Federal rules prohibit anyone from giving any Medicare or Medicaid beneficiary any remuneration — defined as anything more than $10 in value at a time or $50 in a year — that “is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services.”

The reason, according to the inspector general of the U.S. Department of Health and Human Services, is that “offering valuable gifts to beneficiaries to influence their choice of a Medicare or Medicaid provider raises quality and cost concerns.”

Even if the thing of value is given by someone other than the provider, the gift, or donation, cannot be dependent on using a particular provider. That especially includes gifts to current clients, which the Office of Inspector General considers “likely to influence those customers’ future purchases.”

Even so, exploiting the destitute and their reliance on Medicaid isn’t without precedent — or consequence.

A Massachusetts couple in 2023 pleaded guilty to larceny and illegal kickback charges tied to a scheme they operated between 2015 and 2017. The couple, John and Joanne Wachira, had recruited at least 10 homeless people to live in their house in Chelmsford, a town about 30 miles northwest of Boston, but required them to be Medicaid recipients and sign up to use home health care services provided by a particular home health care agency.

Officials alleged the couple required the homeless, under the threat of eviction, to sign timesheets that indicated they had received services, such as medication reminders, bathing and assistance getting dressed when they had not. Medicaid was billed and paid for the services.

The Wachiras were sentenced to 10 months of home confinement and three years of probation, which required a $100,000 payment to the state’s Medicaid provider, as well as refraining from participating in any state or federal healthcare program.

In 2015, nine New York doctors were among 23 people indicted in Brooklyn for participating in a scheme in which thousands of homeless people were recruited into a program of unnecessary tests and fake diagnoses with promises of free footwear, such as sneakers and boots.

The scheme netted the group nearly $7 million and resulted in charges of health fraud, enterprise corruption and money laundering. The district attorney who brought the case called it a “Medicaid mill” and that “at the heart of this health care fraud scheme was the exploitation of poor people.”

At its crux, the plan would only work if the homeless recruits had valid Medicaid coverage. The doctors involved would frequently refer the homeless to agencies that would sign them up for recurring visits they could bill.

The doctors paid the recruiter a fee for every person who participated, or would simply split the Medicaid fee they collected.

A dozen people and three businesses pleaded guilty to healthcare fraud charges, including its ringleader Bernard Rorie, with sentences ranging from a year in prison to probation terms up to three years and federal forfeitures of more than $529,000, records show.

Still other prosecutions centered on the exploitation of the homeless tied to other subsidized programs.

In Minnesota last year, dozens were indicted for their roles in defrauding millions of dollars in Medicaid benefits that were tied to a housing stability program designed to help people with disabilities find and maintain stable housing.

By using multiple LLCs, the defendants submitted hundreds of billings for services that were never provided through the homeless persons’ Medicaid benefits.

In February 2026, a pair of Pennsylvania men pleaded guilty to federal charges of defrauding the Medicaid program in Minnesota in a scheme that relied on artificial intelligence to generate fake records for insurance companies.

“They traveled across the country for one purpose: To prey upon and steal millions in taxpayer dollars meant for people struggling with homelessness, addiction and disabilities,” Assistant Attorney General A. Tysen Duva of the U.S. Department of Justice’s Criminal Division said in a statement at the time.

And in September 2025, a Worcester, Mass., a man pleaded guilty to orchestrating a Medicaid fraud scheme that collected more than $500,000 from billing for home health services to the homeless that were never provided. The man, Felix Mercedes, invited at least 17 people without a place to live to stay at his home, then signed them up for home health services without their knowledge and billed the state’s Medicaid provider.

Mercedes was sentenced to prison for up to three years and five years of probation and ordered to repay the state program $500,000 in restitution.

Colorado has also had its share of Medicaid problems with recent revelations that its program, Health First Colorado, had wrongly overpaid transportation drivers millions of dollars for rides to medical appointments, many of the passengers homeless.

Along with a number of other problems with the state’s program — including a legislative mandate to delve into them more deeply — Colorado Department of Health Care Policy and Financing Executive Director Kim Bimestefer resigned.

The agency’s budget last year was $18 billion, with $4.2 billion of that coming from the state’s general fund.

The Colorado Department of Health Care Policy and Financing said it encourages anyone who suspects fraud, waste or abuse occurring in the Medicaid program to report it using the resources located at:
https://hcpf.colorado.gov/how-report-suspected-fraud