.
Letter to Dr. Mehmet Oz
In a Jan. 16 letter to Oz, U.S. Rep. James Comer, a Republican from Kentucky, and chair of the House Oversight Committee, said the committee is “investigating reports that the State of New York has been failing to abide by current law and properly match federal Medicaid funds.”
Comer stated that the committee is concerned that the state, and potentially other states, are failing to follow federal law by “misrepresenting the source of the non-federal share that the state is responsible for providing to trigger federal dollars under the Medicaid DSH program.”
Citing articles on the alleged Medicaid scheme by both the Herald and the New York Post, Comer said “reports on this scheme indicate that the state has engaged in this behavior for more than 20 years, costing taxpayers over $1 billion for one hospital alone, Nassau University Medical Center.”
The committee, he said, initiated an investigation in July of last year by sending a letter to Hochul and the state’s Executive Chamber, and has received some, but “nowhere near all” of the requested documents and communications.
Comer wrote that four members of Congress from New York wrote to U.S. Department of Health and Human Services Secretary Robert Kennedy, Jr. and the Acting Administrator for the Centers for Medicare & Medicaid Services Stephanie Carlton and “requested clarification on the obligation of states, including New York, to ensure timely and complete DSH payments to NUMC and other eligible hospitals.” They also requested a review of the situation that occurred at NUMC to determine if the state’s actions are in compliance with federal statutes and regulations.
Comer requested a briefing to assist in the investigation, as well as the issuing of a “formal clarification regarding the proper sourcing of non-federal share funds for the Medicaid DSH program.”
State’s response
State officials have long said the takeover at NUMC was necessary, citing a storied history of mismanagement that they say put the hospital into financial distress.
A spokesperson for the governor told the New York Post, covering the same matter at the hospital: “NUMC’s previous leadership left the hospital in a deep financial hole because of years of mismanagement and an outright refusal to meet the state’s basic oversight requirements, putting patient care at risk.”
The money provided to the hospital earlier this month, according to a release shared with the Herald, reflects the state’s “recognition of the hospital’s progress under new leadership and its commitment to stabilizing operations while preserving access to essential health care services for Long Island residents.”
