Addressing Fraud, Waste, and Abuse in Medicaid's HCBS
Medicaid's Home- and Community-Based Services (HCBS) program lets millions of Americans with disabilities receive care at home — not in an institution. But fraud, waste, and abuse threaten the program and the people who depend on it. This report lays out six reforms to protect HCBS while ensuring families are never collateral damage in the crackdown on bad actors.
Read the Report
Why HCBS Integrity Matters
8.4 million Americans with disabilities rely on Home- and Community-Based Services to live independently — at less than one-third the cost of institutional care.
Before 1981, Medicaid would generally only pay for the long-term care of people with disabilities if they received it inside an institution — away from family, work, and the rhythms of ordinary life. That changed after President Reagan intervened in the case of Katie Beckett, a young child kept in a hospital simply because of how the funding worked. Congress created the HCBS waiver pathway, allowing states to deliver care in people's own homes and communities instead.
Today, HCBS is the largest source of care for Americans with disabilities, and it costs taxpayers far less than institutional care. But because waiver programs are flexible by design, they are also vulnerable. Recent investigations in Minnesota, New York, California, and Maine have exposed providers billing for services that were never delivered — harming the very people the program exists to serve.
Six Reforms to Protect HCBS
Create Transparency
Publish public dashboards of waiver waitlists, eligibility criteria, providers, and per-person costs so families and taxpayers can see how dollars are spent.
Increase CMS Oversight of State Waste
Set baseline eligibility standards so services stay focused on those with the most significant needs, and audit any service priced far above the norm.
Establish Consistent Fraud Detection
Use claims data and predictive analytics to flag high-risk providers, and require every flagged provider to be investigated.
Empower Recipients to Direct Their Own Care
Give recipients access to their own visit-verification records and modernize self-directed care options, including alignment with ABLE accounts.
Measure and Report Outcomes
Tie funding to clear, timely metrics that show whether recipients actually receive authorized services and whether their needs are being met.
Ensure Integrity of Third-Party Providers
Require full ownership disclosure from providers and prohibit the use of Medicaid funds for lobbying or forced union dues.
Reform must do two things at once: root out improper payments and fraud, and strengthen the government's ability to recover misspent funds and hold bad actors accountable. But oversight should be aimed where the real risks lie — so that families and people with disabilities are never the ones who pay the price.