Enforcement by the New York’s Office of Medicaid Inspector General has dropped in recent years across a range of benchmarks – a sign that the state’s anti-fraud efforts have slackened even as its Medicaid spending soared.

A review of annual reports from the office, known as OMIG, shows that the number of audits it has generated, the amount of money it has recovered and the number of cases it has referred to other agencies have all declined in recent years.

From 2019 to 2024, audits were down 62 percent, inflation-adjusted recoveries were down 27 percent and total referrals were down 44 percent (see table).

During that same period, New York’s Medicaid spending increased 65 percent, from $72 billion to $101 billion, and OMIG’s staffing rose 17 percent, from 391 to 472.

As a result, the number of completed audits per billion in spending dropped to its lowest level in the agency’s 20-year history, while the number of audits per full-time equivalent employee dropped to its second-lowest level (see charts).

Established in 2006 as an independent agency within the Health Department, OMIG is charged with defending against fraud, waste and abuse in Medicaid, a safety-net health plan for the low-income and disabled.

Under its original director, James Sheehan, the office developed a reputation for aggressive enforcement – and drew complaints from the state’s politically powerful healthcare industry. 

That changed in 2011, when a newly elected Gov. Andrew Cuomo removed Sheehan and signaled a less adversarial auditing approach. The agency’s staffing declined through Cuomo’s first two terms and dropped to an all-time low early during the first year of the pandemic.

Budgeted staffing levels have been growing on Governor Hochul’s watch but, as of this year, remain 9 percent below their 2011 peak.

Despite the additional personnel, the office’s output has generally been trending down. From 2019 to 2024, the number of finalized audits dropped from 1,842 to 702, the amount of money recovered (in constant 2024 dollars) fell from $302 million to $220 million, and the total cases referred to other agencies for follow-up dropped from 768 to 431.

These declines come at a time when the Trump administration is raising an alarm about Medicaid fraud and pressuring New York and other states to crack down.

Responding to a list of 50 fraud-related questions from the federal Centers for Medicare & Medicaid Services, state Health Department officials pointed to OMIG as evidence of “robust oversight.”

New York is one of only three states to have created an Office of Medicaid Inspector General dedicated solely to identification, prevention, and remediation of [fraud, waste and abuse] in the Medicaid program. OMIG’s statewide, multidisciplinary workforce consists of more than 480 staff as of March 2026––including auditors, investigators, nurses, pharmacists, data analysts, compliance specialists, program administrators, and legal and technical staff––and reflects the State’s substantial and sustained efforts in robust oversight to protect against [fraud, waste and abuse].

The state’s letter did not discuss OMIG’s declining productivity.

Another agency charged with Medicaid oversight – the attorney general’s Medicaid Fraud Control Unit – has also shown signs of diminishing effectiveness in recent years, which the Trump administration cited as a reason to suspend its federal funding.

A review of federal data by the Empire Center found that the unit’s enforcement activities have declined during the term of the current attorney general, Letitia James, and that its performance ranks among the worst in the U.S. when adjusted for the scale of New York’s Medicaid spending.