In one NYC neighborhood, dozens of adult daycares bill millions to taxpayers. Now the feds have questions.

Dozens of Medicaid-funded social adult daycare centers are packed into one New York City neighborhood, a CBS News data analysis has found. 

The proliferation of the facilities has caught the attention of federal authorities, who confirmed they are investigating across New York whether the rapid spread of centers catering to seniors is indicative of fraud.

“[It] begs the question: How many social adult daycare centers do you need?” Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, told CBS News.

Social daycare facilities offer meals, personal care, social activities and other assistance to seniors and  people with disabilities. Those services are then billed to the state government and covered by federal and state tax dollars. 

The costs have been rising — especially in New York state, a CBS News data analysis found. Medicaid paid adult daycare providers $3.35 billion nationwide in 2024, and 17% of that money went to the 375 facilities across New York state — more than any other state. New York spending on these adult daycares ballooned in recent years, with the bill to taxpayers nearly quadrupling from 2018 to 2024. 

Those numbers have not gone unnoticed. Investigations are underway into some social adult daycare centers across New York with potential federal action against them anticipated, CBS News has learned. 

The epicenter of the spike in spending is the bustling neighborhood of Flushing, Queens, the densest cluster of social adult daycare facilities in the country: 64 within a one-mile radius, according to a CBS News analysis of Medicaid data.

The facilities in Flushing bill Medicaid for the equivalent of more than 90% of local Medicaid-eligible seniors. 

Enrollment at these facilities is far outpacing the population growth for seniors in the area, CBS News found.  From 2018 to 2024, the neighborhood’s Medicaid-eligible senior population grew about 20%, the same as the rest of the country. But the number of seniors that its social adult daycares billed for nearly quintupled — up 390%. 

So the question for investigators becomes: are facilities legitimately billing for so many more people here or are they submitting fraudulent claims?

A spokesperson for the New York State Department of Health told CBS News the state has taken action in the past to root out abuses in Medicaid, including instituting a new tracking process and enhanced oversight and compliance reviews. Since 2021, the agency has referred 387 centers for investigation and a third of those were elevated to the Office of the Attorney General for law enforcement action, the spokesperson said. 

“The Governor and the Department have taken strong action in recent years to control costs and root out abuses while preserving and improving quality of care,” the spokesperson said in a statement.

Allegations of fraud in Medicaid and other federal programs have drawn increased attention in recent years. 

A CBS News investigation earlier this year found an extreme concentration of taxpayer-funded hospices in Los Angeles County, with hundreds of hospice offices showing multiple red flags for fraud. State prosecutors filed charges in April against 21 suspects in an alleged hospice fraud scheme that California Attorney General Rob Bonta said defrauded the state of $267 million. Federal authorities have also brought health care fraud charges in recent months.

Federal prosecutors in Minnesota allege billions of dollars in taxpayer money may have been lost to fraud in several high-risk programs in recent years, including childcare centers and programs for children with autism. And state officials in Mississippi alleged in 2021 that over $77 million in Temporary Assistance for Needy Families money was misspent.