Medicaid Home Care Under Scrutiny: Fraud Concerns and Shifting Priorities
Potential fraud in state Medicaid programs, particularly within home care services, is gaining renewed attention. Over 5 million Americans rely on Medicaid home care – also known as personal care or in-home supportive services – to help with essential daily activities like bathing, dressing, and eating, allowing them to remain in their homes instead of institutions. While a vital service, the Trump administration has recently highlighted Medicaid home care as a potential source of fraud.
Why Home Care is Vulnerable to Fraud
Medicaid home care is susceptible to fraudulent activity due to the nature of the service. Care is delivered in patients’ homes, often to individuals who are vulnerable and may have difficulty advocating for themselves, including those with Alzheimer’s and other dementias. However, safeguards are in place, and the issue is complex.
Safeguards and New Data: A Closer Appear
Federal and state governments have implemented measures to detect and prevent fraud in Medicaid home care. These include provider credentialing, enrollment processes, and data analytics. In 2016, the 21st Century Cures Act mandated electronic visit verification (EVV) for all Medicaid personal care and home health services provided in the home. EVV requires the collection of six data elements – member information, caregiver details, service type, location, start and end times – to enhance fiscal integrity.
Recent data suggests these efforts are having an impact. While fraud convictions involving personal care service attendants averaged over 400 each year from 2015-2022, that number decreased to 298 in fiscal year 2024, representing 36% of all Medicaid fraud convictions. The total amount recovered from all convictions remains relatively small compared to overall Medicaid spending.
Minnesota’s Case: A Shift in CMS Approach
A recent case in Minnesota illustrates a significant shift in the Centers for Medicare & Medicaid Services (CMS) approach to fraud. CMS issued a letter to Minnesota’s governor, citing non-compliance with federal requirements and threatening to withhold over $515 million each quarter until corrective actions were taken. This “compliance process” – withholding funds in anticipation of future fraud – marks a departure from previous practices of denying claims for impermissible payments and working collaboratively with states to recoup funds.
Minnesota has responded by terminating certain programs, auditing providers, adding new licensure requirements, and enhancing data analytics, and training.
The Rise of Home Care and Spending Trends
The increasing prevalence of Medicaid home care reflects both patient preference and policy changes. All states provide optional home care services to individuals whose needs warrant institutionalization. This shift was also influenced by the 1999 Supreme Court ruling in Olmstead v. L.C., which affirmed the right of individuals with disabilities to receive care in the most integrated setting possible.
Between 2019 and 2023, the number of Medicaid home care users increased by over 750,000. Long-term care spending has dramatically shifted towards home care, growing from 1% of all long-term care spending in 1981 to 64% in 2023. This trend accelerated during the COVID-19 pandemic, as states expanded access to home care and increased payment rates for workers.
New Data Release: Opportunities and Limitations
On February 14, 2026, CMS released a dataset with provider-level spending data intended to help identify unusual billing patterns. While potentially useful, the data is limited. It includes information on beneficiaries seen, service counts, and total spending per procedure, but excludes institutional records and prescription drug costs – significant portions of overall Medicaid spending.
Interpreting spending data requires context. Increased spending on home care often reflects deliberate policy choices to prioritize home-based care over institutionalization.
Pro Tip:
Understanding the nuances of Medicaid home care spending requires considering both potential fraud risks and the broader policy context driving the shift towards home- and community-based services.
Looking Ahead: Balancing Access and Accountability
The future of Medicaid home care hinges on striking a balance between ensuring access to vital services and maintaining program integrity. Continued investment in data analytics, electronic visit verification, and robust provider oversight will be crucial. States and the federal government must operate collaboratively to address fraud risks while supporting the growing demand for home- and community-based care.
FAQ
Q: What is Medicaid home care?
A: Medicaid home care provides assistance with daily living activities to individuals who need an institutional level of care but prefer to remain in their homes.
Q: Is Medicaid home care susceptible to fraud?
A: Yes, due to the nature of the service and the vulnerability of some recipients, but safeguards are in place.
Q: What is electronic visit verification (EVV)?
A: EVV is a system that electronically verifies home care visits to ensure services were actually provided.
Q: What is CMS doing to address fraud in Minnesota?
A: CMS is threatening to withhold federal funds until Minnesota addresses concerns about compliance with federal requirements.
Q: Is Medicaid home care spending increasing?
A: Yes, significantly, as states prioritize home- and community-based care over institutionalization.
Want to learn more about Medicaid and long-term care? Explore additional resources on the KFF website.
