Washington, D.C. — When the U.S. Department of Justice announced record-breaking False Claims Act recoveries at the start of 2026, the headlines focused on federal enforcement. What didn’t make the news was what was happening at the state level — and it’s a trend that every nursing home operator in the country should understand.
State attorneys general have been steadily expanding their role in long-term care enforcement, running parallel investigations that often fly below the radar of the national press. The result is a second layer of legal exposure that operators are just beginning to reckon with.
State False Claims Acts Are the Hidden Variable
While the federal False Claims Act gets most of the attention, several states — including Maryland and Michigan — have enacted their own versions, giving their AGs independent authority to pursue Medicaid fraud in nursing homes. And unlike federal prosecutors, who must weigh thousands of competing priorities, state AGs operate closer to the ground. They hear from local advocacy groups, respond to legislative scrutiny, and face voters who care about what happens in nursing homes in their district.
State enforcement actions don’t always get the big press releases that federal DOJ settlements do. But they add up. According to federal data reviewed earlier this year, Medicaid Fraud Control Units — the state-level investigative arms that report to AGs — clawed back more than $2 billion in fraudulent Medicaid spending in fiscal year 2025 alone. Nursing homes and long-term care facilities accounted for a meaningful share of those recoveries.
The federal watchdog’s most recent semiannual report made clear that AI-assisted analytics are now helping investigators spot patterns that once took years to uncover — and those tools are available to state enforcement teams as well.
Why Simultaneous Pursuit Is the New Reality
What’s changed is the coordination. Through the National Association of Medicaid Fraud Control Units, state AGs now work in tandem with the federal government on multi-state cases. When a nursing home chain operates across several states, it can face claims from each one — stacked on top of any federal action.
That means a facility that resolves a federal investigation isn’t necessarily in the clear. State enforcement can follow the same underlying conduct, especially when Medicaid dollars are involved.
For operators, this changes the calculus around compliance. A settlement in one jurisdiction doesn’t close the door in another. Internal documentation, billing practices, staffing records, and quality metrics are now potentially subject to review from multiple directions at once.
What Operators Should Do Now
Experts in long-term care compliance have started advising operators to treat state AG offices the same way they’d treat CMS or OIG — as a real enforcement presence that warrants proactive engagement, not just a reactive response to subpoenas.
That means conducting internal audits that reflect state-specific standards, not just federal thresholds. It means knowing which states have their own False Claims Acts and whether the facilities you operate fall under their scope. And it means taking seriously the quality-of-care issues that often trigger these investigations in the first place.
The era of federal-only enforcement in long-term care is over. State AGs are here — and they’re not going away.
