The federal government’s state-level Medicaid fraud enforcement network had a strong year in 2025, recovering nearly $2 billion in stolen and misspent funds — and nursing homes contributed a significant slice of the losses that investigators had to chase down.
A new annual report from the Department of Health and Human Services Office of Inspector General (OIG) tallied the work of all 53 Medicaid Fraud Control Units (MFCUs) across the country for fiscal year 2025. The results show a system producing results: criminal and civil recoveries combined totaled $1.99 billion, with every dollar spent on MFCUs returning $4.64 to federal and state coffers.
Nursing facilities accounted for $61 million in recovered funds — a figure that underscores the ongoing exposure nursing home operators face from state fraud investigators, even as federal enforcement attention has shifted in recent years.
Convictions, Exclusions, and What It Means for Operators
MFCUs secured 1,185 convictions in FY2025. Of those, 856 were for fraud and 329 were for patient abuse or neglect — a reminder that MFCU investigations don’t stop at billing irregularities. They follow the care.
The convictions carried consequences beyond the courtroom. OIG used those MFCU results to exclude 900 individuals and entities from federal health care programs entirely. For nursing home operators, an exclusion means they can’t bill Medicare or Medicaid — effectively ending the business.
Among fraud convictions, personal care services attendants had the highest numbers. For abuse and neglect convictions, nurses’ aides and nurses ranked at the top. That breakdown matters for nursing home leadership: the frontline workforce is where both the risk and the legal exposure tend to concentrate.
Managed Care Fraud Referrals on the Rise
One data point worth watching: MFCUs received 5,991 fraud referrals from managed care entities in FY2025. That’s a pipeline that keeps growing as Medicare Advantage and Medicaid managed care enrollment expands. More managed care enrollment means more plan-level surveillance, more flagged claims, and more MFCU investigations downstream.
For skilled nursing facilities already navigating aggressive OIG scrutiny over antipsychotic drug misuse, the managed care referral surge is another indicator that the compliance environment isn’t getting easier.
The Broader Picture
The FY2025 MFCU report covers 53 units — one for each state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. While nursing facilities weren’t the largest single category in terms of fraud recoveries, they remain a consistent target. Each year, state fraud units bring cases involving understaffing, billing for care never delivered, and falsified documentation.
The report also highlighted 674 civil settlements and judgments — cases that never went to trial but still cost providers real money. Pharmaceutical manufacturers led that category, but nursing facilities appeared throughout the underlying case data.
Operators reviewing their compliance programs would do well to treat this annual report as a signal, not a statistic. The MFCUs are actively working, they’re receiving more referrals than ever from managed care plans, and the financial returns they produce guarantee continued federal investment in their operations.
