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California’s Medi-Cal has a bad case of fraud — and there’s only one cure

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Finding waste, fraud and corruption in Medicaid is a lot like diagnosing illness in a human body. You do an initial check-up and if something seems off, you order more tests.  

That’s exactly what the US Centers for Medicare & Medicaid Services (CMS) did with California’s Medicaid program, known as Medi-Cal.

During a review of state-by-state Medicaid spending, CMS saw major warning signs that could not be ignored. As a result, we deferred payment of $867 million to California for the second quarter of 2026 to take a closer look.  

Our biggest area of concern was California’s In-Home Supportive Services (IHSS) program, which reimburses individual caregivers — who are often unlicensed and unmonitored — for helping disabled Medicaid beneficiaries with everyday tasks like changing clothes or picking up groceries. Over the past two years, the cost of this program grew by almost 24%, nearly twice as fast as personal care expenditures in the rest of the country, making California a significant outlier. 

It’s true that many states are ramping up initiatives to help keep beneficiaries in their homes, but such rapid spending growth on one set of services in one state is often a sign of a deeper problem.

That’s why we directed our program integrity experts to go through California’s expenditure reports line by line, the same way a good doctor would look at medical charts.

Then, we took action. 

In response to the state’s spike in IHSS spending, we deferred over $390 million, to account for the amount of California’s expenditure growth that........

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