Exclusive | New York spending $400m on senior daycare centers

At the Golden Town Adult Social Day Care in Chinatown on a recent Tuesday afternoon, a handful of elderly Chinese immigrants in their winter jackets picked at plates of lo mein and rice.

Lunch is supplied by a local restaurant, where prices for a typical dish range around $7 to 12.

But this is not a soup kitchen or lunch counter. It’s a medical facility, and taxpayers spend $85 a plate at Golden Town, thanks to a Medicaid money pit that invites savvy business owners to milk the system.

“They just come in for lunch,” an employee of Golden Town told The Post when asked what other services were provided by the center.  

They added transportation is offered for Golden Town’s 100 clients, but most prefer to walk, especially “if the weather is nice.”

Incredibly, the whole thing is completely legal, with the private owners of these centers taking advantage of a system which has very little oversight and costs New York taxpayers a $400 million tab annually, an investigation by The Post can reveal. 

The Social Adult Day Care centers (SADCs) are supposed to be exclusively for seniors with a “chronic illness or disability.”

If Medicaid rules were strictly interpreted, such centers should not be “letting in well-bodied seniors,” a state Medicaid official who spoke on the condition of anonymity told The Post.

“Basically, you shouldn’t see anyone going in those places who isn’t in a wheelchair or walker,” the source said.

But those standards aren’t enforced, and to operate, the rules are vague, with the centers required to provide “nutrition,” “structured activities,” and “socialization,” according to the Department of Health.

Across the river in Flushing, Queens, around 10 a.m. senior citizens began to scurry in and out of Excellence and Longevity Center — some to grab a to-go bag lunch before dashing off.

Inside, a group of clients aged 65+ played ping pong, rode stationary bikes, and enjoyed lunch.

The number of SADC centers has jumped from 40 in 2013 to almost 400 today, popping up in storefronts, apartments, and basements across the five boroughs, even though their offerings are barely distinguishable from city-run senior centers, which also provide transport, lunch and activities —, but for a fraction of the cost.

The Post visited 13 SADCs in Brooklyn, Queens and Manhattan over three days and found little evidence of any medical support being offered or administered.

And competition between facilities is intense, with owners jockeying for repeat visitors — because they can charge so much back to Medicaid.

A worker at Confucius Social Adult Day Care in Manhattan confirmed to The Post kickbacks and bribes are rampant in the industry — and some daycares lure seniors in with promises of grocery vouchers or cash if they sign up for their program, although he made it clear Confucius doesn’t engage in that practice and the center has also not been accused of any wrongdoing.

It’s not clear if even the seniors themselves know the difference between Adult Day Cares and state-run senior centers.

A spokesperson confirmed to The Post that the Department of Health “estimates approximately $400 million was reimbursed” through Medicaid for SADCs in 2024.

“The rules on this are extremely complicated,” Chris Pope, a health care policy expert with the Manhattan Institute, told The Post.

“This is sold as keeping people out of nursing homes. [But if] people aren’t really at risk of ending up in nursing homes, it’s definitely worth asking, is that legitimate?” he said.

There are a variety of different reasons for seniors to go to daycare centers and none of the businesses visited by The Post for this story have been accused of doing anything illegal.

In the mid-2010s under Gov. Andrew Cuomo, New York State aggressively switched to this “community-based” system for long term care, billed as a way to cut spending.

But it hasn’t worked and New York’s Medicaid spending has ballooned from $50 billion a year to a gob-smacking $96 billion in 2025, while the population of seniors has only grown by about 30 percent during that time.

A Medicaid fraud case revealed last June exposed $68 million was being stolen from taxpayers in a scheme involving two SADCs in Brooklyn. Owner Zakia Khan’s racket paid kickbacks and bribes to marketers for referring Medicaid recipients to her SADCs from 2017 onward.

In 2024, ElderServe, Inc. a healthcare provider, paid a $10.1 million settlement for billing Medicaid for services that weren’t provided, including SADC. In 2018 another provider, Centers Plan for Healthy Living, paid $1.6 million back to the state after it was caught enrolling seniors in SADCs who didn’t meet the requirements.

New York spends the most Medicaid money per patient than any other state and 77 percent more than the national average. New York’s spending is almost double the second-most costly state in per-person cost, Kentucky.

This year New York projects its spending will reach $115 billion, according to the NYS Comptroller’s Office, putting it neck-and-neck with California — which has double the population.

Texas and Florida, both more populous than the Empire State, spend a fraction of what New York does on Medicaid.

The costs of SADCs are counted alongside other Home and Community-Based Services (HCBS), by the state, which also includes the Consumer Directed Personal Assistance Program (CDPAP), which pays people by the hour to look after their elderly relatives in their homes, and is notoriously fraudulent.

HCBS is the largest single expense in New York’s Medicaid spending, costing taxpayers $10.6 billion in 2024, according to a breakdown reviewed by the Post.

“We’re seeing fraud all over the country. I think it’s time the federal government gets involved and starts looking into New York State, as well as New York City,” Republican city council member Vickie Paladino, of District 19 in Queens, told The Post.

“Let’s find out where all the money’s going. Let Minneapolis be the blueprint for these big blue cities. It’s time for a major audit.”

New York City’s 300 senior centers receive a lump sum for operations from the city budget, whereas SADCs are billed like a doctor’s visit — based on utilization, rather than enrollment.

“There are important distinctions. [Senior center] membership is open to all New Yorkers ages 60 and older. [They] serve meals, and in-person and virtual activities are designed to meet the needs of their members. 

“SADC’s serve adults with functional impairments and need a higher level of care than OACs can provide,” a spokesperson for the Department of the Aging told The Post.

Half of all complaints in 2022 about SADCs related to Medicaid fraud, according to the NYC Department for the Aging.

The state’s Medicaid fraud investigation unit referred 454 cases to the Attorney General’s office that year, but that office refused to comment on how many of those were being actively investigated.

The facilities at elder daycares can also fluctuate wildly. At Enriched Adult Day Care in New Utrecht, Brooklyn, administrator Olga took The Post on a tour of the facility, which included a beauty salon, arts and crafts room, a library, and ping pong table. A client was celebrating her 69th birthday and a handful of seniors sat around a table playing dominos. Olga said her facility serves 200 clients daily.

The vibe shifted down the street at another facility, New Century Adult Day Care, where in a large open room sat one lone senior tucked away in a corner, his reflection visible from a floor-to-ceiling dance studio-style mirror.

A man who appeared to be the manager hurried The Post out the door and refused to answer any questions.

Several SADCs mentioned and photographed for this story did not return requests for comment. None have been implicated in any illegal activity.