New York Attorney General Letitia James is facing renewed criticism from Republicans over her handling of the state's Medicaid Fraud Control Unit (MFCU). The unit's poor performance in criminal enforcement has led to a federal funding freeze, a move that gives Republicans a new line of attack against James as she campaigns for re-election.
Republicans argue that James failed to aggressively prosecute fraud, and federal watchdogs' findings now lend new weight to those claims. A recent report from the Health and Human Services Office of Inspector General concluded that New York's MFCU had become the lowest-performing large state unit in the nation for criminal Medicaid fraud enforcement, despite receiving $60 million annually in federal funding and employing more than 270 staff members.
The report found that the unit averaged just 53 fraud convictions from 2023 to 2025, the lowest among similar-sized Units. New York also ranked last in criminal indictments, securing fewer than 10 fraud indictments in four of the past five years. Federal officials further found that 34% of the unit's open cases were more than three years old, and 69% of referrals from the state's Medicaid Program Integrity Unit had remained pending for at least two years.
Republican challenger Saritha Komatireddy has made the state's struggling MFCU a key issue in the race, arguing that James' leadership decisions have left the unit ineffective at pursuing criminal Medicaid fraud. Komatireddy said, "Letitia James ran New York's Medicaid Fraud Unit into the ground, and now we know why: a deliberate leadership choice to open fewer cases and let them drag on for years."
The Republican Attorneys General Association also chimed in on the funding freeze, arguing it reflected broader differences between Republican and Democratic attorneys general in combating fraud. RAGA Executive Director Adam Piper said, "While Republican attorneys general are aggressively fighting fraud, waste, and abuse, Democrat AGs like Keith Ellison in Minnesota and Letitia James in New York knowingly aid and abet scams and fraud in their states."
James blasted the funding freeze, accusing the Trump administration of targeting New York for political reasons. Her office noted that HHS highlighted New York as one of four states responsible for half of all civil recoveries nationwide in fiscal year 2025. However, federal officials said that those results did not outweigh the decline in criminal enforcement.
Federal prosecutors in New York said they are expanding efforts to investigate Medicaid fraud and patient abuse. First Assistant U.S. Attorney John A. Sarcone III said, "Attorney General James' apparent inability to explain the New York MFCU's indefensible criminal enforcement performance is not a political distraction as she puts it."
The suspension of federal funding remains in effect through September 30 unless New York completes a series of corrective actions ordered by HHS. If those deficiencies are not corrected, the Office of Inspector General warned New York it could lose its federal Medicaid Fraud Control Unit grant for fiscal year 2027.
