OIG: Home Care Medicaid Fraud ‘Persistent,’ Harms Patients

Fraud and abuse in home health has led to an array of crackdowns from regulators and other authorities, but fraud issues are similarly rampant in Medicaid personal care services, according to a recent report from the Office of Inspector General (OIG). In many cases, patients have been harmed as a result.

OIG has found “significant and persistent compliance, payment and fraud vulnerabilities” within Medicaid personal care services (PCS), according to a recently released report that builds off a previous report form 2012. Medicaid’s PCS benefit typically covers recipients with disabilities and chronic conditions, usually related to activities of daily living (ADLs).

Investigators have found high rates of fraud within Medicare-reimbursed home health care as well, with OIG flagging more than 500 agencies earlier this year as having suspicious practices. In 2015, fraudulent Medicare billing from hospices reached $268 million.

OIG created the Portfolio report in 2012, and has since opened more than 200 investigations involving fraud and patient harm and neglect across the country from agencies that provide personal care services and CPS attendants.

Common Fraud Themes

From 2012 to 2016, cases of fraud took many forms, but a few common themes appeared in the report.

In particular, investigations often centered around personal care services that were either not necessary or not actually provided. Investigations found schemes where caregiving agencies would involve numerous personal care attendants and Medicaid beneficiaries, while other investigations were specific to individual attendants and the beneficiaries they claimed to serve.

Overall, agencies involved in fraud schemes often engaged in “aggressive tactics” to recruit Medicaid beneficiaries to participate, but, in other cases, beneficiaries voluntarily agreed to participate.

For example, a case in Alaska involved more than 40 individuals associated with the personal care services agency, and the owner of the company admitted it had engaged in fraud in several ways, including falsifying time sheets for services not provided to Medicaid recipients. The company also billed Alaska Medicaid for services provided by employees who were not allowed to bill Alaska Medicaid.

Another case in Missouri involved a PCS attendant who submitted times sheets for more than 130 days in 2013 that indicated she was providing care to four beneficiaries, when in fact she was simultaneously working a full-time job.

Patient Harm

In addition to financial losses from fraudulent billings, the report uncovered instances in which patients were harmed, as well. Cases where abuse or neglect of the beneficiaries was present resulted in deaths, hospitalizations and other degrees of patient harm, according to the report. In other cases, attendants were on the job while they were impaired, sometimes under the influence of the drugs that had been prescribed to the beneficiaries in their care.

Part of the problem is that vulnerable patients may not be able to report abuse or neglect. And most attendants are not supervised in the home, leaving the monitoring of care and reporting up to the beneficiary. Many times, these cases involved relatives of the beneficiary who were being paid as their PCS attendant.


In an effort to combat fraud and abuse and neglect, OIG has been discussing potential administrative actions with the Centers for Medicare & Medicaid Services (CMS), including issuing an informational bulletin to states that outlines how they can improve internal controls for personal care services.

In addition, OIG recommends that CMS establish minimum federal qualifications and screening standards, including background checks, for workers; require states to enroll or register all attendants and assign them unique numbers; require all PCS claims identify dates of service and the attendant who provided the care; and consider whether additional controls are needed.

“OIG believes that CMS needs to take regulatory action to establish safeguards that will prevent fraudulent or abusive providers from enrolling or remaining as PCS attendants and better protect the PCS program from fraud and patient harm and neglect,” the report concludes. The report made no mention if CMS agrees or disagrees with these recommendations.

Written by Amy Baxter