New York Attorney General Letitia James is facing criticism after the Trump administration suspended federal funding for the state’s Medicaid Fraud Control Unit (MFCU), citing years of poor criminal enforcement performance and leadership decisions that federal officials say left fraud investigations lagging.

Funding Freeze

The federal action gives Republicans a new line of attack against James as she campaigns for re-election. Republican challenger Saritha Komatireddy has made the state’s struggling Medicaid Fraud Control Unit a key issue in the race, arguing James failed to aggressively prosecute fraud.

The Health and Human Services Office of Inspector General (OIG) found that New York’s Medicaid Fraud Control Unit had become the lowest-performing large state unit in the nation for criminal Medicaid fraud enforcement despite receiving roughly $60 million annually in federal funding and employing more than 270 staff members.

The report also found New York 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, while 69% of referrals from the state’s Medicaid Program Integrity Unit had remained pending for at least two years, contributing to a growing investigative backlog.

Response to Funding Freeze

James blasted the funding freeze, accusing the Trump administration of targeting New York for political reasons. James’ office noted that HHS highlighted New York as one of four states responsible for half of all civil recoveries nationwide in fiscal year 2025.

Original reporting: Fox News (HLL/CB) — read the source article.