Potential fraud in state Medicaid programs is getting renewed attention, with a recent emphasis on home care, also known as personal care or in-home supportive services. Home care helps with self-care activities such as bathing, dressing, and eating for older adults and people with disabilities. KFF estimates that over 5 million people use Medicaid home care, which allows individuals to receive long-term care without moving into an institution. The Trump administration has recently pointed to Medicaid home care as a source of fraud. Medicaid home care is susceptible to fraud because services are provided in people’s homes to vulnerable individuals who may be less able to advocate for themselves, including some with Alzheimer’s and other dementias. However, there are also additional safeguards against fraud in Medicaid home care compared to other types of Medicaid services. This issue brief describes how Medicaid home care operates, including who is eligible, the various systems in place to promote program integrity in its delivery, and challenges using data newly released by the Centers for Medicare and Medicaid Services (CMS). Key takeaways include the following.
- All states provide optional home care services to people whose needs are sufficient to warrant institutionalization. An institutional level of care is generally beyond what family members are capable of providing.
- Recognizing the higher risk of fraud in Medicaid home care, federal and state governments have implemented additional tools to identify and detect home care fraud. States, along with the federal government, use provider credentialing and enrollment and data analytics to help prevent fraud. There has been new attention on fraud in Minnesota’s Medicaid program recently, but the fraud, and the state’s work to root it out, date back at least 18 months.
- On February 14, 2026, CMS released a dataset with provider-level spending data that the agency suggests could be used to identify unusual billing patterns for specific services, states, or providers, but the limited data could result in mistaken conclusions. Home care is a major emphasis of the new dataset, which stems from the fact that second to hospital spending, long-term care is the second-largest source of Medicaid spending. Although Medicaid long-term care was historically provided primarily in nursing facilities, most enrollees now recieve home care.
Why does Medicaid cover home care and who is eligible for services?
All states provide optional home care services. Under Medicaid, states are required to cover long-term care provided in nursing facilities, but not home care, which has been referred to as the “institutional bias” in Medicaid. States may only provide home care if they can demonstrate that providing the services would cost no more than institutional care would cost for an individual. All states choose to provide optional home care to people who would otherwise require institutionalization. The increased availability of home care reflects people’s preferences to remain in their homes. Expansions of Medicaid home care services also followed the 1999 Supreme Court ruling in Olmstead v. L.C., which declared that unjustified institutionalization of people with disabilities by a public entity (including Medicaid) is a form of discrimination and not permissible under the 1990 Americans with Disabilities Act. Even though nearly all of the benefits are optional for states to provide, the majority of people who use long-term care now do so at home.
Medicaid home care use is limited by eligibility criteria that generally make it only available to people whose needs are sufficient to warrant institutionalization. To be eligible for Medicaid home care, applicants must meet both financial and “functional” eligibility criteria. Functional eligibility for Medicaid home care, which is evaluated by assessment tools developed by states, generally requires individuals to demonstrate that they need an institutional level of care. There are no recent data available about states’ specific definitions for an institutional level of care, but it generally indicates that people would require 24-hour services and assistance with multiple activities of daily living (ADLs), which include bathing, dressing, eating, toileting, continence, and transferring between bed and other settings.
An institutional level of care is generally beyond what family members are capable of providing. People who require an institutional level of care generally have complex needs that require both skilled and unskilled services and often require services to be provided around the clock. In some cases, family caregivers may not have the medical expertise to provide services, but there are also challenges related to the physical demands of the job and having time to provide such intensive services. Helping family members to bathe, dress, and toilet themselves often requires the strength to lift them, which not all family members have. The time required to provide such intensive services also makes it difficult for family caregivers to provide this level of care and maintain employment or take care of their own health needs. KFF’s focus groups with paid and unpaid family caregivers provide detail that caregiving is physically, mentally, and emotionally challenging; and that family caregivers cannot provide an institutional level of care without supports. To help people requiring an institutional level of care remain at home, Medicaid supports family caregivers by providing supplemental paid care and with direct supports, such as respite care, training, and in some cases payments to the family caregivers to reflect the fact that caregiving makes it impossible to maintain outside employment.
Recognizing the higher risk of fraud in Medicaid home care, federal and state governments have implemented additional tools to identify and detect home care fraud. In 2016, Congress passed the 21st Century Cures Act, which requires states to implement electronic visit verification for all Medicaid personal care and home health services if a visit is made to a person in the home. State’s electronic visit verification must include six data elements: member receiving the services, caregiver providing the service, type of service, location of the service delivery, date of the service, and time the service begins and ends. Electronic visit verification was established to help promote fiscal integrity for Medicaid home care, and states had until 2023 to fully implement the requirements. The Health and Human Services Office of Inspector General (HHS OIG) has an active project underway to evaluate the availability and completeness of the electronic visit verification data and how states are using the data to promote program integrity.
An HHS OIG report finds that in fiscal year 2024, there were 298 fraud convictions “involving personal care service attendants” from the Medicaid fraud control units, which was 36% of all fraud convictions through the Medicaid fraud control unit, more than that of any other provider type. Although significant, the number of fraud convictions (total and as a percentage of all convictions) is notably lower than the average from 2015-2022 before electronic visit verification was fully in place. During the prior years, fraud convictions involving personal care service attendants averaged well over 400 each year and 43% of all convictions. The amount of money recovered from all convictions is small ($961 million in FY 2024 or $536 million on a 5-year average basis) relative to Medicaid spending.
States, along with the federal government, use provider credentialing and enrollment and data analytics to help prevent fraud. Providers must meet certain state and federal requirements to be eligible to participate in the Medicaid program. Additionally, states use data analytics to confirm that providers have not previously been convicted of committing Medicare fraud or fraud in a different state’s Medicaid program, and to identify unusual billing patterns for specific services or by specific providers. When Minnesota uncovered fraud in its Medicaid home care programs in 2024, the state undertook a series of actions to address that fraud, including targeting specific providers and specific types of services (Box 1).
Box 1: Minnesota’s Actions Towards Maintaining Program Integrity for Medicaid Home Care
In January 2026, CMS administrator Dr. Mehmet Oz issued a letter to Minnesota governor Tim Waltz notifying him that the state of Minnesota’s Medicaid program was not in compliance with federal requirements that help to prevent, detect, and address fraud, waste, and abuse. The letter noted that CMS would start withholding a minimum of $515 million each quarter until CMS determined that the state had satisfactorily met federal requirements.
There has been fraud in Minnesota’s home care programs, and the state has taken steps to address it. On December 5, 2026, CMS gave the state 26 days to send a corrective action plan to address fraud. CMS rejected the plan within one week of receiving it. Minnesota is appealing CMS’ decision and submitted a revised corrective action plan on January 30, 2026.
The state outlines taking the following actions in response to combating home care fraud:
- Terminating the Housing Stabilization Services program entirely (one of the recent sources of fraud),
- Auditing autism services providers and conducting onsite visits (another source of recent fraud),
- Adding new licensure requirements for autism centers,
- Pausing admission of any new providers into 13 high-risk Medicaid services,
- Conducting unannounced site visits for providers of high-risk services as part of the regular revalidation process,
- Enhancing review of claims before they are paid including with increased use of data analytics and Artificial Intelligence (AI),
- Increasing training for Medicaid providers and employees, and
- Increasing oversight over Medicaid managed care organizations.
CMS’ approach towards fraud in Minnesota is a significant departure from prior practice. Historically, CMS has used disallowances to deny claims for payments that have been deemed impermissible and has worked collaboratively with states to recoup the funds. Under its new process — known as the “compliance process” — CMS can withhold future payments if the Administrator determines that there is a “failure to comply substantially” with one or more Medicaid requirements. In Minnesota’s case, CMS is effectively withholding funds in anticipation of future fraud.
What do newly released data about home care spending mean?
On February 14, 2026, CMS released a dataset with provider-level spending data that the agency suggests could be used to identify unusual billing patterns for specific services, states, or providers, but the limited data could result in mistaken conclusions. The data include seven fields, including the number of beneficiaries seen, counts of services, and the total spending for each procedure that is included in the data, but they omit significant elements important for pursuing meaningful analyses. With the data release, CMS posted figures to illustrate how the data could be used, with one of the figures displaying total spending among the top 20 procedures in the Medicaid data. The data show that personal care (the primary home care benefit) is the top procedure in terms of spending. However, the personal care “procedure” encompasses a wide range of services that may vary in complexity, difficulty, and length of visit (ranging from less than 30 minutes up to an entire day). In comparison, spending on emergency department visits is split among multiple procedure codes based on the complexity of the case and spending on psychotherapy is split based on the length of the visit (e.g., 30-minute visits and 45-minute visits are considered separate procedures). The data exclude all institutional records and all information about prescription drugs, which are significant shares of Medicaid spending, with hospital care accounting for 37% and being the single largest source of Medicaid spending.
Understanding the context for increases in home care spending is important context for interpreting spending data. Increased spending on Medicaid home care reflects state and federal policy choices to increase the availability of home care in lieu of institutional care when feasible. Analyses of federal spending on long-term care show that home care has grown from 1% of all long-term care spending in 1981 to 64% in 2023. Although the shift away from institutional care dates to the 1980s, the COVID-19 pandemic shone a new spotlight on the challenges of institutional care and illuminated the extent of unmet need for home care. In response, states expanded the availability of home care, increased payment rates for workers in home care settings, and made other efforts to help people remain at home rather than institutional settings. Between 2019 and 2023, the number of Medicaid home care users increased by over 750,000 people. In general, expansions of home care have garnered bipartisan support, with both 2024 presidential candidates expressing support for investments in family caregivers and more at-home services for people who need long-term care.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.
