Lambert here: Interestingly, this is the business Brad Smith’s CareBridge is in.
In February, the U.S. DOGE Service released a gigantic dataset showing Medicaid provider spending from every month from 2018 to 2024. Social media buzzed with eye-popping numbers and claims of widespread fraud as the government insurer’s home care spending more than doubled from $937 million per month to $2.15 billion per month over that period.
That alarmed Victor Hunt, CEO of Zingage, a business that wants to keep “grandma out of the hospital.” Hunt’s business uses artificial intelligence to help home-care providers manage things like scheduling and care coordination. He dug into the newly released Medicaid data — and found a much murkier picture.
“Things that look like fraud are happening, but it’s not this mass orchestration of fraud at a company level, but rather individual actors within the system who are sort of ripping off the agency,” Hunt told STAT. For Hunt, and his business, claims of widespread fraud in home-based care that older Americans and those with disabilities depend on is an existential threat.
The Trump administration has made it clear through executive orders, public statements, and social media posts in recent months that it intends to root out health care fraud, with Medicaid being the main target. It threatened to withhold more than $2 billion earmarked for Minnesota’s Medicaid services unless the state addressed the “high risk” areas liable to fraud, including a two-year licensing freeze on new providers of home and community-based services, or HCBS.
The administration’s portrayal of this home care as rife with fraud comes at a time when those services are becoming less affordable but increasingly critical for the United States’ health care system. More than 8.4 million people received HCBS in 2023, and as many as 69% of Americans are expected to use long-term care services at some point in their lives as people are living longer. Meanwhile, the administration’s 2025 tax bill will cut Medicaid funding by $1 trillion over 10 years. These facts combined with the fraud crackdown have alarmed disability advocates, who worry that it will make it harder for disabled people to access care.
The big-ticket numbers and stories cited by the Trump administration and investigated by journalists are heartbreaking and often legitimate… [But] what is the percentage of fraud or improper payments compared to the overall Medicaid funds sent to a state? A CMS spokesperson said that the agency does not comment on specific data requests, targeted reviews, or internal analytics used to identify risk.
When Hunt analyzed the CMS dataset, which was taken offline at the time of publication, he found that 93% of providers have stable billing patterns, a sign he suggests is potentially linked to a legitimate business. But even the “unpredictable patterns” don’t suggest wholesale fraud.
The “explosion” in home care services, according to Hunt, can be explained by wage increases and deliberate policy changes that prioritized providing care at home rather than caring for people in institutions like nursing homes or assisted living facilities. Disability advocates started this push away from segregating people in institutions and toward more community-based care in earnest in the 1970s and ’80s, but the Covid-19 pandemic has further accelerated this trend.
Medicaid’s spending data bears out this trend. In 1981, just 1% of what Medicaid spent on long-term care went toward home care. By 2023, the share of home care accounted for 64% of what Medicaid spent on long-term care. The pandemic hastened this shift as institutions became hot spots for viral spread. The shift to home-based care typically reduces health care costs, too, according to health policy nonprofit KFF.
Home care fraud convictions have declined in recent years in part due to the introduction of electronic visit verification for all Medicaid home care services, which finished rolling out in all states in 2023. States also made it easier during the pandemic to register to be a caregiver, said Burns, increasing the number of family members and people providing services who may not be submitting bills properly, in addition to potentially adding more avenues with less oversight.
Though Centers for Medicare and Medicaid Services officials kicked off the year by aggressively denouncing fraud and announcing sweeping investigations, their strategy appears to be in flux. They have started a new federal task force and sent letters to states announcing impending investigations of Medicaid fraud. But last week, they informed Minnesota health officials that they had approved their compliance action plan to get on a path toward getting their $2 billion in federal funding dollars.
[Disability advocate Joanna Glum:] “Diminishing home and community-based services creates a cascading effect whereby unpaid family caregivers … will be forced to make a Sophie’s choice between self-impoverishment, career loss, and adverse health impacts or else abandon their loved ones or neighbors to a reality of institutionalization.”
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