Congresswoman Elise Stefanik (R-NY), Chairwoman of House Republican Leadership, has called for a federal investigation into the New York State Department of Health (DOH) regarding its management of federal Medicaid funds. In a letter to U.S. Attorney General Pamela Bondi, Stefanik urged the Department of Justice to investigate what she described as mismanagement under Governor Kathy Hochul’s leadership. She cited concerns that this alleged mismanagement has left rural hospitals, including North Star Health Alliance (NSHA) hospitals, Carthage Area Hospital, and Claxton-Hepburn Medical Center/Campus, at risk of closure.
“Seven million New Yorkers rely on Medicaid for healthcare services. North Star Health Alliance hospitals serve the geographically isolated St. Lawrence and Jefferson Counties, where Federal tax dollars support crucial programs for the surrounding population,” Stefanik wrote. “The closure of Ogdensburg’s only acute care hospital would have devastating economic impacts on the region as well. North Star officials have informed my office that 1,700 jobs are threatened in the event that the state forces a closure by not releasing funds owed.” She continued, writing, “Additionally, North Star Health Alliance’s hospitals and affiliates form a critical, integrated healthcare network that directly supports Fort Drum, home of the United States Army 10th Mountain Division.”
Stefanik also stated: “Governor Hochul has long used our taxpayers’ Medicaid contributions like a personal slush fund for her own benefit. The State’s refusal to release promised funding and resolve procedural delays is manufacturing a crisis that threatens the health, economy, and security of the North Country.”
In her letter, Stefanik asked the DOJ to examine several specific issues: shortfalls in claims volume during February-April 2024 due to cyberattacks; lag times in payment of claims by Managed Care Organizations (MCOs); whether DPT add-ons were applied to late or adjusted claims; evidence of underpayment compared to expected CMS-approved DPT amounts; disputes between hospitals and MCOs over missed payments; and whether any binding guidance was issued requiring MCOs to account for lost claims.
A timeline included with Stefanik’s letter outlines events such as cyberattacks disrupting operations at NSHA starting in September 2023 and again nationally in February 2024 with Change Healthcare. These incidents reportedly affected financial workflows and delayed claims processing—key factors linked to underpayments through New York’s Directed Payment Template (DPT) programs.
Stefanik’s office highlighted ongoing challenges throughout 2024 and 2025 involving staff turnover at NSHA, strained relations with DOH due to data reporting issues, cash constraints leading to deferred vendor payments, expanded data requests from DOH diverting resources from core functions, and months-long pauses in regular meetings between NSHA and DOH.
According to Stefanik’s letter, New York’s DPT programs are approved by Centers for Medicare & Medicaid Services (CMS) as add-on payments tied directly to paid Medicaid Managed Care claims. If claims are not processed or paid—such as during cyberattack disruptions—DPT funding is not triggered. Public sources confirm significant disruptions occurred after the February 2024 Change Healthcare cyberattack.
Stefanik alleges that under Governor Hochul’s leadership there was no public evidence showing state action directing MCOs to retroactively apply DPT add-ons for affected claims.
Elise Stefanik currently serves in Congress representing New York’s 21st district since 2015 after replacing Bill Owens. She was born in Albany in 1984 and resides in Schuylerville. Stefanik graduated from Harvard University with an AB degree.
https://stefanik.house.gov/2025/12/stefanik-demands-federal-investigation-into-hochul-s-nys-doh-medicaid-mismanagement-as-north-country-hospitals-face-closure-following-funding-lapse
