Medicaid Home Care Fraud: Risks, Safeguards & New Spending Data
- Potential fraud in state Medicaid programs is receiving increased scrutiny, with a particular focus on home care services – also known as personal care or in-home supportive services.
- The increased attention to potential fraud stems, in part, from concerns raised by the Trump administration, but the issue is complex.
- All states provide optional home care services under Medicaid.
Potential fraud in state Medicaid programs is receiving increased scrutiny, with a particular focus on home care services – also known as personal care or in-home supportive services. These services assist older adults and individuals with disabilities with essential self-care activities such as bathing, dressing, and eating, allowing them to receive long-term care outside of institutional settings. Currently, over 5 million people utilize Medicaid home care.
The increased attention to potential fraud stems, in part, from concerns raised by the Trump administration, but the issue is complex. While Medicaid home care is inherently vulnerable to fraud due to services being delivered in private homes to individuals who may be less able to advocate for themselves – including those with Alzheimer’s disease and other dementias – safeguards are in place. These safeguards, along with a growing understanding of how to detect and prevent abuse, are constantly being refined.
Why Does Medicaid Cover Home Care and Who is Eligible?
All states provide optional home care services under Medicaid. Unlike nursing facility care, which Medicaid is required to cover, home care is optional. However, states may only offer home care if they can demonstrate that the cost would be comparable to institutional care. This reflects a broader trend towards allowing individuals to remain in their homes and communities for as long as possible, a preference supported by many patients and families. This shift was also influenced by the 1999 Supreme Court ruling in Olmstead v. L.C., which affirmed that unjustified institutionalization of individuals with disabilities constitutes discrimination under the Americans with Disabilities Act.
Eligibility for Medicaid home care typically requires meeting both financial and functional criteria. Functional eligibility generally necessitates a level of need equivalent to that required for institutionalization. This means individuals must demonstrate they require assistance with multiple activities of daily living (ADLs), such as bathing, dressing, eating, toileting, and transferring, and often require 24-hour care. An institutional level of care generally exceeds what family members are capable of providing, considering the physical demands and time commitment involved. KFF focus groups with both paid and unpaid caregivers highlight the significant physical, mental, and emotional challenges of providing this level of care.
Safeguards Against Fraud and New Data Insights
Recognizing the heightened risk of fraud in home care, federal and state governments have implemented several measures to identify and prevent abuse. The 2016 21st Century Cures Act mandated electronic visit verification (EVV) for all Medicaid personal care and home health services provided in a recipient’s home. EVV systems require the collection of six key data elements: member information, caregiver details, service type, location, date, and start/end times. States were required to fully implement EVV by 2023.
Data from the Health and Human Services Office of Inspector General (HHS OIG) show a decrease in fraud convictions involving personal care service attendants following the full implementation of EVV. In fiscal year 2024, there were 298 convictions related to personal care attendants, representing 36% of all Medicaid fraud convictions – a decrease from an average of over 400 convictions and 43% of all convictions between 2015 and 2022. While the amount of money recovered from these convictions remains relatively small compared to overall Medicaid spending, the trend suggests that EVV is having a positive impact.
States also employ provider credentialing and enrollment processes, as well as data analytics, to identify potentially fraudulent activity. The recent experience in Minnesota illustrates this approach. In January 2026, the Centers for Medicare & Medicaid Services (CMS) notified Minnesota that its Medicaid program was not fully compliant with federal requirements to prevent fraud, waste, and abuse, leading to a potential withholding of over $515 million in quarterly payments. Minnesota responded by terminating problematic programs, auditing providers, enhancing claim reviews, and increasing training for both providers and employees.
Interpreting New Spending Data
On , CMS released a new dataset containing provider-level spending data intended to help identify unusual billing patterns. While potentially valuable, the dataset’s limited scope – only seven data fields – could lead to inaccurate conclusions. The data show that personal care is the largest expenditure within the Medicaid program, but this broad category encompasses a wide range of services with varying complexities and durations. The dataset also lacks information on institutional care and prescription drug costs, which represent significant portions of Medicaid spending.
It’s important to consider the context of increased spending on home care. A long-term trend has seen a shift away from institutional care towards home and community-based services, driven by patient preferences and policy changes. The COVID-19 pandemic further accelerated this trend, highlighting the challenges of nursing facilities and the desire for safer, more personalized care at home. Between 2019 and 2023, the number of Medicaid home care users increased by over 750,000 individuals. Investments in home care generally receive bipartisan support, reflecting a shared goal of supporting individuals and families in their preferred care settings.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.