Albany, New York — Rep. Elise Stefanik (R-NY) is calling on Attorney General Pam Bondi and the Justice Department to intervene in what she describes as a Medicaid funding crisis threatening hospitals across upstate New York, escalating a dispute that sits at the intersection of health care policy and her 2026 gubernatorial campaign.
In a letter shared with the Washington Examiner, Stefanik accused Gov. Kathy Hochul’s administration of mismanaging Medicaid Direct Payment Template (DPT) programs and withholding funds owed to North Star Health Alliance hospitals for services provided years ago. Stefanik warned that facilities in St. Lawrence and Jefferson counties are nearing closure, which she said would have severe consequences for patient access, local economies, and military readiness at Fort Drum.
North Star CEO Rich Duvall confirmed that funding has stalled despite regulatory approvals, saying the delay jeopardizes safety-net hospitals and the patients they serve. Stefanik argued the state’s DPT system is vulnerable to payment disruptions because reimbursements depend entirely on claims flowing through Medicaid managed care organizations, with no automatic reconciliation when payments fail.
At her sharpest, Stefanik accused Hochul of using Medicaid dollars as a “personal slush fund,” urging the DOJ to compel payment and investigate potential mismanagement. Hochul’s office forcefully denied the allegations, saying New York is not withholding federal Medicaid funds and counter-accusing Stefanik of backing federal legislation that cut Medicaid and harmed rural hospitals.
The Justice Department confirmed receipt of Stefanik’s letter but declined further comment.
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