Medicaid Home Care Fraud: Risks, Safeguards & New Data Insights
The potential for fraud within state Medicaid programs, particularly concerning home care services, is receiving increased scrutiny. This comes as the Centers for Medicare & Medicaid Services (CMS) focuses on bolstering program integrity and identifying unusual billing patterns. Home care, also known as personal care or in-home supportive services, provides essential assistance with daily living activities – bathing, dressing, eating – for older adults and individuals with disabilities, allowing them to receive long-term care in their homes rather than institutions. Over 5 million people currently utilize Medicaid home care services, a figure that has grown significantly in recent years, making it a substantial component of Medicaid spending.
Why Does Medicaid Cover Home Care and Who is Eligible?
All states offer optional home care services under Medicaid, recognizing that many individuals require a level of care that would necessitate institutionalization without it. This reflects a broader shift towards prioritizing home- and community-based services (HCBS) over traditional nursing facility care, driven by both individual preferences and legal precedents like the 1999 Olmstead v. L.C. Supreme Court ruling, which affirmed the right of individuals with disabilities to receive care in the most integrated setting appropriate to their needs. The increased availability of home care also follows a trend where most enrollees now recieve home care.
Eligibility for Medicaid home care typically requires meeting both financial and functional criteria. Functional eligibility generally means demonstrating a need for an “institutional level of care” – a standard indicating that an individual requires 24-hour services and assistance with multiple activities of daily living (ADLs) beyond what family members can reasonably provide. This level of need often involves complex medical conditions and significant physical demands on caregivers. KFF focus groups with caregivers highlight the physical, mental, and emotional challenges of providing this level of support, emphasizing that family caregivers often require assistance to sustain such intensive caregiving roles.
Safeguards and Emerging Concerns
Recognizing the heightened risk of fraud in Medicaid home care – due to the services being delivered in private homes to potentially vulnerable individuals – both federal and state governments have implemented measures to enhance program integrity. These include provider credentialing and enrollment processes, data analytics to identify suspicious billing patterns, and, more recently, electronic visit verification (EVV) systems. The 21st Century Cures Act of 2016 mandated EVV for all Medicaid personal care and home health services, requiring the collection of six key data elements – member and caregiver identification, service type, location, date, and start/finish times – to verify service delivery.
While EVV implementation has been widespread, its impact on fraud rates is still being evaluated. An HHS Office of Inspector General (HHS OIG) report indicated a decrease in fraud convictions involving personal care service attendants after the full implementation of EVV, though the number remains significant. In fiscal year 2024, 298 fraud convictions involved personal care service attendants, representing 36% of all Medicaid fraud convictions through the Medicaid fraud control unit. The amount of money recovered from all convictions is small ($961 million in FY 2024) relative to Medicaid spending.
Minnesota as a Case Study
Recent attention has focused on potential fraud within Minnesota’s Medicaid program, prompting CMS to issue a letter to Governor Tim Waltz in January 2026, expressing concerns about compliance with federal requirements to prevent, detect, and address fraud, waste, and abuse. CMS initially threatened to withhold over $515 million in quarterly payments until Minnesota demonstrated satisfactory progress in addressing these issues. Minnesota has responded with a series of corrective actions, including terminating problematic programs, auditing providers, enhancing data analytics, and increasing oversight of managed care organizations. CMS’s approach in Minnesota represents a significant departure from historical practice, moving towards a more proactive stance of withholding funds in anticipation of potential fraud.
New Data and its Limitations
On February 14, 2026, CMS released a dataset containing provider-level spending data intended to help identify unusual billing patterns. While potentially valuable, the dataset’s limitations must be considered. It includes data on beneficiary counts, service volumes, and total spending per procedure, but lacks crucial details for comprehensive analysis. For example, the data aggregates all “personal care” services, failing to differentiate between varying levels of complexity and visit duration. It excludes institutional care and prescription drug spending – both significant components of Medicaid expenditures. Hospital care accounts for 37% of Medicaid spending, making its exclusion a notable limitation.
Interpreting spending data requires understanding the broader context of Medicaid policy, and trends. Increased spending on home care reflects deliberate state and federal efforts to expand access to HCBS as an alternative to institutionalization, particularly following the COVID-19 pandemic. Between 2019 and 2023, the number of Medicaid home care users increased by over 750,000 people. These expansions have generally received bipartisan support, reflecting a growing recognition of the benefits of allowing individuals to receive care in their homes.
What’s Next for Medicaid Program Integrity?
CMS is continuing to refine its approach to Medicaid program integrity, emphasizing data-driven oversight and proactive fraud prevention. The agency is likely to continue leveraging data analytics, including the newly released provider-level spending data, to identify potential areas of concern. States will be expected to strengthen their own program integrity efforts, including robust provider credentialing, effective EVV systems, and ongoing data monitoring. Further evaluation of the impact of EVV and other fraud prevention measures will be crucial to inform future policy decisions. The ongoing situation in Minnesota will likely serve as a test case for CMS’s new, more assertive approach to addressing Medicaid fraud and abuse.