HHS OIG Issue Brief  December 2017  OEI-12-16-00500 
Medicaid Fraud Control Units:  Investigation and 
Prosecution of Fraud and Beneficiary Abuse in 
Medicaid Personal Care Services 
 
This issue brief highlights the involvement of State Medicaid 
Key Takeaways: 
Fraud Control Units (MFCUs or Units) in pursuing fraud and 
  During fiscal years (FYs)  beneficiary abuse in Medicaid personal care services (PCS).  
20122015, cases 
regarding fraud in  Personal Care Services  
Medicaid personal care 
PCS consist of services supporting activities of daily living, 
services (PCS) were 
a substantial and growing  such as bathing, dressing, light housework, meal preparation, 
percentage of Medicaid  and transportation.1  PCS providers provide this assistance to 
Fraud Control Unit (MFCU)  the elderly, people with disabilities, and individuals with 
cases and outcomes. 
chronic or temporary health conditions so that they can remain 
 
in their homes and communities.2   
 MFCUs have made 
recommendations to   
Medicaid PCS are typically provided by PCS attendants in 
address vulnerabilities in 
a home or community-based setting (often in a beneficiarys 
the PCS program. 
private residence), but may also be provided in an assisted 
   
 MFCUs lack the Federal  living facility or other congregate (group) setting.  Although 
funding authority to pursue  there are no Federal qualification requirements, such as 
abuse or neglect of 
minimum training or education requirements, States must 
beneficiaries that occurs in 
develop their own qualifications or requirements for PCS 
beneficiaries homesthe 
providers.3  With this being the case, PCS provider 
location where PCS are 
often provided.   qualification requirements may vary significantly from State to 
State. 
Generally, PCS are delivered through one of two models:  agency-directed PCS or self-directed 
PCS.  With agency-directed PCS, agencies hire and train attendants to provide PCS to eligible 
beneficiaries.4  With self-directed PCS, beneficiaries hire and supervise their own PCS providers.  
PCS are offered as either an optional benefit through a Medicaid State plan or through various 
demonstration projects and waiver programs in all States, including the District of Columbia.   PCS expenditures generally increased between FYs 2012 and 2015.  In FY 2015 (the most recent 
year for which data were available), Federal and State Medicaid spending on PCS totaled 
approximately $13.3 billion.  This represented an increase of 21 percent compared to FY 2012, 
when Medicaid expenditures for PCS totaled about $10.9 billion.5 
Medicaid Fraud Control Units  
MFCUs are entities in State government that investigate and prosecute (1) Medicaid provider 
fraud that occurs in any care setting and (2) patient abuse or neglect that occurs either in 
Medicaid-funded health care facilities or in board and care facilities.6  Currently, 49 States and 
the District of Columbia (States) operate MFCUs.  The Office of Inspector General (OIG) 
collaborates with the MFCUs on fraud cases, awards Federal matching funds to each MFCU 
through a MFCU grant, and provides program oversight. 
MFCUs investigate and prosecute the broad variety of health care providers and other providers 
who serve Medicaid beneficiaries, including PCS providers and attendants.   
RESULTS  
During the review period, PCS fraud cases were a substantial 
and growing percentage of MFCU cases and outcomes   
In FY 2015, fraud cases involving PCS providers or attendants constituted 12 percent of total 
investigations.  With regard to criminal outcomes, fraud cases involving PCS providers or 
attendants constituted an even larger percentage from FY 2012 through FY 2015; 38 percent of 
indictments and 34 percent of convictions involved PCS providers or attendants.  Because PCS 
attendants are not required to be directly enrolled as Medicaid providers in most States, there is 
no precise information on the number of PCS attendants who participate in the Medicaid 
program.  However, PCS providers are 1 of over 80 provider types investigated by the MFCUs 
and represented $13 billion out of $524 billion total Medicaid expenditures during FY 2015.    
 
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  2   Moreover, MFCU casework involving PCS saw large increases during our 4-year review period.  
During that time, the number of MFCUs fraud indictments of PCS providers or attendants 
increased 56 percent and convictions increased 33 percent.7  
MFCUs have made recommendations to assist States in 
strengthening PCS oversight  
Many MFCUs reported to OIG that they made recommendations to State Medicaid agencies to 
strengthen PCS program safeguards.8  However, Units generally reported that State Medicaid 
agencies had implemented their recommendations only minimally.   
MFCUs recommended that State Medicaid agencies enroll or register 
PCS attendants or assign each attendant a unique identifier  
Some Units reported to OIG that they recommended to their State Medicaid agencies that the 
agencies enroll PCS attendants as Medicaid providers or include PCS attendants in a provider 
registry so as to assign a unique provider identification number to PCS attendants to include on 
claims for reimbursement.   
Some Units reported that the lack of enrollment or registration of PCS attendants into the 
Medicaid program is a program integrity challenge.  Specifically, Units reported that in some 
States, PCS attendants are not required to enroll in the Medicaid program or register as Medicaid 
providers.  As a result, PCS attendants are not assigned individual provider identification 
numbers.  MFCUs reported that the inability to identify individual PCS attendants inhibits the 
ability to identify fraudulent providers.  MFCUs reported that without provider enrollment or 
registries that assign unique identifiers to PCS attendants, it is difficult to monitor the billing of 
individual attendants to determine which ones may have engaged in fraud or beneficiary abuse or 
neglect.  
One Unit identified an additional benefit from enrolling PCS attendants in Medicaid:  individuals 
who enroll may be better informed about Medicaid procedures and requirements, including the 
consequences for committing fraud.    
MFCUs recommended that State Medicaid agencies require background checks 
for PCS attendants   
Units recommended that their State Medicaid agencies require PCS attendants to receive 
background checks or other vetting before being allowed to provide services to beneficiaries.  
Units reported that having only minimal requirements for background checks or vetting for PCS 
attendants potentially leaves vulnerable beneficiaries at riskindividuals with criminal histories 
may enter beneficiaries private residences to provide PCS and may bill the Medicaid program 
for these services.  For example, if safeguards such as thorough and complete background checks 
had been in place, they might have kept out of the program a PCS attendant in Arizona who 
ultimately pleaded guilty to theft and financial exploitation of a vulnerable adult.  In 2015, the 
PCS attendant stole checkbooks, cash, credit cards, and personal items belonging to the 
beneficiaries for whom she provided care.  The PCS agency that had employed the attendant 
reported that before hiring her, they checked for felony arrests and found none.  However, she 
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  3   had been arrested multiple times for misdemeanors.  The company later learned that she had lost 
her license as a certified nursing assistant in 2009 for previous incidents dating back to 1999.     
MFCUs recommended that State Medicaid agencies institute additional 
documentation requirements for PCS 
MFCUs recommended that State Medicaid agencies require 
One Unit explained that 
PCS attendants to (1) provide detailed or standardized 
the State Medicaid 
timesheets or other forms of verification of how many hours 
agency has minimal 
in a day were worked, as well as the start and stop times for 
control over services, 
the services; or (2) require PCS attendants to submit 
does not verify that 
documentation of the PCS provided.  Units reported that 
services are provided, or 
gauge the quality of the  minimal PCS documentation is a program integrity challenge 
care.    because PCS claims data may not contain the identity of the 
PCS attendant(s), the number of hours of PCS that were 
Source:  OIG analysis of MFCU 
responses to OIG electronic  provided per day, or the time of day during which the 
questionnaire, 2016. 
services were provided.  As with attendants not being 
enrolled in Medicaid or registered as Medicaid providers, the lack of documentation inhibits the 
ability to identify fraudulent individuals and services. 9   
MFCUs recommended that State Medicaid agencies improve ongoing oversight of 
PCS providers and the services they deliver to vulnerable populations  
Units recommended that State Medicaid agencies implement a variety of controls specific to 
ongoing oversight of PCS providers and the services that they deliver.  Units recommended that 
the State Medicaid agencies (1) require beneficiary case managers to conduct more frequent 
in-home supervisory visits; (2) require training for PCS attendants; and (3) cross-reference 
attendant and beneficiary location to ensure that PCS providers do not bill for services while the 
beneficiary or the attendant is elsewhere.    
Units reported that the minimal supervision of PCS attendants leaves beneficiaries vulnerable to 
abuse and neglect.  PCS beneficiaries may be especially ill equipped to make a complaint that 
leads to an investigation or to assist in evidence collection for an investigation.  Beneficiaries 
may suffer from cognitive impairment, be hesitant to provide unfavorable information to 
authorities, or be unable to confirm that quality services were delivered.  Therefore, it is even 
more important that preventive measuressuch as improved oversight of PCS providers
be taken to protect this vulnerable population.  
MFCUs limited funding authority to investigate complaints of 
beneficiary abuse or neglect constrains their ability to 
protect beneficiaries receiving PCS services 
Under current statute, MFCUs may generally not receive Federal funding to investigate and 
prosecute beneficiary abuse or neglect that occurs in a home- or community-based setting, such 
as abuse or neglect by a PCS provider in a beneficiarys home.10  However, MFCUs may 
investigate such situations of beneficiary abuse or neglect when they arise as part of a fraud 
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  4   investigation.  Units reported that patient abuse or neglect was involved in less than 6 percent of 
their PCS fraud investigations, indictments, convictions, and recoveries.11 Approximately 
40 percent of Units also reported that this limited Federal funding authority constrains their 
ability to protect beneficiaries. 
 
 
Given that MFCUs are ineligible to receive Federal funding to pursue abuse or neglect 
complaints in nonfacility settings, MFCUs generally refer these complaints to other investigative 
agencies.  In total, MFCUs referred 871 complaints of PCS beneficiary abuse or neglect to other 
investigative agencies during the review period because the MFCUs were ineligible to receive 
Federal funding to investigate and prosecute these cases themselves.  See Exhibit 2 for a list of 
the investigative agencies to which MFCUs referred complaints of PCS beneficiary abuse or 
neglect during the review period.  Nearly all MFCUs42 of 50reported that they are not 
informed of the outcomes of these cases after they refer the complaints. 
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  5   Fifteen Units reported to us their belief that their 
ineligibility to receive Federal funding to pursue 
allegations of abuse or neglect of PCS 
beneficiaries in nonfacility settings may affect 
their ability to protect beneficiaries.  As one of 
these Units stated, if MFCUs Federal funding 
authority for cases of abuse and neglect were 
expanded to nonfacility settings, these cases 
would receive the same level of investigative 
expertise and aggressive prosecution as the other 
cases handled by the MFCUs.  This Unit also 
expressed its view that there is no State agency 
better equipped than the MFCU to criminally 
pursue these types of cases.  In May 2017less 
than a year after Units reported these concerns to 
OIG38 State Attorneys General requested a 
change in Federal policy to allow MFCUs to use 
Federal funds to (1) investigate and prosecute 
abuse and neglect of Medicaid beneficiaries in 
noninstitutional settings and (2) screen complaints or reports alleging potential patient abuse or 
neglect in any setting.12 
   
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  6   CONCLUSION 
The volume and growth of MFCU investigations and prosecutions of PCS fraud suggest that 
PCS remain vulnerable to fraud and support the need for greater oversight of Medicaid PCS.  To 
improve PCS program integrity and protect beneficiaries, OIG encourages the Centers for 
Medicare & Medicaid Services (CMS) to work with State Medicaid agencies to implement the 
recommendations made by MFCUs outlined in this issue brief.  CMS has made efforts to 
improve PCS program integrity by disseminating information about PCS program vulnerabilities 
to States and encouraging States to address these weaknesses.  However, MFCUs report that 
States have generally not implemented the specific recommendations that MFCUs made to them 
for strengthening program integrity.   
The recommendations that MFCUs made to States align with recommendations that OIG has 
made previously to CMS.  OIGs June 2016 portfolio titled Personal Care Services: Trends, 
Vulnerabilities, and Recommendations for Improvement (OIG-12-12-01) summarizes findings 
from a body of work that OIG has conducted regarding PCS and offers recommendations for 
improving program oversight.13  These recommendations were further emphasized in an 
October 2016 OIG investigative advisory that described a few of the many examples of PCS 
fraud and beneficiary abuse that OIG has identified in its investigations.14  
In the portfolio and investigative advisory, OIG recommendedconsistent with the 
recommendations by MFCUsthat CMS make the following improvements: 
  require States to enroll or register PCS attendants as Medicaid providers or assign each 
attendant a unique identifier; 
  institute qualification requirements and screening requirements for PCS providers; 
  require that PCS claims include the specific date(s) when services were performed and 
the identity of the rendering PCS providers;  
  issue operational guidance for beneficiary assessments, plans of care, and supervision of 
attendants; and 
  consider whether additional controls are needed to ensure that PCS are allowed under 
program rules and are provided. 
OIG continues to support these recommendations. 
In addition, to protect beneficiaries from abuse and neglect, it is key that Federal funding 
authority be expanded so that MFCUs can investigate and prosecute cases of patient abuse and 
neglect in nonfacility settings.  This is particularly important given that beneficiaries in 
nonfacility settings are a vulnerable population who may be unable to supervise and monitor 
their own PCS providers.   
 
   
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  7   METHODOLOGY
 
The analysis in this data brief is based on data from two sources:  (1) data collected from  
50 Medicaid Fraud Control Units (MFCUs or Units), and (2) OIG investigative data.   
MFCU data:  We administered electronic questionnaires to all 50 Units.  Units responded to the 
questionnaire in September 2016.  We received questionnaire responses from all 50 Units.  
However, because some MFCUs do not track or maintain some of the data that was requested in 
the electronic questionnaire, some Units did not respond to all survey questions.  Our item 
nonresponse ranged from 2 to 5 missing responses for some questions.  Units that were unable to 
provide these specific data were excluded from the corresponding calculations. 
We analyzed all of the questionnaire data for all Units and requested additional data and 
clarification as needed.  We analyzed key numeric indicators, such as the number of PCS 
referrals, investigations, indictments, convictions, and recoveries for FY 2012 through FY 2015.  
We also conducted a qualitative review of narrative responses on subjects such as 
recommendations made to the State Medicaid agency.   
Additional data and analysis that are not presented in this data brief are available online at 
https://oig.hhs.gov/oei/reports/oei-12-16-00500.asp.  Additional data and analysis include the 
following data for FYs 2012 through 2015:  (1) MFCUs investigations, indictments, and 
convictions regarding PCS fraud; (2) MFCUs investigations, indictments, and convictions 
regarding both PCS fraud and beneficiary abuse or neglect; (3) PCS referrals that MFCUs 
received; (4) the proportion of PCS referrals that MFCUs received for which they were ineligible 
to receive Federal funding to investigate; and (5) the number of PCS patient abuse or neglect 
referrals that MFCUs made to various State agencies.     
In addition to the survey data that we collected for this data brief, OIG routinely collects 
statistical information from each of the MFCUs as part of an Annual Statistical Report.  The 
information includes statistics about MFCU investigations, indictments, convictions, civil 
settlements, and recoveries.  For more information, please visit 
https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/. 
OIG investigative data:  We collected data from the investigative component of OIG to identify 
the extent of joint OIG-MFCU casework on PCS for calendar years 2012 through 2015.  Data 
elements included PCS investigations, convictions, and recoveries that resulted from cases 
worked jointly by OIG and MFCUs.   
Limitations 
The questionnaire data collected from Units were self-reported.  We did not independently verify 
Units responses; however, we reviewed responses for consistency and possible data-entry 
errors.  MFCUs do not track or maintain some of the data that the electronic questionnaire 
requested.  Units that were unable to provide specific data were excluded from the corresponding 
calculations.    
   
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  8   Standards 
This study was conducted in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
   
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  9   ACKNOWLEDGMENTS
 
Jordan Clementi and Lyndsay Patty served as team leaders for this study.  Office of Evaluation 
and Inspections staff who provided support include Althea Hosein and Christine Moritz.  This 
report was prepared under the direction of Richard Stern, Director of the Medicaid Fraud Policy 
and Oversight Division.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain copies, contact the Office of 
Public Affairs at Public.Affairs@oig.hhs.gov.  
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  10   ENDNOTES
 
 
1 OIG, Personal Care Services:  Trends, Vulnerabilities, and Recommendations for Improvement, OIG-12-12-01, 
November 2012.  Accessed at https://oig.hhs.gov/reports-and-publications/portfolio/portfolio-12-12-01.pdf on 
June 7, 2016. 
2 Ibid. 
3 For the PCS-related requirements in State plans, see Social Security Act  1905(a)(24); 42 CFR  440.167; 
regarding waivers, see 42 CFR  441.302(a).   
4 The Centers for Medicare & Medicaid Services (CMS), Informational Bulletin:  Strengthening Program Integrity 
in Medicaid Personal Care Services, December 2016.  Accessed at https://www.medicaid.gov/federal-policy-
guidance/downloads/cib121316.pdf on September 14, 2017.  In many States, PCS providers are not required to 
enroll as Medicaid providers.  Therefore, data are currently not available regarding the number of providers in the 
various PCS-provider categories. 
5 Truven Health Analytics, Medicaid Expenditures for Long-Term Services and Supports (LTSS) in FY 2015, 
April 14, 2017.  Accessed at https://www.medicaid.gov/medicaid/ltss/downloads/reports-and-
evaluations/ltssexpendituresffy2015final.pdf  on August 28, 2017. 
6 Section 1903(q)(4)(B) of the Social Security Act defines board and care facility as a residential setting that 
receives payment (regardless of whether such payment is made under the State Medicaid plan) from or on behalf of 
two or more unrelated adults who reside in such facility, and for whom one or both of the following is provided:  
(1) nursing care services provided by, or under the supervision of, a registered nurse, licensed practical nurse, or 
licensed nursing assistant; and (2) a substantial amount of PCS that assist residents with the activities of daily living, 
including personal hygiene, dressing, bathing, eating, toileting, ambulation, transfer, positioning, self-medication, 
body care, travel to medical services, essential shopping, meal preparation, laundry, and housework.   
7 We did not determine the number of newly opened investigations during our review period.  Because of potential 
overlap in the number of yearly investigations, we cannot determine the percentage of increase during our review 
period.  
8 77 Fed. Reg. 32645 (June 1, 2012).  MFCU performance standards state that Units should make statutory, 
regulatory, or administrative recommendations regarding program integrity issues to the State Medicaid agency 
when warranted and appropriate.  These recommendations may address an array of program integrity issues.  
9 MFCU recommendations for additional documentation may be addressed by section 12006 of the 21st Century 
Cures Act, P.L. No. 114-255 (Dec. 13, 2016).  The Act requires electronic visit verification to be used for any 
Medicaid-funded PCS provided on or after January 1, 2019, for States to maintain full Federal matching funds.  
With respect to PCS, an electronic visit verification system is a system by which PCS provider visits are 
electronically verified with respect to (1) the type of service performed; (2) the individual receiving the service; 
(3) the date of the service; (4) the location of service delivery; (5) the individual providing the service; and (6) the 
time the service begins and ends.   
10 Beneficiary abuse or neglect also includes misappropriation of beneficiary funds.  42 CFR  1007.11(b)(1).  
11 The percentage of MFCU fraud work that also included patient abuse and neglect was 5 percent for investigations 
in FY 2015, and during the review period it was 6 percent for indictments, 5 percent for convictions, and 5 percent 
for recoveries.    
12 National Association of Attorneys General, Letter to HHS Secretary, May 10, 2017.   
13 OIG, Personal Care Services:  Trends, Vulnerabilities, and Recommendations for Improvement, OIG-12-12-01, 
November 2012.  Accessed at https://oig.hhs.gov/newsroom/spotlight/2012/portfolio01.asp on June 7, 2016. 
14 OIG, Investigative Advisory on Medicaid Fraud and Patient Harm Involving Personal Care Services, 
October 2016.  Accessed at https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf on November 24, 
2016. 
Medicaid Fraud Control Units:  Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid PCS 
(OEI-12-16-00500)  11