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Waste and Abuse

Medicaid Home Care Fraud: Risks, Safeguards & New Spending Data

by Dr. Michael Lee – Health Editor March 1, 2026

written by Dr. Michael Lee – Health Editor

The Trump administration is temporarily halting some Medicaid funding to Minnesota, citing concerns over fraud, Vice President JD Vance announced Wednesday. The move, which will initially withhold at least $515 million each quarter, marks a significant escalation in the administration’s scrutiny of state Medicaid programs and a departure from previous federal practices.

Vance, speaking alongside Administrator for the Centers for Medicare & Medicaid Services (CMS) Dr. Mehmet Oz, described the action as part of an “aggressive crackdown on misuse of public funds.” The administration alleges non-compliance with federal requirements designed to prevent fraud, waste and abuse within Minnesota’s Medicaid program.

The concerns center on alleged fraud within Minnesota’s Medicaid home care programs, which provide assistance with daily living activities to older adults and people with disabilities. These programs have grown significantly in recent years, with over 5 million people nationally now utilizing Medicaid home care, according to estimates from the Kaiser Family Foundation (KFF). The administration’s focus on home care reflects a broader concern about potential vulnerabilities in this sector, where services are delivered in private homes to individuals who may be less able to advocate for themselves.

CMS issued a letter to Minnesota Governor Tim Waltz on February 14, 2026, outlining the alleged deficiencies and initiating the funding pause. The agency rejected an initial corrective action plan submitted by the state within a week, and Minnesota is currently appealing that decision even as submitting a revised plan on January 30, 2026.

Minnesota has taken steps to address the alleged fraud, including terminating its Housing Stabilization Services program, auditing autism services providers, adding new licensure requirements for autism centers, and pausing admissions of new providers into 13 high-risk Medicaid services. The state is also enhancing its review of claims using data analytics and artificial intelligence, increasing training for providers and employees, and increasing oversight of Medicaid managed care organizations.

Historically, CMS has addressed Medicaid fraud through claim disallowances and collaborative efforts with states to recoup funds. This new “compliance process,” however, allows the agency to withhold future payments based on a determination of “failure to comply substantially” with federal requirements – a shift that effectively penalizes states in anticipation of future fraudulent activity.

The Trump administration’s actions come as Medicaid faces renewed scrutiny regarding its long-term financial sustainability. House Budget Committee Chair Jodey Arrington (R-Texas) has stated that major changes to federal entitlement programs, including Medicaid, are necessary to address the national debt. The administration has also signaled an interest in revisiting policies related to Medicaid waivers, potentially encouraging states to adopt work requirements and other eligibility restrictions, as was the case during Trump’s first term.

A recent KFF analysis highlighted that Medicaid long-term care has shifted dramatically from institutional settings to home-based care. In 1981, home care accounted for just 1% of all long-term care spending; by 2023, it had risen to 64%. This shift reflects both consumer preferences and the impact of 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 appropriate to their needs.

CMS released a new dataset on February 14, 2026, containing provider-level spending data intended to help identify unusual billing patterns. While the agency highlighted personal care as the top procedure in terms of spending, the data’s limitations – including the omission of institutional records and prescription drug costs – could lead to inaccurate conclusions, according to KFF.

Minnesota is appealing CMS’ decision and awaits a response to its revised corrective action plan.

March 1, 2026 0 comments

Health

CMS Releases Medicaid Spending Data: What Providers Need to Know

by Dr. Michael Lee – Health Editor February 21, 2026

written by Dr. Michael Lee – Health Editor

The Centers for Medicare & Medicaid Services (CMS) released a dataset on February 14, 2026, containing provider-level spending data for Medicaid services, intended to help identify potential fraud, waste, and abuse. The release follows a November 2024 comprehensive plan outlining CMS’s strategy for Medicaid integrity through fiscal year 2028, and builds on efforts dating back to 2010 with the establishment of the Center for Program Integrity (CPI).

The dataset includes information on services rendered between 2018 and 2024, encompassing both fee-for-service claims and those processed through Medicaid managed care organizations. Specifically, the data provides the National Provider Identifier (NPI) for both the billing and servicing provider, the Healthcare Common Procedure Coding System (HCPCS) code for the service, the month and year the service was provided, the number of beneficiaries seen, the number of procedures delivered, and the total amount paid.

However, the dataset excludes significant portions of Medicaid spending, notably institutional care and prescription drug costs. Hospital care alone accounts for 37% of total Medicaid expenditures, making its omission a substantial limitation. The data lack crucial contextual information necessary for a comprehensive assessment of spending patterns. This includes enrollment numbers, benefit designs, state-specific payment rates, and diagnoses associated with the procedures. The absence of place of service information – whether a service was delivered in-person or remotely – and other modifiers further restricts the data’s analytical utility.

CMS acknowledges the potential for misinterpretation when using the data in isolation. A key concern highlighted by the agency is the varying granularity of procedure codes. For example, the code used for “personal care” encompasses a wide range of service durations, from 15 minutes to a full day, while codes for psychotherapy are more precisely defined by visit length (30, 45, or 60 minutes). This inconsistency can skew comparisons between different service categories. Without including institutional spending, personal care appears as the largest spending category in CMS’s example, a result that would change with a more complete dataset.

Another challenge lies in the comparability of providers. The data include individual practitioners as well as large organizations like state and local government agencies. In CMS’s illustrative analysis, ten of the twenty largest “providers” were identified as state or local government entities that both administer and directly deliver Medicaid benefits, particularly for behavioral health and developmental disabilities. Variations in how states structure their Medicaid delivery systems further complicate comparisons.

The quality of the underlying data, sourced from the Transformed Medicaid Statistical Information System (T-MSIS), similarly presents a concern. CMS maintains a “data quality atlas” to identify potential issues, and the agency’s own reporting indicates data quality concerns in several states. Specifically, CMS reported in 2024 that six states had unusable spending data, and an additional sixteen states had data of “high concern.” It remains unclear how these data quality issues were addressed in the publicly released dataset.

The release of this data also occurs against a backdrop of significant changes to Medicaid enrollment and service utilization driven by the COVID-19 pandemic. The continuous enrollment period initiated during the pandemic led to increased enrollment, while heightened awareness of behavioral health and long-term care needs drove increased demand for those services. Changes in state policies regarding coverage, eligibility, and provider payment rates further influenced spending patterns between 2018, and 2024.

CMS has not yet announced a specific timeline for follow-up analysis or enforcement actions based on the released data. The agency continues to collaborate with states on program integrity efforts, as outlined in the November 2024 plan, and offers training through the Medicaid Integrity Institute.

February 21, 2026 0 comments

Health

Medicare’s WISeR Model: Prior Authorization Expansion & Impact on Spending

by Dr. Michael Lee – Health Editor February 11, 2026

written by Dr. Michael Lee – Health Editor

Medicare Launches AI-Driven Prior Authorization Program Amidst Concerns Over Access

WASHINGTON – The Centers for Medicare & Medicaid Innovation (CMMI) launched the Wasteful and Inappropriate Service Reduction (WISeR) Model on January 1, 2026, initiating a new prior authorization process for select medical services in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program, designed to leverage artificial intelligence (AI) and machine learning (ML) to review the appropriateness of care, comes as scrutiny of prior authorization practices intensifies across the healthcare industry.

The WISeR model represents a significant shift for traditional Medicare, which historically has rarely required prior authorization. Currently, such requirements are commonplace in Medicare Advantage plans and private insurance. CMMI has partnered with private health technology companies – Cohere Health, Genzeon Corporation, Humata Health, Innovaccer Inc., Virtix Health, and Zyter Inc. – to administer the reviews, with the companies eligible to receive shared savings based on denied service requests. The selected services include skin substitutes, orthopedic pain management procedures, electrical nerve stimulator implants, incontinence control devices, and treatments for impotence.

The rollout of WISeR follows a voluntary effort announced by the Trump administration in July 2025, where dozens of private insurers pledged to streamline prior authorization processes. Despite this, concerns remain about the potential impact on patient access and provider workloads. An amendment to block funding for the WISeR model was approved by the House Appropriations Committee in September 2025, but was ultimately not included in the Consolidated Appropriations Act of 2026, signed into law in February 2026, allowing the program to proceed.

An analysis of Medicare data from 2019 to 2024 reveals that WISeR-targeted services accounted for 5.3% ($12.3 billion) of all Part B spending in traditional Medicare in 2024, a substantial increase from 1.1% ($2.4 billion) in 2019. However, the vast majority of this spending – 83% ($10.3 billion) in 2024 – is attributed to skin substitutes. Spending on skin substitutes has increased dramatically, rising over 20 times from $509.6 million in 2019 to $10.3 billion in 2024.

This surge in skin substitute spending is largely driven by a steep increase in the average price per service, which rose 820% from $2,300 in 2019 to $21,200 in 2024. In response, CMMI has implemented nationwide changes to payment policy, reclassifying skin substitutes and establishing a fixed reimbursement rate of $127.28 per square centimeter, effective January 1, 2026. CMS estimates this change will reduce Medicare spending on skin substitutes by nearly 90% in 2026, potentially eclipsing any savings generated by the prior authorization requirements within the WISeR model itself.

Approximately 1.1 million traditional Medicare beneficiaries nationwide received at least one WISeR service in 2024, with the majority (86%, or 908,000) receiving orthopedic pain management services. Only 9.3% (98,000) received skin substitutes. Of those utilizing WISeR services, 207,500 (19.7%) were located in the six WISeR model states.

Per capita spending on WISeR services varied significantly among the six states, ranging from $202 in Ohio to $748 in Oklahoma. This variation was largely attributable to differences in per capita spending on skin substitutes, which ranged from $143 in Ohio to $674 in Oklahoma.

The rollout of the WISeR model occurs at a time when a majority of U.S. Adults with health insurance (69%) report that prior authorization is a burden, with 34% identifying it as their single biggest healthcare burden, exceeding even cost concerns. Concerns have been raised about potential delays and denials of medically necessary care, as well as increased administrative burdens for healthcare providers, mirroring issues experienced in Medicare Advantage plans. Several large insurers have faced congressional investigation and lawsuits related to inappropriate coverage denials based on artificial intelligence tools.

While CMS has stated the WISeR model may be expanded to include additional services and states in future years, the initial scope is limited. Two services – deep brain stimulation and percutaneous image-guided lumbar decompression for spinal stenosis – originally scheduled for inclusion in 2026 have been delayed, representing less than 1% of total spending on WISeR services.

February 11, 2026 0 comments