Received a Medicaid Investigation Letter in New York City

A Medicaid investigation letter in New York City can come from several different agencies, depending on whether you are a recipient, a provider, or both: the Human Resources Administration (HRA) Bureau of Fraud Investigation, the Medicaid Fraud Control Unit (MFCU) of the Office of the Attorney General, the Office of the Medicaid Inspector General (OMIG), or HHS-OIG on the federal side. Each runs a different process. None of them sends letters lightly.

Whatever the letterhead says, the rule is the same: do not call the investigator. Call us first at 212-233-1233 or email [email protected]. The consultation is free and confidential by law.

Who Sent the Letter and What It Means

HRA Bureau of Fraud Investigation

If the letter comes from HRA or the Bureau of Fraud Investigation — often at 375 Pearl Street — the investigation is into recipient-side Medicaid issues: unreported income, unreported household members (frequently a spouse or partner whose income would have changed eligibility), or assets that were not disclosed at application or recertification.

Medicaid Fraud Control Unit (OAG)

The MFCU sits in the Office of the Attorney General and handles provider-side Medicaid cases. An MFCU letter or subpoena to a doctor, dentist, pharmacy, home-care agency, DME supplier, or behavioral-health provider signals a serious investigation that can lead to indictment, civil False Claims Act exposure, and exclusion from Medicaid.

Office of the Medicaid Inspector General (OMIG)

OMIG conducts audits, recoups overpayments, and refers matters to MFCU when criminal exposure appears. OMIG audit demands and information requests should be answered by counsel.

HHS-OIG (Federal)

When the federal share is implicated, HHS-OIG may issue an administrative subpoena under 5 U.S.C. App. § 6(a)(4). These investigations sometimes run alongside US Attorney grand jury subpoenas in the SDNY or EDNY.

What the Agency Already Has

By the time the letter is sent, investigators have typically pulled:

Medicaid application and recertification paperwork
Wage records from the Department of Labor and the IRS
Bank statements obtained by subpoena
Utility, vehicle, and tax records suggesting household composition
For providers: billing data, patient charts, prescription histories, and (often) statements from former employees

What to Do Now

Save the letter. Photograph the envelope, the postmark, and the contents. Note the investigator's name and the response deadline.
Do not call. Not to schedule, not to ask questions, not to explain.
Do not produce documents until counsel has reviewed the request and screened for privilege.
Do not talk to family or coworkers about the case. Statements to third parties are not privileged.
If you are a licensed professional, do not self-report yet — reporting decisions should be coordinated with criminal strategy.
Call counsel before the deadline. A short letter from counsel often buys time and changes the tone of the investigation.

Types of Letters You May Have Received

"Medicaid investigation letter" is a category, not a single document. The letter on your desk is one of several distinct things, and the right response depends on which one it is.

Notice of Investigation / Appointment Letter (HRA-BFI). Schedules an interview at HRA. Recipient-side. Do not appear without counsel.
OMIG Audit Engagement Letter. Opens an audit, identifies the audit period, and demands records. Provider-side. Triggers retention obligations under 18 NYCRR Part 504.
OMIG Notice of Proposed Agency Action. Proposes an overpayment, sanction, or exclusion. Starts the clock on a Part 519 administrative hearing.
Demand for Repayment. Demands a specific dollar amount. May be the end of an audit or the start of a recovery action. Often negotiable.
MFCU Subpoena Duces Tecum. Compels production of records to the Attorney General's office. Criminal investigation. Provider-side typically, but sometimes recipient.
Grand Jury Subpoena (SDNY / EDNY). Federal criminal investigation. Compels records or testimony.
HHS-OIG Administrative Subpoena. Compels records under federal administrative authority.
Target Letter. Formal notification that you are a target of a grand jury investigation. The most serious of all and the clearest signal to retain counsel immediately.
Notice of Proposed Exclusion. HHS-OIG or OMIG notice that you are about to be excluded from Medicaid. Short response window.
Civil Investigative Demand (CID). Civil False Claims Act tool. Document and deposition demands.

Timelines You Need to Know

Almost every Medicaid letter has a deadline buried in it. Missing the deadline forfeits rights. Common ones:

OMIG draft audit objections — typically 30 days from the draft report.
OMIG Part 519 hearing demand — 60 days from the final agency determination. Jurisdictional.
HRA-BFI interview — usually two to three weeks out, often rescheduled by counsel.
MFCU subpoena — the return date on the face of the subpoena, generally extendable by stipulation.
HHS-OIG subpoena — the response date on the subpoena; failure to respond can be enforced in federal court.
Exclusion notices — 30 days to request reconsideration in many cases.
Notice of Intent to Recover — varies; read the letter.

If the deadline is short and counsel cannot be retained in time, a written extension request from your prospective counsel usually buys two to four weeks. Investigators routinely grant them.

Why You Do Not Call the Investigator

The investigator's job is to build a case. Friendly conversation is evidence-gathering. Anything you say can and will be used at a Part 519 hearing, in a civil False Claims Act action, in a state criminal case, or in a federal grand jury — without warning and without re-interview.

"Voluntary statements" are particularly dangerous. They are not Mirandized because the interview is not technically custodial. The investigator does not have to caution you that what you say will be used against you, because by participating without counsel you have effectively waived the warning. Inconsistent statements between an interview and a later production produce false-statement charges under PL Article 210, Social Services Law § 145-b, or 18 U.S.C. § 1001, all on top of whatever was originally being investigated.

The other reliable trap is informal email and text messages with the investigator. Those land in the case file the same way a formal interview transcript does.

If You Are a Medicaid Recipient

For recipients, the most common allegations are:

Unreported earned income or self-employment income.
An unreported spouse, partner, or other household member.
Assets — bank accounts, real estate, vehicles, inheritances — not disclosed at application or recertification.
Five-year lookback transfer issues for long-term-care Medicaid.
SSI/SSDI overlap inconsistencies.
Out-of-state residence during a period of coverage.

Most recipient cases resolve civilly with a repayment agreement and no criminal record. The path to that resolution runs through counsel. Walking into the HRA interview alone is the single most common reason a civil case turns criminal.

If You Are a Medicaid Provider

For providers, the questions are different. The first task is to identify the agency, the scope, and the theory. The second is to issue a litigation hold and preserve every record — charts, billing software extracts, employee files, email, and text messages — that could be responsive. Destroying or altering anything after a subpoena arrives is itself a crime under PL Article 215 (Tampering with Physical Evidence) and 18 U.S.C. § 1519, and converts a defensible billing dispute into a felony.

Provider matters involve several parallel concerns at once: the audit or criminal case itself, professional license discipline before OPMC or OPD, Medicaid enrollment status under 18 NYCRR Part 504, exclusion exposure under 18 NYCRR Part 515 and 42 U.S.C. § 1320a-7, malpractice insurance reporting, hospital privileging reporting, and (for corporations) board notification and disclosure-controls duties. We coordinate all of them. See professional license defense.

What an OMIG Visit Looks Like

If the matter has reached an in-person interview at OMIG offices, expect a multi-hour session in a small conference room with one or two auditors and, sometimes, an MFCU investigator. The auditors will have a binder of claims, a list of recipients, and a chronology. They will ask open-ended questions designed to lock in answers, then closed questions to test inconsistencies. They take notes. There is no court reporter, but the agent's contemporaneous notes are admissible.

We do not send clients into those meetings unprepared. Where an interview makes sense at all, we prepare with the same care we would for grand jury testimony — review of the records, anticipated questions, scope agreements in writing, and a clear understanding of what topics are off limits.

Appeals and Hearings

Most agency adverse determinations carry appeal rights:

18 NYCRR Part 519 — OMIG administrative hearings before an ALJ at the Department of Health, with discovery, witnesses, and a written decision.
CPLR Article 78 — judicial review in Supreme Court of final agency action.
HHS Departmental Appeals Board — review of HHS-OIG exclusion and CMP decisions.
Fair hearings for recipient eligibility determinations under 18 NYCRR Part 358.

The deadlines are short and the process is paper-heavy. Hearings are won on the record — the record we build during the audit phase.

What Can Happen Next

Civil overpayment. Most recipient cases settle here with a repayment plan.
Administrative disqualification. An IPV-like hearing for recipients; corrective-action plans or exclusion for providers.
Criminal prosecution. Welfare fraud (PL Article 158), grand larceny (PL Article 155), offering a false instrument (PL Article 175), and on the federal side healthcare fraud (18 U.S.C. § 1347).
Civil False Claims Act recovery at treble damages under federal law (31 U.S.C. §§ 3729–3733) and the New York State False Claims Act (State Finance Law §§ 187–194).
Exclusion from Medicaid and Medicare under 42 U.S.C. § 1320a-7 and 18 NYCRR Part 515.

For the audit and investigation phase generally, see our Medicaid investigation attorney page. If the case is already charged, see Medicaid fraud attorney and Medicaid fraud lawyer. For the broader practice, see healthcare fraud lawyer and criminal defense lawyer.

If you received a Medicaid investigation letter, call us at 212-233-1233 or email [email protected].