A Deep Dive into Nevada’s Unlicensed Homes Dilemma
In neighborhoods across Nevada, hundreds of unlicensed care homes quietly operate in residential backyards, motels, and apartments completely outside the scope of state regulation. These include group homes, residential treatment homes, hospice and home healthcare agencies.
Since at least 2018, many Nevada group homes have been deemed unsafe, overcrowded, and unequipped to handle the vulnerable populations they house. Despite these pressing dangers, state agencies within the Nevada Department of Health and Human Services (DHS) face limited resources, high turnover, and a system with inherent conflicts of interest and high levels of fraud. The problem has become so bad among hospice group homes, in particular, that Nevada was the latest state to put a moratorium on new enrollment requests just last month (June 2026).
A Quick History of Unlicensed and Unregulated Homes
Nevada’s problem with unlicensed and unregulated home health services first went “viral” when a state legislative audit revealed serious problems at many unlicensed homes across Nevada. At the time, The Nevada Independent reported that Nevada auditors found “filthy conditions in 34 homes, mold and mildew in 22, rodent and insect infestations in 13, evidence of human waste in 11, strong and unpleasant odors inside the home in eight, and untreated blood stains in two.” Many of the homes had no disaster plan in place, no emergency kits, and expired food. Some of the homes had residents living in mold, broken glass, sleeping on dirty mattresses with insects and feces on the floor. Despite numerous reports, whistleblower complaints, and mounting public scrutiny, the Nevada Department of Health and Human Services (DHHS) failed to regulate the licensed homes or even track the growing number of unlicensed group homes across Nevada counties.
Needless to say, lawmakers were angry and frustrated. After the damning report became public, state officials closed 18 state-run community-based living arrangement homes in 2018. Now, more than seven years later, the whispers and whistleblowers are still being ignored while many of our state’s most vulnerable populations are still living in squalor. News 8 reported on the ongoing problem again in 2021 when a woman died in a fire at an unlicensed group home. Yet the problems persist today in 2026. And in truth, the problems existed long before 2018, dating back to at least 2013. See this Nevada AG report that begins with “There is a growing problem of unlicensed health care in Nevada.”
The Current Landscape: Fraud, A Hospice Moratorium, and Hospital Discharges
The Nevada Medicaid Fraud Unit stated in a 2025 interview that our “Biggest problem is still unlicensed facilities: group homes, sober living, and residential homes that are preying upon our most vulnerable citizens.” These homes often house individuals with serious mental illness, disabilities, or substance use disorders without trained staff or appropriate safety protocols. While the state attempts to keep up with licensed providers, hundreds of unlicensed homes across Nevada escape scrutiny entirely. Because unlicensed facilities do not file paperwork or request Medicaid reimbursement, they stay off the regulatory radar.
State enforcement practices under the Bureau of Health Care Quality and Compliance (HCQC) have come under intense scrutiny from providers, advocates, and legal professionals alike for targeting some facilities while wholly ignoring others. Some organizations remain open even after multiple complaints, while others are audited and fined repeatedly.
This structure means those who operate in the shadows are protected by their invisibility, while licensed facilities are punished for transparency and cooperation. The truth is that the state doesn’t have the resources to regulate these homes properly.
The latest rumors imply that many group homes are now starting their own hospices and telling their residents that they don't have a choice. Healthcare providers are exploiting Medicare and Medicaid dollars by finding loopholes in the system. It’s no surprise that Nevada temporarily paused licensing and Medicaid enrollment for new hospice and home healthcare providers when the number of Nevada hospice providers jumped by 350 percent since 2020.
Meanwhile, hospitals are often the main source of referrals for unlicensed or unkept skilled nursing and group homes. Hospitals are under tremendous pressure to discharge; some of it is due to bed capacity, some of it is due to insurance, and they are not designed to serve as long-term care facilities. Many hospitals don’t have the time to check if homes are regulated, don’t have staff to ensure the homes are safe, and need to keep beds open for the next patient.
Hospitals are essentially patient dumping, only instead of the street, it’s a group home. There are rumors that some physicians are aligned with these hospices and group homes, and they are double-dipping. However, as the Nevada Medicaid Fraud Unit explains, “We can't put the blame on one person when so many are involved in the discharge process, so we are just holding the hospital accountable.” One insider tells me there is not a single hospital in the city that has not been found guilty of discharging patients to unlicensed or unregulated homes—even in northern Nevada, hospital discharge cases are being investigated.
Why Does This Keep Happening?
Fraud is, unfortunately, easy to commit if you know how. Especially in the Medicaid system. Once individuals are caught, they often come back. Lenny Alston ran unlicensed and improperly licensed group homes in 2013, with one incident resulting in the death of a resident. She was convicted of two counts of manslaughter, sent to prison, put on probation, and then came back to do it all over again. Shonna Nicole Marshall was sentenced to Medicaid fraud and money laundering in 2022 and was already opening a new behavioral health company six months after getting released from prison. Journey to Recovery has received numerous complaints over the last six years and continues to operate without problems. Lawrence and Leasa Carter were just indicted in 2026 by a grand jury on 69 Felony charges of Medicaid Fraud, Racketeering, Perjury, Theft, and Identity Theft. This came after a Las Vegas grand jury indicted Leasa for nearly $5 million in alleged Medicaid fraud in 2025.
How do people keep getting away with abusing Nevada’s most vulnerable citizens? There are a lot of loopholes. The DHS, entrusted with protecting Nevada’s most vulnerable residents, often has its hands tied. It is not easy to go after hospitals, which, even when they do get in trouble, can keep their actions hidden from public scrutiny through settlements and NDAs. Facilities trying to do the right thing are being driven out by poor reimbursement rates or regulatory burden—while predatory, unlicensed homes thrive. Every facility forced to shut its doors removes beds, staff, and services from communities that are already underserved. Meanwhile, families have no choice but to place loved ones in unlicensed, unsafe, or out-of-state alternatives.
If Nevada is serious about protecting its elderly, disabled citizens and vulnerable populations, it must stop punishing those who operate in the light and start addressing those who hide in the dark.
Does Being Licensed Really Matter?
After posting about this topic in a Nevada healthcare Facebook group, a few comments suggested that just because you’re unlicensed doesn't mean you are a bad provider; most people providing care for vulnerable populations do so because they want to help. But there is a wide variability, which is why regulation matters. Carole Fisher, President of the National Partnership for Healthcare and Hospice Innovation (NPHI), a national hospice membership organization, believes that having licensed homes improves outcomes. She explains, “If you are providing care, it needs to be licensed - especially for older individuals and individuals with behavioral issues.”
LaCrea Rahman operates unlicensed homes in Las Vegas. She doesn’t provide medical care, just home care, and states that she operates well-managed, clean, safe, and affordable spaces for older adults who would be on the streets or worse. She works in healthcare and saw firsthand the need for people who don't qualify for traditional housing or can't afford it. Hearing the stories of people who had bad experiences in group homes was heartbreaking, and she wanted to make a difference. But getting regulated takes time and money; there are many roadblocks and hurdles.
Both Carole and LaCrea agree that, regardless of whether you're licensed or unlicensed, if your intent is not in the right place, people will suffer.
Beyond Nevada, Beyond Politics
Carole Fisher has been in Las Vegas since 1980, spent her entire career in healthcare, and says this is not just a Nevada problem. In fact, Nevada is just one of many states in recent years to impose a moratorium. The Nevada Independent found that “The rise of hospice providers in Southern Nevada… has coincided with the crackdown on fraud and abuse cases in hospice centers in California.”
In the past 5 years, Nevada Medicaid saw a 161 percent increase in spending on hospice providers and a 65 percent increase in spending on home health providers. Nevada Health Authority Director Stacie Weeks said that because fraud is such an issue, the pause was "extremely necessary."
In recent months, this issue has become politicized. But the truth is, Nevada did not need a 350% increase in new hospices, even with the population growth. The state cannot provide the level of oversight required to ensure that Nevada’s most vulnerable are treated with dignity. The Nevada Medicaid Fraud Unit hopes that “with the new Nevada Health Authority, there should be more oversight.” And that starts with stopping the bleed.
Real World Solutions to Help Nevada’s Most Vulnerable
Solving the problem of unlicensed and unregulated group homes, residential homes, and hospices will require stakeholders to work together. We need more facilities, more beds, more education, better wages, and more hospital awareness and compliance in discharges.
The Nevada Medicaid Fraud Unit offers presentations and programs to hospitals, healthcare and mental health providers, and healthcare groups. Educating social workers, community health workers, and discharge staff is key to ensuring they send patients to licensed facilities.
There have also been changes in the state in the last few years that might help address the problem more effectively. As of July 2025, Nevada's Bureau of Health Care Quality and Compliance (HCQC) streamlined Medicaid under the new Nevada Health Authority, focusing on reducing costs and improving access, plus recent regulations for facility licensing. While HCQC is responsible for licensing and compliance, enforcement actions frequently lag behind the volume of complaints. Nevada expanded its mandatory managed care program in 2026, ensuring managed care is available across all regions. This change may improve the number of Medicaid fraud cases the state sees.
Policymakers and advocates might be wondering what to do next. Some action items might include creating:
Mandatory public registry of licensed residential facilities
Cross-reporting requirements between hospitals, Nevada's ADSD, CPS, and HCQC
Increased funding for inspectors and unannounced site visits
Penalties for hospitals discharging patients to unlicensed homes
Meaningful reform will require legislation, adequate enforcement staffing, and accountability for facilities and referral sources that bypass licensing requirements. That means more education is key. Fraudsters will always find a way, so it’s important to stay vigilant so that what happened in 2018 doesn’t ever happen again.
